Presented by: Group 6

Supply Chain Management

Faculty In-charge: PROF. SUBRATA KAR

Avishesk Majumdar

Avinash Singh

Mainak Ghosh

Nishant Jaiswal

Pratik Ganatra

Ranit Das

Sirsha Basu

Snehasish Mondal

Shubhadeep Bhaumik

Tanmoy Roy

The company’s founder is Sam Walton. In 1940, he worked for the famous retailer, J C Penney. Walmart is Fortune 500 list no. 1 company and its valuation is $ 482

billion . Walmart is the world biggest retailer . In USA they have more than 4600 stores and more than 1000

suppliers all-over the world & their major cloths supplier is Bangladesh.

Company Background

This phenomenal growth of Wal-Mart is attributed to its continued focus on customer needs and reducing cost through efficient supply chain management practices.

In the early 1970s, Wal-Mart became one of the first retailing companies in the world to centralize its distribution system, pioneering the retail hub-and-spoke system

Company Background – Contd…

EDI saved time and made procurement efficient.Using the bar code scanners, an analysis of daily, weekly, monthly sales data helped the store manager determine what products were selling and at what quantity.Accordingly, the store manager would place orders in the manufacturing division.

EDI=Electronic Data Interchange

Using EDI for procurement

Using EDI for procurement – Contd…

EDI Competitive Advantage

In 1977, Wal-Mart set up a Computer Terminal Network (CTN) to establish a communication link between its stores and the company headquarters

Real time business operations In 1978, Wal-Mart set up its first fully automated distribution centerWal-Mart placed orders for huge quantities of goods with its

suppliers.Cost of sales worked out to be 2-3 %(very low from industry average) Information of product, manufacturer, price was recorded on

computer system

Using IT in Supply Chain Management

That information was passed to centralized data warehouseUsing voice based technologies: Enhancing warehouse and logistics

management. Wal-Mart could replenish stock at any of its 1525 stores in US within

24 hours. Cross-docking: It enabled the company to receive goods and dispatch

them to stores in less than a day.

Using IT in Supply Chain Management – Contd…

GPS system in trucksAny truck can be locatedDrivers could activate system by voice and interact with staff.

GPS System

Wal-Mart emphasized the need to reduce purchasing costs and offer the best price to the customer.

The company directly procured from manufacturers, by-passing all intermediaries.

Wal-Mart spends a significant amount of time meeting vendors and understanding their cost structure.

By making the process transparent, the retailer can be certain that the manufacturers are doing their best to cut down costs.

Walmart Procurement

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An important feature of Wal-Mart’s logistics infrastructure was its fast and responsive transportation system.

The distribution centers were serviced by more than 6100 company owned trucks.

Wal-Mart believed that it needed drivers who were committed and dedicated to customer service.

The company hired only experienced drivers who had driven more than 300,000 accident-free miles, with no major traffic violation.

Logistics Management

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To make its distribution process more efficient, Wal-Mart also made use of a logistics technique called “cross-docking.”

In this system, the finished goods were directly picked up from the manufacturing plant, sorted out and then directly supplied to the customers.

Logistics Management – Contd…

SAM WALTON introduced the concept of Every Day Low Pricing. It promised customers wide variety of high quality branded as well as

unbranded products at lowest possible price, offering value for their money.

Walmart advertisement describing EDLP said, "Because you work hard for every dollar , you deserve the lowest price we can offer every time you make a purchase. You deserve our Every Day Low Price”

EDLP Strategies

Walmart invited its major suppliers to co-developed profitable supply chain partnership, these partnership are intended to amplify product flow efficiency .

Walmart relationship with P&G did not began well ,Walmart saw P&G as one of his bad suppliers because P&G’s organization and processes were far to complex and lacked efficiency.

P&G focused on day-to-day results, a long term strategic plan was not their main focus

Developing partnership with suppliers

The relationship changed with the process of enabling inter-operability between the company’s systems at transactional, operational and strategic levels.

But after 1988 the relationship developed tremendous value to both the companies.

Wal-Mart and P&G also incorporated several other inter company innovations such as vendor managed inventory & category inventory.

Developing partnership with suppliers – Contd…

Walmart embarked on strategic sourcing to find products at the best price from suppliers who are in a position to ensure they can meet demand.

The company then establishes strategic partnerships with most of their vendors, offering them the potential for long-term and high volume purchases in exchange for the lowest possible prices.

Walmart streamlined supply chain management by constructing communication and relationship networks with suppliers.

Selection of Vendors

Walmart is able to move goods to-and-from distribution centers because they maintain a private fleet of trucks and a skilled staff of truck drivers.

Every year they drive 700 million miles to make millions of deliveries to the stores. Each driver averages around 100,000 miles annually - that's like driving around the world 4 times!

Drivers follow the most efficient routes to their destinations. This way they use less fuel & maximize the merchandise delivery.

Walmart has 150+ distribution centers & Walmart’s transportation has a fleet of 6,100 tractors, 61,000 trailers and more than 7,800 drivers.

Distribution of Traffic and Fleet