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Type Discount department store/Public (NYSE: WMT)

Founded Rogers, Arkansas, USA (1962)

Headquarters Bentonville, Arkansas, USA

Sa Walton (1918–1992), Founder
H. Lee Scott, CEO
Key people
S. Robson Walton, Chairman
Tom Schowe, CFO
Industry Retail
Products Discount stores, grocery stores, and hypermarkets
Revenue US$351.1 billion (2007)
Industry US$11.3 billion (2007)
Products 1.9 million (2007)
• Purchasing and Distribution
• Retail Strategy
• Information systems
• Remix – High Velocity(food) Distribution centers
• Use of RFID Technology
Source: Adapted from Garrison Wieland for “Wal-Mart’s Supply Chain,”
Harvard Business Review 70(2; March–April 1992), pp. 60–71.
• Cut the Middleman
• Source Product globally - China(1980)
• Private label - low price as compared to brand
• Enormous power over its supplier
• Approx 90000 supplies including P&G, Nestle and Unilever
• Hub and Spoke system – Design of high volume DC serving
a cluster of stores
• Cross docking – See next slide
• ‘Back – Haul’ Revenue by trucks by transporting unsold
merchandise on the way back
Cross-docking means to take a finished good from the
Manufacturing plant and deliver it directly to the customer with
little or no handling in the process.
• Everyday low prices (EDLP) - prices on items at relatively
low compared to the everyday market price (maintaining
customer trust in pricing and customer loyalty)
• Clicks and bricks model - allows the customer to order
products either online or physically in one of their stores,
also allowing them to either pick-up their order directly at a
local branch of the store
• Price match guarantee it has challenged other competitors
to reduce their
• Demand was smoothed out to reduce the bullwhip effect
• Low advertisements – give saving back to customers
• 1980 -Retail Link System – 570TB , largest civilian database
• Store level POS data
• UPC bar code Implementation
• VMI- Vendor Managed Inventory – Diapers by P&G
• Collaborative Planning , Forecasting, and
• Help in higher service level and low outs(out of stock)
• Satellite Network – POS data transfer , broad cast videos
message by senior management
A means of optimizing Supply Chain performance in which the
manufacturer is responsible for maintaining the distributors
inventory levels. The manufacturer has access to the
distributors inventory data and is responsible for generating
purchase orders.
Manufacturers generate orders, not distributors or retailers
Stocking information is accessed using EDI
A first step towards supply chain collaboration
Increased speed, reduced errors, and improved service
Point-of-sale Data is Orders are Merchandise is
Customer Merchandise The store will re-
system transmitted to generated from loaded onto
made a is delivered to stock the shelves
captures data warehouses previous-day trucks using
purchase the store with merchandise
in real-time for Inv. Mgmt. sales cross-docking

Retail Link Merchandise is

transmits manufactured
is shipped to
data to based on historical
supplier and real-time data
• Automated Data collection based on an electronics – not a
• Tag can be imbedded in the product or stuck on the exterior
case or pallet
• Reader instead of a barcode scanner
• Allows fully automated data collection with the use of portals
• Can read many ID tags at a time
• Wal-Mart replaced bar-code technology with RFID technology to reduce
costs and increase the efficiency, in July 2003, and asked its top 100
suppliers to be RFID compliant by January, 2005. The company believed
that this replacement would reduce its supply chain management costs
and enhance efficiency.

• Due to implementation of RFID, employees were no longer required to

physically scan the bar codes of goods entering the stores and distribution
• Cost reduction and less numbers of outs
Thank you !!