WAL-MARTWORLD’S

BEST

RETAIL STORE

CASE STUDY On its

Supply chain management

G

roup Memebers.

Wisal Ahmad.112.

M Ilyas Khan 113.

Iftikhar Hussain 116.

DIFFERENT LOGOS.

5

HISTORY OF WAL-MART

The company’s founder is Sam Walton.

He was born in 1918 at Oklahoma.

In 1940, he worked for the famous retailer, J C Penney.

Walton gave up the job and decided to set up his own retail store.

He purchased a store franchise in Arkansas.

Offering significant discounts on prices, he became successful and acquired a second store in 3 years.

In 1980s, Wal-Mart continued to grow due to huge customer demands in small towns. Wal-Mart was offering low prices, customer satisfaction guaranteed, and hours that were realistic for the way people wanted to shop.

Open all night, for university students

By 1984, there were 640 Wal-Mart stores in U.S.

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

Successful VendorRelationship

Efficient Communication

Network

Value Employees Most Efficient

Operation Management

LOW PRICELOW PRICE

Customer-Oriented

Competitive Advantages

Resale price maintenance 1960-80

Dominates its suppliers

DEVELOPMENT OF SUPPLY CHAIN

Walton used to purchase Merchandise in Bulk from new suppliers.

He realized that a new trend, discount retailing is emerging. In order to compete he opened large warehouse style stores termed as “WALMART

DISCOUNT CITY” Improved Infrastructure and ability to react to

changes in legislation such as “resale price maintenance” against rivals.

PURCHASING……

Making purchases in “Bulk”.

Largest suppliers had offices in Bentonville thus supporting Wal-Mart’s business.

International purchasing offices worked with local factories sourcing Wal-Mart’s private label products.

DISTRIBUTION…

In the early 1970s, Wal-Mart became the pioneer of the retail hub-and-spoke system.

Under the system, goods were centrally ordered, assembled at a massive warehouse, known as ‘distribution center’ (hub), from where they were dispatched to the individual stores (spoke).

CROSS-DOCKING……T

o 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. The system reduced the handling and storage of finished goods, virtually eliminating the role of the distribution centers and stores.

BACK-HAUL REVENUE…..

On the way back to stores, Wal-Marts trucks generated “back-haul” revenue by transporting unsold merchandise on trucks that would be otherwise empty.

RETAIL STRATEGY…..

Wal-Mart implemented an Every Day Low Prices (EDLP) policy. As a result Wal-Mart didn’t need to advertise frequently.

Technology/Information System.

RFID: Radio Frequency Identification. (Inventory tracking in supply chain)

VMI: Vendor Manage Inventory

CPRF: Collaborative Planning Replenishment Forecasting

Private Satellite Channel:

Human Resource

Normally in retail companies , HR is not focused but Wal-Mart does.

Focus the HR aspect. Pays high value its employees. They call do not them as employees or workers. They term them as “Associates”. They get them involved and consider them part of Wal-Mart. They call Saturday meetings, Weekly meetings etc…..