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m Ranked first in the Global Fortune 500 list in year

2001-02 earning revenues of $219.81 billion.

m Largest retailing company in the world.
m 3,500 stores in US & more than 1,170 stores across the
world in the year 2002.
m Employee strength of 1.28 million.
m Leadership because of efficient supply chain
m =alton, born in US, worked for J C Penny.
m He purchased a store franchise from Ben Franklin in mid
1940s; where he started offering significant discounts to
expand volumes & increase overall profits.
m Introduced self-service : innovative practice
m Hired talented and experienced people
m Targeted customers who bought merchandise in bulk
‡ 18 stores
1969 ‡ Annual sales of $44 million

‡ Acquired 16 Mohr-value stores.

1970 ‡ Established a pharmacy, auto service centre & jewelry division.

‡ 600 stores
1984 ‡ Sales about $4.5 bn. Profit $ 200 million.

‡ =alton died after a prolonged illness.

1992 ‡ Joint venture with Cifra to enter into Mexico.

‡ Acquired 122 =oolco stores from =oolworth, Canada

‡ Largest volume discount retailer in Mexico & Canada.
1997 ‡ Acquired the 21-store Germen hypermarket chain.

‡ Expanded germen operations by acquiring 74 stores.


‡ Emerged as the largest company in terms of revenues


m By 2001, it was earning more than billion dollar in every 1.5

Procurement Logistics

m Procured goods directly from manufactures.
m A tough
m Spent significant time meeting vendors & understanding
their cost structure.
m 40 distribution centers in US; over 80,000 items stored in
the year 1998.
m Own warehouses provided 85% inventory; replenishment
within 2 days; shipping cost was roughly 3%
m Different sections on the basis of quantity of goods
m Goods meant for distribution in US arrived in pallets.
m Imported goods arrived in re-usable cases.
m Delivery of automotive goods directly to the stores.
m Use of Barcode technology & Hand-held computer
m Barcodes provided an access to real time information
regarding inventory levels to every employee.
m Hand-held computer displayed all information about
storage, packaging and shipping of all products.
m Fast & responsive transportation system.
m 3,500 company owned trucks.
m Experienced drivers driven more than 3,00,000 accident-
free miles, with no major traffic violation.
m A coordinator scheduling all dispatches.
m Scheduled unloading time; gap of 2 hours between each
m Private Fleet Driver Handbook.
m Use of ´cross- dockingµ ² logistics technique.
‰ ´Supply chainµ to ´Demand chainµ
‰ Retailer ´pushingµ to Customer ´pullingµ
m Heavy investment in IT & communication system.
m Satellite Communication System in 1983.
m Also networked its supplier through computers.
m Collaboration with P&G; built automated re-ordering
m ´Magic =andµ ² hand-held computer linked to in-store
terminals through a radio frequency network.
m Use of Point-of-sales (POS) system, sophisticated
algorithm system, centralized inventory system.
m Barcode & Radio frequency technology.
m $4 billion investment to build a retail link system.
m Efforts made to capitalize each cost saving opportunity
passed to consumers , Low pricing ensured high &
consistent sales volume.
m Low transportation cost
m Efficient supply chain management enabled reduction in
lead time; faster inventory turnover; accurate forecasting;
increased warehouse space; reduction in safety stock &
better utilization of working capital.