Wal-Mart's Supply Chain Management Practices
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Case Details:
Case Code : OPER020
Case Length : 12 Pages
Period : 1998 - 2003
Organization : Wal-Mart
Pub Date : 2003
Teaching Note :Not Available
Countries : USA
Retail ing
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"When you start to collapse the supply chain, accuracy in
execution becomes critical. Any lack of accurate information and processes
creates costly bottlenecks in the flow of goods and materials."
- Bruce Richmond, Global head, Andersen Consulting.
Introduction
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The US-based Wal-Mart ranked first in the global Fortune 500 list in the
financial year 2001-02 earning revenues of $219.81 billion (Refer Table I).
Wal-Mart was the largest retailing company in the world. The company was much
bigger than its competitors in the US - Sears Roebuck, K-Mart, JC Penney and
Nordstrom combined (Refer Exhibit I).
In 2002, Wal-Mart operated more than 3,500 discount stores, Sam's Clubs and Supercenters in the US and more than 1,170 stores in all major countries across
the world. The company also sold products on the Internet through its website,
walmart.com.
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Wal-Mart was one of the largest private sector employers in the world, with
employee strength of approximately 1.28 million.
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The
company's founder, Sam Walton (Walton) had always focused on improving
sales, constantly reducing costs, adopting efficient distribution and
logistics management systems and using innovative information technology
(IT) tools. According to analysts, Wal-Mart was able to achieve a
leadership status ((Refer Exhibit II)) in the retail industry because of
its efficient supply chain management practices. Captain Vernon L.
Beatty, aide-de-camp to the commander, Defense Supply Center, Columbus,
Ohio said, "Supply chain management is moving the right items to the
right customer at the right time by the most efficient means. No one
does that better than Wal-Mart." |
Background Note
Walton was born in 1918 at Kingfisher, Oklahoma, US. After graduating from the University of Missouri in 1940, Walton worked for the famous retailer, J C Penney. In his first job, Walton had displayed the qualities of a good salesman. He realized the importance of building loyalty among customers as well as employees. In the mid 1940s, Walton gave up his job and decided to set up his own retail store. He purchased a store franchise from Ben Franklin in Newport, Arkansas. It was here that he learnt his first lessons in retailing
- offering significant discounts on product prices to expand volumes and increase overall profits. The business was successful and Walton soon acquired a second store within three years.
Wal-Mart's Supply Chain Management Practices
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