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By: Dheeraj Tripathi

PGDM 2013-15
Roll no: 1301-065
Section A
Case Analysis: SCM at WAL-MART
Worlds largest retailer with over USD 312.4
Billion in sales worldwide
More than 6500 stores in the world with 1.8
million employees known as Associates.
1.3 mn employees in US
Established by Sam Walton in 1962
Direct purchasing from the suppliers, cutting
out Middlemen (Wholesalers and distributors)
Sourced products globally
Developed private label Merchandise
Accounted 20% of 2005 sales- $62.5 Billion
Generated higher margins
Around 90000 suppliers, single invoice price
Did not pay suppliers for co-operative
advertising, discounting or distribution
Hub-and-spoke design of high volume distribution centers
serving a cluster of stores
114 Distribution centers in US
Coastal distribution center for merchandise purchased from
offshore locations
Average distance from distribution center to stores- 130 miles


Stores located in low-rent, suburban areas,
close to major highways
75000-person strong logistics division- with
largest private truck fleet -7800 truck drivers
Private fleet operated as for-hire carrier when
not busy transporting merchandise
Trucking employees non-unionized and in-
house

Discount stores- avg 8-27%
lower prices than competition
Everyday low prices (EDLP)
Real-time information on each
stores in-stock levels
Associates were given more
authority override impending
deliveries, alter merchandising
template
Product-mix in the stores
tailored to suit the community
it was located in.
Category Captains assigned
from suppliers to get input on
shelf space allocation
Central database, store-level POS system and
Satellite network
Chain-wide implementation of UPC bar codes
Retail Link (570 TB)- largest civilian database in
the world
Gave suppliers access to real time sales data
Adopted CPRF ( Collaborative Planning,
forecasting and replenishment)
VMI (Vendor Managed Inventory) program :
Continuous Replenishment

Remix aimed to reduce the percentage of out-of-stock
merchandise at stores by redesigning its network of
distribution centers
High Velocity food distribution centers
Smaller,
had temperature control
less automation
RFID (Radio Frequency Identification Tags) : to increase the
ability to track inventory
RFID readers installed: At the Dock, Throughout backroom,
In the Box Crushing Area
16% fewer out-of-stocks at Wal-Mart Stores
Cost of RFID tags: 17 cents

EDI (Electronic Data Interchange)
Connected to suppliers
Enable them to download purchase order along with store
to store sales information relating to their products sold.

Magic Wands
Given to employees at store
Linked through in house terminals through radio frequency
network
Helped to keep a track of Inventory in stores and back up
merchandise in stores at distribution centers

Trucking industry not developed, fragmented
Bad infrastructure : Roads
Strategic location of warehouses
Not associated with suppliers as Wal-Mart