WAl-MART

BACKGROUND OF WAL-MART
SAM WALTON the founder of wal-mart.
World`s largest retailer. 6500 stores worlwide.

3900 stores in the US,2600 stores in the 13 other

countries. 1.3 million US associates (employees), 1.8 million worlwide, Serve 138 milion customers each week.

BACKGROUND OF WAL-MART
To provide a collection of quality merchandize and

services at every day low prices EDLP. In 1962 SAM WALTON owns a successful chain of stores under the BEN FRANKLIN stores. He realized the concept disount retailing; driving high-volumes of product through low-cost retail outlets. Sam established ware-house style stores and named it WAL-MART DISCUONT CITY.

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wal-mart grew in the 1960s -1980s because of two

reasons, Improved road infrastructure. Removal of RPM; stands for resale price maintenance, means an agreement between a manufacturer not to sell a specified product below a fixed price usually one given by the manufacturer.

RELATIONSHIP WITH SUPPLIERS

Globally it is believed that WAL-MART have around

90,000 suppliers; in which 200 were key global suppliers ,e.g Nestle, P&G , Unilever and Kraft. Good relationship with local suppliers to source WALMART`s private label merchandise. Maintain enormous power over it suppliers.

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WAL-MART controls with whom its suppliers speak,

how and where they can sell there goods and even encourages them to support WAL-MART in its political fights. WAL-MART dictates to suppliers where to manufacture their products, as well as how to design those products and what materials and ingredients to use in those products.

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Suppliers analysts worked closely with WAL-MART

supply chain personnel.

RELATIONSHIP WITH DISTRIBUTION

First distribution centre in the early 1970s.
114 US distribution centres 7800 drivers

75000 persons logistic division

Hub-and-spoke; design of high volume distribution

centres serving a cluster of stores. Stores were located in low rent, sub-urban areas, close to major-high ways.

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1980s it had built up the most efficient logistics of any

retailer. Mix of general merchandize; food and soft goods (clothing). Product was picked up at the supplier`s warehouse by WAL-MART in-house trucking division and was then shipped to WAL-MART`s distribution centres.

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The average distance from the distribution centre to

stores was approximately 130 miles. Merchandise from off-shore location was processed at coastal distribution centres. back-haul generated by wal-mart`s trucks, for hire carrier. Standard delivery procedures Uses the uniform operating standards to minimize the miscommunication between

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Traffic coordinators, truckers, and store level employees.

RELATIONSHIP WITH TECHNOLOGY

In the mid- 1980s WAL-MART invested in a central

database, store-level point-of- sale systems and a satellite network. In the early 1990s, WAL-MART developed RETAIL link; at an estimated 570 terabytes- which they claimed was larger than all the fixed pages on the internet. Retail link was the largest civilian database.

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WAL-MART`s satellite network also provided senior

management with the ability to broadcast video messages to he stores. REMIX; it was re-designing of the networks of distribution centres to reduce the percantage of out-of-stock merchandise. Creation of high-velocity food distribution centres for fast moving merchandise like seasonal items, toilet paper, tooth-paste, and paper towels.

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RFID; radio frequency identification tags
RFID tags were made on merchandise inorder to track

the inventory with goal of in-stock rates at the store level. Visibility of stock moved in trucks,through distribution centres and on to he stores. The company placed RFID tag readers in several parts of the stores, at the dock,

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Throughout the backroom, at the door from the stock

room to the sales floor and in the box-crushing area. Researchers, 25% of out-of-stock inventory in the US was not really out-of-stock. RFID tags cost approx 17 cents each.

RELATIONSHIP WITH CUSTOMERS

SAM was able to uncover best practices across the

company and implement these practices ASAP. WALTON held regular saturday morning meetings with top management at 7 a.m. WAL-MART believed that centralization had numerous benefits, including lowering lowering costs and improved communications.

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To kept the employees up-to-date , management

shared detailed information about day/week/month store sales with all employees during daily 10-minuteslong standing meetings. Close co-operation with suppliers some viewed it in a negative light. Membership-only warehouse stores-SAM`s CLUB.

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WAL-MART was popular among its customers because

of these formats Discount stores, department stores, speciality stores , supermarkets, internet retailers, and catalogue retailers. SAM personally visit and keep track of operations in each one due to his use of a personal airplane ., where to place stores to serve customers.

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Monitor customer traffic(by observing how full the

parking lot was). SAM also visited different schools to hire the smartest person in the class.