Supply Chain Walmakt

7/29/2019 Supply Chain Walmakt

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Presenting To:

Rachita Jaysval

Presentation by:

Dhaval Patel (13)

Milan Patel (15)

Nirmal Patel (16)

Wal-Marts the Multinational

Retail corporation


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Introduction

Walmart, is an American multinational retail corporation that runschains of large discount department stores and warehousestores.

The company is the world's third largest public corporation,according to the Fortune Global 500 list in 2012, the biggest

private employer in the world with over two million employees,and is the largest retailer in the world.

Walmart remains a family-owned business, as the company iscontrolled by the Walton family, who own a 48 percent stake inWalmart.

It is also one of the world's most valuable companies.

The company was founded by Sam Walton in 1962, incorporatedon 31 October, 1969.

Walmart has 8,500 stores in 15 countries, under 55

different names.
http://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/List_of_companies_by_revenuehttp://en.wikipedia.org/wiki/Fortune_Global_500http://en.wikipedia.org/wiki/List_of_largest_employershttp://en.wikipedia.org/wiki/List_of_largest_employershttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Family_businesshttp://en.wikipedia.org/wiki/Walton_familyhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/Sam_Waltonhttp://en.wikipedia.org/wiki/Incorporation_(business)http://en.wikipedia.org/wiki/Incorporation_(business)http://en.wikipedia.org/wiki/Sam_Waltonhttp://en.wikipedia.org/wiki/Sam_Waltonhttp://en.wikipedia.org/wiki/Sam_Waltonhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/Walton_familyhttp://en.wikipedia.org/wiki/Walton_familyhttp://en.wikipedia.org/wiki/Walton_familyhttp://en.wikipedia.org/wiki/Family_businesshttp://en.wikipedia.org/wiki/Family_businesshttp://en.wikipedia.org/wiki/Family_businesshttp://en.wikipedia.org/wiki/Family_businesshttp://en.wikipedia.org/wiki/Family_businesshttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/List_of_largest_employershttp://en.wikipedia.org/wiki/List_of_largest_employershttp://en.wikipedia.org/wiki/List_of_largest_employershttp://en.wikipedia.org/wiki/List_of_largest_employershttp://en.wikipedia.org/wiki/List_of_largest_employershttp://en.wikipedia.org/wiki/Fortune_Global_500http://en.wikipedia.org/wiki/Fortune_Global_500http://en.wikipedia.org/wiki/Fortune_Global_500http://en.wikipedia.org/wiki/Fortune_Global_500http://en.wikipedia.org/wiki/Fortune_Global_500http://en.wikipedia.org/wiki/List_of_companies_by_revenuehttp://en.wikipedia.org/wiki/List_of_companies_by_revenuehttp://en.wikipedia.org/wiki/List_of_companies_by_revenuehttp://en.wikipedia.org/wiki/List_of_companies_by_revenuehttp://en.wikipedia.org/wiki/List_of_companies_by_revenuehttp://en.wikipedia.org/wiki/List_of_companies_by_revenuehttp://en.wikipedia.org/wiki/List_of_companies_by_revenuehttp://en.wikipedia.org/wiki/List_of_companies_by_revenuehttp://en.wikipedia.org/wiki/List_of_companies_by_revenuehttp://en.wikipedia.org/wiki/Multinational_corporation


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Wal-Mart is the Worlds Largest Retail Company
http://images.google.com/imgres?imgurl=http://www.foe.com/gwpcrawford/clovishobbs/walmart.jpg&imgrefurl=http://www.foe.com/gwpcrawford/clovishobbs/&h=680&w=1000&sz=99&hl=tr&start=33&tbnid=KgItDCbOYQ1DzM:&tbnh=101&tbnw=149&prev=/images?q=walmart&start=20&ndsp=20&svnum=10&hl=tr&lr=&sa=Nhttp://images.google.com/imgres?imgurl=http://americahurrah.com/Cruises/Ryndam/Images/Walmart.JPG&imgrefurl=http://americahurrah.com/Cruises/Ryndam/puertovallarta.htm&h=960&w=1280&sz=317&hl=tr&start=2&tbnid=nFJGh7obafIKPM:&tbnh=113&tbnw=150&prev=/images?q=walmart&svnum=10&hl=tr&lr=http://images.google.com/imgres?imgurl=http://www.people.cornell.edu/pages/res6/Walmart.jpg&imgrefurl=http://www.people.cornell.edu/pages/res6/China12.html&h=270&w=360&sz=53&hl=tr&start=31&tbnid=DMmdp58B9wL6bM:&tbnh=91&tbnw=121&prev=/images?q=walmart&start=20&ndsp=20&svnum=10&hl=tr&lr=&sa=Nhttp://images.google.com/imgres?imgurl=http://jameswagner.com/mt_archives/walmart.gif&imgrefurl=http://jameswagner.com/mt_archives/2005_09.html&h=220&w=420&sz=31&hl=tr&start=12&tbnid=IqfReiUMN8_iHM:&tbnh=65&tbnw=125&prev=/images?q=walmart&svnum=10&hl=tr&lr=


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Type Public Store

Traded as 500 Component

Industry Retail

Founded 1962 - Rogers, Arkansas, United States

Founder(s) Sam Walton

Headquarters Bentonville,Arkansas, United States

Number of locations 10,970 (2012)

Area served Worldwide

ProductsApparel/footwear specialty, cash & carry/warehouse club,discount store, hypermarket/supercenter/superstore,supermarket


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Walmart Discount Stores:-

Walmart discount stores are discount departmentstores with size varying from 51,000 square feet(4,738.1 m2) to 224,000 square feet (20,810.3 m2)

Products:-

They carry general merchandise and a selection ofgroceries. Many of these stores also have a gardencenter, a pharmacy, Tire & Lube Express, optical

center, one-hour photo processing lab, portrait studio,a bank branch, a cell phone store and a fast foodoutlet. Some also have gasoline stations.
http://en.wikipedia.org/wiki/Discount_storehttp://en.wikipedia.org/wiki/Discount_storehttp://en.wikipedia.org/wiki/General_merchandisehttp://en.wikipedia.org/wiki/Groceryhttp://en.wikipedia.org/wiki/Pharmacyhttp://en.wikipedia.org/wiki/Tirehttp://en.wikipedia.org/wiki/Motor_oilhttp://en.wikipedia.org/wiki/Photographic_processinghttp://en.wikipedia.org/wiki/Portraithttp://en.wikipedia.org/wiki/Portraithttp://en.wikipedia.org/wiki/Photographic_processinghttp://en.wikipedia.org/wiki/Photographic_processinghttp://en.wikipedia.org/wiki/Photographic_processinghttp://en.wikipedia.org/wiki/Photographic_processinghttp://en.wikipedia.org/wiki/Photographic_processinghttp://en.wikipedia.org/wiki/Photographic_processinghttp://en.wikipedia.org/wiki/Photographic_processinghttp://en.wikipedia.org/wiki/Photographic_processinghttp://en.wikipedia.org/wiki/Photographic_processinghttp://en.wikipedia.org/wiki/Motor_oilhttp://en.wikipedia.org/wiki/Tirehttp://en.wikipedia.org/wiki/Pharmacyhttp://en.wikipedia.org/wiki/Groceryhttp://en.wikipedia.org/wiki/General_merchandisehttp://en.wikipedia.org/wiki/General_merchandisehttp://en.wikipedia.org/wiki/General_merchandisehttp://en.wikipedia.org/wiki/Discount_storehttp://en.wikipedia.org/wiki/Discount_storehttp://en.wikipedia.org/wiki/Discount_storehttp://en.wikipedia.org/wiki/Discount_storehttp://en.wikipedia.org/wiki/Discount_store


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Walmart Supercenter:- Walmart Supercenters are hypermarkets with size varying

from 98,000 to 2,61,000 square feet (9,104.5 to 24,247.7m2), with an average of about 197,000 square feet

(18,301.9 m2

).Also include a full-service supermarket, including meat and

poultry, baked goods, delicatessen, frozen foods, dairyproducts, garden produce, and fresh seafood.

Many Wal-Mart Supercenters also have cellular phonestores, hair and nail salons, video rental stores, local bankbranches and fast food outlets. Also have McDonald's &Subway
http://en.wikipedia.org/wiki/Hypermarkethttp://en.wikipedia.org/wiki/Bakinghttp://en.wikipedia.org/wiki/Delicatessenhttp://en.wikipedia.org/wiki/Frozen_foodhttp://en.wikipedia.org/wiki/Producehttp://en.wikipedia.org/wiki/McDonald'shttp://en.wikipedia.org/wiki/Subway_(restaurant)http://en.wikipedia.org/wiki/Subway_(restaurant)http://en.wikipedia.org/wiki/McDonald'shttp://en.wikipedia.org/wiki/Producehttp://en.wikipedia.org/wiki/Frozen_foodhttp://en.wikipedia.org/wiki/Frozen_foodhttp://en.wikipedia.org/wiki/Frozen_foodhttp://en.wikipedia.org/wiki/Delicatessenhttp://en.wikipedia.org/wiki/Bakinghttp://en.wikipedia.org/wiki/Bakinghttp://en.wikipedia.org/wiki/Bakinghttp://en.wikipedia.org/wiki/Hypermarket


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Walmart Market:-

Walmart Market is a chain ofgrocery stores that averageabout 42,000 square feet (3,901.9 m2).

They are used to fill the gap between discount store and

supercenters. offering a variety of products, which include full lines of

groceries, pharmaceuticals, health and beauty aids, photodeveloping services, and a limited selection of generalmerchandise.
http://en.wikipedia.org/wiki/Grocery_storehttp://en.wikipedia.org/wiki/General_merchandisehttp://en.wikipedia.org/wiki/General_merchandisehttp://en.wikipedia.org/wiki/General_merchandisehttp://en.wikipedia.org/wiki/General_merchandisehttp://en.wikipedia.org/wiki/General_merchandisehttp://en.wikipedia.org/wiki/Grocery_storehttp://en.wikipedia.org/wiki/Grocery_storehttp://en.wikipedia.org/wiki/Grocery_store


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Walmart India Our first Best Price Modern Wholesale opened in 2009.

Best Price is a cash-and-carry wholesale warehouse that sells

bulk food and consumables along with supplies needed tooperate small business operations, such as restaurants, hotelsand convenience stores.


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Walmart International

Walmart's international operations currently comprise4,263 stores and 660,000 workers in 15 countries outsidethe United States.

There are wholly owned operations in Argentina, Brazil,

Canada, and the UK. With 2.1 million employeesworldwide, the company is the largest private employer inthe U.S. and Mexico, and one of the largest in Canada.

In the financial year 2011, Walmart's international divisionsales were $129 billion, or 24.7 percent of total sales.


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History of LOGO


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Distribution Centers:-

Walmarts 158 distribution centers are hubs of activity for business.distribution operation is one of the largest in the world. Walmartlogistics has a fleet of 6,500 tractors, 55,000 trailers and more

than 10,000 drivers. A regional distribution center can have up to 12 miles ofconveyor

belts, which can move hundreds of thousands of cases through thefacility each day.

There are 9 disaster distribution centers, strategically located

across the country and stocked to provide rapid response tostruggling communities in the event of a natural disaster.

Each distribution center is more than 1 million square feet in size,and uses more than 5 miles of conveyor belts to keep productsmoving to our stores 24 hours a day.

Every distribution center supports 90 to 100 stores in a 200-mileradius.


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Trucks and Truck Drivers

Walmart is able to move goods to andfrom distribution centers because theymaintain a private fleet of trucks and askilled staff of truck drivers.

They think that team of drivers is thebest in the world. Theyre part of oneof the largest and safest fleets, andevery year they drive 700 million milesto make millions of deliveries to ourstores and clubs.

Each driver averages around 100,000miles annuallythats like drivingaround the world 4 times!


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Hub and Spoke System

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

Under the system, goods were centrally ordered, assembled

at a massive warehouse, known as distributioncenter (hub),from where they were dispatched to the individual stores(spoke).

The hub and spoke system enabled Wal-Mart to achievesignificant cost advantages by the centralized purchasing of

goods inhuge quantities..

And distributing them through its own logisticsinfrastructure to the retail stores spread across the U.S.


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Wal-Marts Procurement

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

The company directly procured from manufacturers, bypassing all intermediaries.

Wal-Mart finalizes a purchase deal only when it is fullyconfident that the products being bought is not available elsewhere at a lower price.

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.


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Using EDI for Procurement

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The computer systems of Wal-Mart were connected to thoseof its suppliers.

EDI enabled the suppliers todownload purchase ordersalong with store-to-store salesinformation relating to theirproducts sold.

On receiving information aboutthe sales of various products,the suppliers shipped therequired goods to Wal-Martsdistribution centers.

Benefits Analysis by Walmart

EDI provides speed

EDI reduces paper work

EDI improves accuracyEDI reduces costs

EDI improves operational efficiency


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Cross-docking

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The system reduced the handling and storage offinished goods, virtually eliminating the role of thedistribution centers and stores.

The manufacturer directly forwarded the goods to a

place called the staging area.

The goods were packed here according to the ordersreceived from different stores and then directly sent tothe respective customers.


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Wal-Mart Lives in a World of Supply & Command,Instead of a World of Supply & Demand

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An Example: Cross-Docking

Pre-assembled orders for individual stores from a suppliers

truck go seamlessly from an unloading dock at Wal-Marts

Distribution Center directly into a truck bound for stores Get goods into stores without even unpacking them

let alone allowing them to sit in storage !

Until we reached a billion dollars, a lot of

suppliers just ignored us way out here in the

Arkansas Outback.

Now, of course, were too big too ignore.


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Vendor-Financed Inventory !

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How Cross-Docking Works At Wal-Marts new distribution centers, P&Gs trucks are unloaded

directly to trucks that will head for Wal-Mart Stores. The toothpasteis never even put on warehouse shelves. Once a truck is full, it

heads to the stores. Products are put on the shelf within 4 hours, and are usually sold

within 24 hours.

Despite this tight delivery schedule, Wal-Mart has 10 days to pay

P&G. Benefit of Cross-Docking: Vendor-Financed Inventory

Sell the goods before we have to pay.


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Inventory Management

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Wal-Mart invested heavily in IT and communication systems toeffectively track sales and merchandise inventories in storesacross the country.

With the rapid expansion, it was essential to have a goodcommunication system.

Hence, Wal-Mart set up its own satellite communication systemin 1983.

Wal-Mart was able to reduce unproductive inventory by allowingstores to manage their own stocks, reducing pack sizesacross many product categories, and timely price markdowns.

Instead of cutting the inventory across the board, Wal-Martmade full use of its IT capabilities to make more inventoriesavailable in the case of items that customers wanted most,while reducing the overall inventory levels.


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Inventory Management(Retail link System)

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In 1991, Wal-Mart had invested approximately $4 billion tobuild a retail link system.

More than 10,000 Wal-Mart retail suppliers used the retail linksystem to monitor the sales of their goods at stores andreplenish inventories.

Details of daily transactions (~10 million per day) wereprocessed through this system.

Retail Link connected Wal-Marts EDI network with anextranet, accessible to Wal-Marts thousands of suppliers.

The suppliers could find out how their product was performingvis-a-vis competitors products in a particular productcategory.


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Wal-Mart owned the largest and most sophisticatedcomputer system in the private sector.

The company used Massively Parallel Processor(MPP) computer system to track the movement of

goods and stock levels.

All information related to sales and inventories waspassed on through an advanced satellitecommunication system.


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Although Wal-Mart was optimistic about the benefitsof RFID, analysts felt that it would impose a heavyburden on its suppliers.

To make themselves RFID compliant, the suppliers

needed to incur an estimated $20 Million.

Of this, an estimated %50 would be spent onintegrating the system and making modifications inthe supply chain software.


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Why can Wal-mart be so successful?

Supply chain plays an important role

Supply chain:

a method of collaborating horizontally amongsuppliers, retailers, and customers to create value


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Wal-mart Supply Chain Flow Chat

Manufacturer

Manufacturer

Manufacturer

Retail Store

Retail Store

Retail Store

Point of sale terminal

Satellite system

Bar code, RFID

Radio, headphone

Distribution center

Company Headquarter


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Distribution Center 108 centers in USA Place that various goods are gathered, sorted

and delivered to different store

About 80% of merchandises shipped fromcenters

24 hours operation


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Manufacturer 1

Manufacturer 2

Manufacturer 3

Retail store 1

Retail store 2

Retail store 3Manufacturer 3


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Trucks outside Wal-mart Past----written instructions Now----radio and headphone

English ?Spanish?English ?Spanish?


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Trucks outside Wal-mart Use both hands Keep contact with the headquarter

Behind or ahead the expectation

Adjust to any sudden changes

Benefit: Cost


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Minilift Trucks Inside distribution centers equipped with headphone

Computer give direction to driver in voice

What merchandises to transport Where the merchandises should be carried to

Which truck the merchandises be loaded

Report progress, ahead or behind schedule

Benefit: productivity and efficiency


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Bar Code System Standardized bar code system

applied by every supplier

Helps facilitating large scale operation

Pallets passed through conveyor belt are

scanned automatically

Product codes are transferred to centralizedcomputer system


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Bar Code System Matching with the computer database and

generate useful information What it is. What quantity it is. Which packing

compartment and truck to go. Which store to go

Processes take place simultaneously Save time and labour sorting merchandises

Smooth logistic processes


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RFID Radio Frequency Identification System Use radio waves to identify objects

Tags with microchip and antenna built in Store data (type, quantity, manufacturer, expired

date) Generate HF signal to transfer data

Allow Wal-mart to keep track of pallets at variousstage of supply chain


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RFID Technology(Radio Frequency Identification)

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In efforts to implement new technologies to reduce costs andincrease the efficiency.

in July 2003, Wal-Mart asked its top 100 suppliers to be RFIDcompliant by January, 2005.

Wal-Mart planned to replace bar-code technology with RFID

technology.

The company believed that this replacement would reduce itssupply chain management costs and enhance efficiency.

Because of the implementation of RFID, employees were no

longer required to physically scan the bar codes of goods enteringthe stores and distribution centers, saving labor cost and time.

Wal-Mart expected that RFID would reduce the instances ofstock-outs at the stores.


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RFID Sensors in the distribution center detect and

receive information from chips

Locate where the pallet is and the condition of it temperature

HumidityAutomatic senser avoid scanning codes one by

one


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RFID Further improve logistics efficiency Save time identifying merchandises

Convenience in checking inventory

Information pre-stored in the chips = convenienceof data processing


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Wal-Marts Data Warehouse

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Current Level of Storage Capacity : 570Terabytes *

Second only to the U.S. Governments

More than all of the Internets fixed pages

BUT ALL THAT DATA IS USELESSUNLESS IT IS USED

Information is shared with its own Buyers ANDSuppliers

* Wall Street Jou rnal, Dec 3-4, 2011


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Point-of-sale terminals

Invested in 1983 Simultaneously rang up sales and tracked

inventory deductions for rapid re-supply.

Electronic scanning of Uniform Product Codes(UPC)

- to price-mark merchandise

- to ensure accurate pricing

Self-labeling system

The merchandise replenishment process


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Large-scale satellite system

Installed in 1987 to improve communication between stores

Link all of the stores to headquarter, givingWal-Marts central computer system real-time

inventory data.Allow sales data to be collected and analyzed

daily, and enable managers to adjustimmediately.

Daily information of individual store can becompared.


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CPFR Program

A Collaborative Planning, Forecasting, andReplenishment program.

Just-in-time inventory program began.

Advantage:

To reduce carrying costs.

Less excess inventory.

Cost of goods is estimated to be 5 to 10 percentless.


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Tailored-made store management

Wal-Mart merchandise is tailored to individualmarkets and individual stores.

Store managers choose which products todisplay and allocate shelf space.

A store devote only 10% of its square footageto inventory.

Wal-Marts culture stress the key role ofassociates.

Information and ideas are shared at individualstores.


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Suppliers = Partners

As Wal-Mart grew, its relationships with somesuppliers evolved into partnerships

Sharing information electronically to improveperformance.

How do they share information?


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Information sharing

Open its databases Retail Link private extranet system:

- to see exactly how its products are sellingand when it might need to up its production

- to give more than 2000 suppliers computeraccess to point-of-sale data

Advantages:

- Gain more information about the customers.- Shelves will always be stocked with theright items at the right time.


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Electronic data interchange (EDI)

Enabled an estimated 3600 suppliers (about 90%of Wal-Marts dollar volume) to receive orders andinteract with Wal-Mart electronically.

Later expanded to include forecasting, planning,

replenishing, and shipping applications.


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Vendor-managed inventory systems

to replenish stocks Wal-Mart transmitted sales data, orders of

products, delivery plan and reports ofwarehouse inventory status to them daily

to plan inventory levels, generate purchaseorders, and ship exactly what was needed

both benefited from reduced inventory costs

and increased sales


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Business planning packets

Each Wal-Mart department developedcomputerized, annual strategic businessplanning packets for its suppliers

including: departments sales, profitability, and inventory

targets, macroeconomic and market trends, andWal-Marts overall business focus

Wal-Marts expectations on them Suppliers recommendations


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How Wal-mart affects suppliers

Domestic Suppliers: Wal-mart imported 18 billion worth of goods from

5,000 Chinese suppliers in 2004

Ranked as Chinas 8 biggest trading partner

ahead of Russia, Australia and Canada Used power to squeeze domestic suppliers profit


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Wal-mart Defense : If all of supplier were squeezed dry

Wal-mart no suppliers

Suppliers found ways to survive

do better at what they did before


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Wal-mart not only selling foreign imported goods,also encourage the use of domestic Americanproducts

Buy American Program

Retained over 1.7 billion in retail purchases thatproduced offshore.


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Supply Chain Walmakt

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