Summary of Walmart in 2003

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Their supply chain management also close to real-time information about demand. This real time information about supply an demand reduce stock-outs and overstocking in Walmart. They also encouraged top 75 suppliers to include it in three-year strategic discussions involving decisions such as factory size and location. Walmart also tried developing cross-border suppliers,Walmart purchases of direct imports from China for $ 7.5 bi in 2003 and indirect imports for another $ 7.5 bi. Global procurement could reduce cost of general merchandise goods by 10 – 20%

Walmart required all suppliers to comply with its standards about child labor, workplace safety, local laws, etc. But in 2001 audit, more than half international suppliers factories violated Walmart standards, and one-third were in serious violation. But this not make Walmart cut their relationship with suppliers, and it makes Walmart’s name became bad in activists’ eyes.

DISTRIBUTION:

In the end of 2003, Walmart distribution netwrok consisted of 84 Walmart distribution centers, 19 SAM’s Club distribution centers in US and 43 distribution centers internationally. Typical of Walmart distribution centers required average investment of $70 m and operated by 700 staffs who paid $12-18 per hour and served approximately 150 stores daily. Walmart inventory turnover was 3.2 in 1973, 4.5 in 1993 and 7.6 in the beginning of 2003. This increase due to the rapid expansion of Supercenters and sales of fast-moving food merchandise. Walmart distribution costs is pretty low (2-3%) compared to others (4-5%), it because innovation to keep distribution costs low. Walmart known for its large scale “cross docking” where they transfer merchandise directly from inbound trucks to store-bound trucks without ever storing in distribution centers. It also develop radio frequency identification (RFID) system with suppliers to reduce need for unloading to checking products, and it already saving supply chain costs for 6%.

PRODUCT ASSORTMENT:

Walmart stocked mix of nationally branded (dominated) and private label products. Walmart manage each store product assortment by looking at detailed sales data and qualitative criteria (exclusivity, impulse purchasing, ease-in-store display, etc). They using Modular Category Assortment Planning System (MCAPS) combined with Retail Link involved suppliers to plan layout of products based on historical selling data, store traits and 10 different consument segments. This make a result with 10% of the visitors to domestic Division One stores left without purchasing a single item.

PRICING: Walmart as ELDP (every day low price) retailer. There are 2-4% pricing differential between Walmart and its best competitors, while other ranged to 10%.

OTHER MARKETING: Walmart promoted their ELDP by advertising, sponsoring community events and creating in-store excitement.

STORES: Most of walmart doemstic discount stores open 24 hours from Monday to Saturday and limited time in Sunday. Customer welcomed by “People Greeter” who also eyeing shoplifters. It also use its satellote network to cut authorization times to less than three seconds while customers doing payment with credit card.

PEOPLE:

MANAGEMENT:

FUTURE: Growing internationally but need to tackle performance problem even after 10 years international expansion

Offering basic financial services to its customers such as money orders, domestic and international wire transfers, bill payment services in 1990s. They want to acquire banking license but later decided to focus on offering basic financial services that didnt require bank ownership by targeting more than 20% of customers who didnt