1. Wal-Mart Supply Chain Management
Case Study
Distribution Management
By;
SHRIKANT R. RANA

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SHRIKANT RANA ( FB/11-13/IIPM/D )
1. Wal-mart has been able to achieve respectable leadership in retail industry
because of its focus on supply chain management. Discuss in detail the
distribution and logistics system adopted by Wal-mart.
 Major strategy of Wal-mart is to buy goods from direct manufactures and they
don’t give any room to suppliers because they will pick up goods from suppliers
by own trucks.
 Wal-Mart preferred local and regional vendors and suppliers for better and fast
SCM.
 Wal-mart had over 40 distribution centers located at different geographical
locations in US. Over 80,000 items were stocked in these centers. And its own
warehouse directly supplied 85 percent of the inventory, as compare to 50-65
percents of competitors
 Ship pining cost for Wal-mart worked out to be roughly 3% as against 5% for
competitors.

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SHRIKANT RANA ( FB/11-13/IIPM/D )
2. The use of innovative information technology tools had benefited Wal-mart’s
supply chain management. In the light of the above statement, briefly explain
how IT benefited Wal-Mart’s logistics and inventory management.
 Wal-mart invested heavily in IT and communication systems to effectively track
sales and merchandise inventories in stores across the country.
 They have set up own satellite communication in 1983.
 Employees at the stores had the ‘Magic Wand’ , a hand – held computer which
was linked to in-store terminals through a RFID network.
 These helped them to keep track of the inventory in stores, delivers and backup
merchandise in stock at the distribution centers.
 And Point –of-Sales is done by Computer system.
 They have also developed algorithm system which enabled it to forecast the exact
quantities of each items to be delivered, based on the inventories in each store.
 They have also made use of bar code and radio frequency technology to manage
its inventories. This has enabled easy order packing and physical counting of the
inventories.
 They have invested $4 bn to build retail link system to monitor the sales of their
goods at stores and replenish inventories.
 And they owned the largest and most sophisticated computer system in private
sector by making it effective in all companies operation; Wal-mart provides
uninterrupted service to its customers, supplier, stockholders and trading partner.
 Because of technology they have reduced in lead time, faster inventory turnover,
accurate forecasting of inventory levels, increased warehouse space, reduction in
safety stock and better working capital utilization.

4. 4
SHRIKANT RANA ( FB/11-13/IIPM/D )
3. What were the supply chain management process adopted by Wal-mart and how
far were the effective? Discuss.
 They have developed fastest logistics infrastructure by giving service with 3,500
company owned trucks. And for that they have hired only experienced drivers
who are truly professional.
 And they have to deliver loaded trucks from the distribution center to retail store
each and every information and tracking of driver and truck is recorded by
computerized systems.
 Driver is allowed to bring trailer in specific time only, they unload trucks in
nights and in the gaps of two our so that they can track record of every items.
 And they have also taken record of every driver by “Private Fleet Driver
Handbook”. In which they keeps every detail of driver’s activities.
 And to make its distribution process more efficient, Wal-mart uses logistic
technique known as Cross Docking. By that they have reduced the handling and
store of finished goods, virtually eliminating the role of the distribution centers
and stores.

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SHRIKANT RANA ( FB/11-13/IIPM/D )
4. What was the nature of benefited derived by Wal-mart from the efficient supply
chain management practice and how far it has contributed to its sustainable
competitive advantage? Explain.
 Wal-mart was one of the largest private sector employers in the world, with
employee strength of approximate 1.28milion. They have focused on improving
sales, constantly reducing cost, adopting efficient distribution and logistics
management systems and using innovative IT tools.
 They have 40 distribution centers located at different geographical locations in
the US. And over 80,000 items in this centers.
 Their core competency are vast range of products at lowest cost in shortest
possible time.
 They have managed very good relations with suppliers and also vendors.
 They have always tried to deliver a product at minimum price to the customer.
And by analyzing market demand and customer needs they succeeded every task.
 Wal-mart’s consistent flow of products to support the supply function is also its
core competency. By enabling barcode technology and hand-held computer
systems they operates smoother and faster.
 Another technique they have adopted is cross docking by which they changed
their practice and focused ‘demand chain’ from ‘supply chain’ which meant that
instead of the retailer ’pushing products in to the system’, ‘ customer could pull
products, when they needed and where they need.