3 Supply Chain of Walmart
3 Supply Chain of Walmart
Members:
Chan Man Ching
Chan Mong Tik
Chui Wai Ka
Lam Fei Fei
Man Ka Yu
Agenda
Background Information of Wal-
Wal-mart
Background mart
Supply chain of Wal-mart
Flow chat of the supply chain
Wal-mart Technology used in various stage of SC
Supply Chain
Impact of Wal-mart
Impact of
Wal-mart
Background of Wal-mart
~Well known retailer with heavy investment in IT
Sam Walton
No. of stores: 5311 units globally
Supply chain:
a method of collaborating horizontally –
among suppliers, retailers, and
customers to create value
Wal-mart Supply Chain Flow Chat
Radio, headphone
Retail Store
Manufacturer
Retail Store
Manufacturer Distribution center
Bar code, RFID
Point of sale terminal
Retail Store
Manufacturer Satellite system
Company Headquarter
Distribution Center
108 centers in USA
Place that various goods are gathered,
sorted and delivered to different store
About 80% of merchandises shipped fr
om centers
24 hours operation
Manufacturer 1 Retail store 1
Manufacturer 2
Retail store 2
Manufacturer 3
Retail store 3
Manufacturer 3
Trucks outside Wal-mart
Past----written instructions
Now----radio and headphone
English ?
Spanish?
Trucks outside Wal-mart
Use both hands
Keep contact with the headquarter
Behind or ahead the expectation
Adjust to any sudden changes
Benefit: Cost
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
to replenish stocks
Wal-Mart transmitted sales data, orders of
products, delivery plan and reports of
warehouse inventory status to them daily
to plan inventory levels, generate purchase
orders, and ship exactly what was needed
both benefited from reduced inventory costs
and increased sales
Business planning packets
Each Wal-Mart department developed
computerized, annual strategic business
planning packets for its suppliers
including:
department’s sales, profitability, and inventory targets,
macroeconomic and market trends, and Wal-Mart’s
overall business focus
Wal-Mart’s expectations on them
Suppliers’ recommendations
How Wal-mart affects suppliers
Domestic Suppliers:
Wal-mart imported 18 billion worth of g
oods from 5,000 Chinese suppliers in 2
004
Ranked as China’s 8 biggest trading pa
rtner ahead of Russia, Australia and Ca
nada
Used power to squeeze domestic suppl
iers’ profit
How Wal-mart affects suppliers
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
How Wal-mart affects suppliers
Domestic workers :
Face keen competition from overseas market
s,
offshore manufacturing
Close down of factories
Loss of jobs
Wal-mart Defense:
Insist not responsible for the off-shoring of m
anufacturing
Example :
Sanyo ( TV sets producers ) planned to close
the plant and move Mexico and Asia.
Wal-mart buys the TV sets from Sanyo if they
don’t move
Eventually stay in US
How Wal-mart affects dometic workers
Destructive Creation
Shrinking of manufacturing and labor
intensive sectors
Technical changes substitute unskilled labor
Create new jobs and expansion in services
and technology sector
Estimation : 225,000 job loss by outsourcing
in the next 15 years < 1.5% of the job
available in 2002
How Wal-mart affects dometic workers
Unemployment is a structural
problem ,rather than a cyclical problem
Mismatch of job skills with the market
demand
Unskilled labors cannot match with
increasing skilled labor demand
Not loss of job , but cannot find a job
matches with their skills
How Wal-mart affects economy
For example,
Globalization and lower technology cost,
Lead to higher American productivity growth
added $230 billion extra GDP between 1995
and 2002
Equivalent to extra 0.3% points of growth a
year
Wal-mart
Q&A