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WalmartSCM - John Buerger Management Information Systems...

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John Buerger Management Information Systems December 8, 2010 Wal-Mart’s Supply Chain Management Year after year Wal-Mart sits atop the Fortune 500, with annual revenues greater than over 100 nations entire gross domestic products. They do not attain this status with catchy advertising like Apple, or through the dynamic innovation found at Google, but rather they achieve their success through keeping costs down, and prices low (dsausa). Wal-Mart is able to do this through an unprecedented supply chain management system, which finds its success through inventory management, technology, and logistics, which proves to be Wal-Marts greatest competitive advanatage. When Wal-Mart came into existence in 1962, the owner Sam Walton could not have predicted what it would become in 2010.The company was not incorporated until October 31, 1969 and was listed on the New York Stock Exchange in 1972 (walmartstores). Sam Walton started working in the retail business in 1940, with the company JC Penny. He then worked for a retail store named Ben Franklin. Within a few years, Walton opened a Ben Franklin franchise called Walton’s Five and Dimes which was a discount retail store that achieved higher sales volume by marking up slightly less than the competitors. By 1962, Walton had opened his first Wal-Mart store in Arkansas, and
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within 5 years he has opened 24 stores reaching $12.6 million in sales. In 1968, the first Wal-Mart out of Arkansas was opened in Missouri (walmartstores). Wal-Mart Stores Division US is Wal-Mart’s largest business subsidiary that accounts for 67.2% of net sales for 2006. It consists of Wal-Mart Discount Stores, Wal- Mart Supercenter, and Wal-Mart neighborhood market. Wal-Mart discount stores are general merchandise stores averaging 102,000 sq ft. Wal-Mart supercenters are an average of 197,000 sq ft and consist of general merchandise and a full service grocery store. This was a good approach for Wal-Mart because it made shopping more convenient for the customer. Wal-Mart neighborhood markets are grocery stores the average 42,000 sq ft (walmartstores). The three other parts of Wal-Mart Inc are Sam’s Club, Wal-Mart international, and Private label brands. Sam’s Club is a chain of warehouse clubs that sells groceries and general merchandise at wholesale prices, usually in large quantities. Sam’s club stores are “membership” stores. The company makes up the profit by charging a membership fee. For the consumer that buys more, the membership is in their benefit. Wal-Mart international consists of roughly 2900 stores in 14 countries other than the US. Finally, roughly 40% of Wal-Mart’s inventory is private label brands. Wal-Mart began offering private label brands in 1991 (walmartstores). Wal-Mart has been very profitable and successful due to the fact that they buy in such high volume. By having a distribution center, they have the ability to buy in greater quantities, get better discounts, and have to worry less about backorders which essentially allows them to have lower prices than the competitor. Some other factors that
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