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Supply Chain Management At WALMART

Supply Chain Management at WALMART

Pragya Dwivedi

on 28 November 2013

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Transcript of Supply Chain Management At WALMART

Supply Chain Management at WALMART
WALMART SCM Development
Cutting of middleman
Global Sourcing PL merchandising(16% of sale)
“House of Brands”
Quarterly buyer meet,sales floor visits
Negotiation:no advertising,discounting,distributing expense to supplier
Supplier workforce supporting walmart
Remained focused on improving its supply chain
Remix, started in 2005,aimed at reducing the percentage of out of stock merchandise
Fast-moving merchandise would be shipped from dedicated “high velocity” food distribution centers
Incremental improvement to the current system
FY 2008-2011, Wal-mart remodeled 70% of its store base
Fewer large format supercenters, 113(2011) from 277(2006)
Fewer smaller format stores from its competitors
Focusing On the Supply Chain
Walmart Inc.

Warehouse style stores-Walmart Discount city
Major Competitive Advantage :SCM
Regular Monitoring
Use of Bar code,sharing sales data with suppliers
Controlling its own fleet,computerised POS
Distribution cost:1.7% of sale(kmart 3.5%,Sears5%)

Presented By
Kritika Sharma
Naman Dutt
Pragya Dwivedi
US Retail Industry
Information System
in mid 1980's WalMart invested in
A central database
Store level point-of-sale
Satellite network
First chain wide implementation of UPC Barcodes
In 1990's developed the largest civilian database in the world-"Retail Link"
Early Adopters of CPRF and VMI programs
In 1987, a massive satellite system linked all of the stores' company headquarters
Human Resource
Walton visited each store & encouraged associates to contribute ideas
"Saturday morning meetings"
Often toured competitors' stores, to "borrow" new ideas
Centralization was the key factor as it :
lowered costs
improved communications
Walmart enjoyed lower operating costs as it was Non-Union
Focusing on the Supply Chain
New Initiative & Reorganization
Three significant initiatives:
Global sourcing: changes in the way it procured product
Project one touch: optimizing product delivery to stores
Multi-channel strategy: boost online business
Author's Note
Ken Mark: free lance case writer at Richard Ivey Business School
GM consumer goods @ steribottle inc
Prof Fraser Johnson @ Ivey Business school,western university,canada
Teaches operation ,purchase,logistics

DC: Hub & Spoke Model
Store location:suburban areas
Logistics:38% from supplier warehouse
High turning time:cross docking
Offshore merchandise :processed @ coastal DC
Backhaul:unsold items
Ununionised employees:Standard & uniform Delivery Procedure
Store Network
Bulk buying:passing benefits to customer
“Store of community”-Product mix
Unique store template post historic analysis of community
EDLP vs hi-lo strategy:bullwhip effect
Real time in-stock levels
Power to associate: Pos & delivery
 As Neuhausen, what is your analysis of Wal-Mart’s supply chain? Are the company’s supply chain capabilities still a source of competitive advantage? Why or why not?
 How is Wal-Mart doing? How does it compare with its competitors?
As Jonnie Dobbs, Wal-Mart’s EVP of logistics, where would you spend your money or focus your energy?
As Jonnie Dobbs, what recommendations would you make to the CEO? Where do you see the opportunities for Wal-Mart in its global supply chain?
SCM Analysis
Using IT in SCM(EDI),bar code,sales data analysis
RFID system in Logistics
Retail Link:manage inventory with help of suppliers,
CPFR:forecast demand,lead time redn,
Recent: global proc div @ china,strategy:-identify generic prod,inc quality,reduce cost
Competitive advantage
Economies of scale in procurment(customize supplier)
Distribution well stocked DCs & real time data
Logistics:own fleet
IT enabled inventory management
Proactive approach to customer need
Global SCM
Establish Common Ground:surveying suppliers’ views about continuous improvement ; educating them
Show the Road Map:to suppliers for focused approach
Accountability by suppliers (operation teams)
Low Cost is the foundation for Low Price
Most efficient method & process to be used
Sustainable cost reduction
Backhaul Revenue generation
Full transcript