2. “A set of business activities that adds value to the products and services sold to
consumers for their personal use.”
How Retailers add value
Breaking bulk
Holding Inventory
Providing Assortment
Offering Services
5. • Walmart Discount Stores
• Walmart Supercenter
• Neighborhood Market by Walmart
• Super-mer-cado de Wal-Mart
• Market-side
• Sam's Club
6. Walmart’s Strategies
Non-unionized, Full autonomy to associates, Decentralized,
without hierarchy, profit sharing program, Job rotation, Stock
purchase plan
UPC at POS, EDI, Information system, VMI ,Cross ducking , Satellite
system, CPFR
Maintain long-term relationship, No single supplier accounting for
more than 2.4%, Selective suppliers ( P&G & GE), No nonsense policy
Inferior fixtures standardization, Trucks, Average store size 84,000
square feet
Always low
price,
always
Self service
Cash and
carry
Save money,
live better
credit card,
Layaway
plan
Outbound
Logistics
Marketing
& Sales
After Sales
Service
Inbound
Logistics
Primary
Activities
Firm
Infrastructure
Human Resource
Management
Technology
Development
Procurement
SupportActivities
VMI
system
Retail link
EDI
CPFR
Six days a
week(9~21)
Monday
(12:30~17:30)
Two step
hub and
spoke
distributing
system
ECR
Satisfactio
n
guarantee
policy
Quick
response
(QR)
Operations
Margin
7. Low cost and Standardization.
Empowered employees using technology (MagicWand)
Administrative style - Frugality ( Economy class)
Low transportation cost of 3% compared to industry
average of 5%
Manage own stocks and reduce pack sizes and timely
priced markdowns
Collaboration with P&G for maintaining inventory
A store devote only 10% of its square footage to
inventory.
8. Evolving relationship with Suppliers
Sharing of information electronically by open EDI interfaces.
Invested $4Billion in building a Retail Link private extranet
system which included the largest privately owned satellite
system.
Benefits Accrued:
To give more than 3500 suppliers computer access to point-
of-sale data
Converted the Extranet to Internet enabled system in 2001
9. Founded : 1957 in France
Sales : € 85.96 Billion
Stores :12,000 ( Self+ Franchise)
Employee :495,000
2nd largest retail group in world
Private Labels – more than 400 product
categories sourced locally
11. Carrefour has focus more on customers and his requirements
Identified 30 suppliers that account for 65% to 70% of our
business.
Private Labels – around 400 product categories
Reducing global inventory – Savings of $183 million / day
60% of the company's inventory is now controlled and co-
managed by key vendors
Voice picking technology reduced error rate from .5% to .1%
12.
13. Started in 1997-98 with pilot project with Sara Lee increasing sales by 32%
Massive improvement ( from 89% to 97%) of in-stock items
Lead times reduced from 21 days to 11 days
Implementation was costly and required huge analytics
Can be implemented with Large Suppliers
CRP --Continuous replenishment program
DRP--Distribution Requirements Planning
We're all working together; that's the secret – SamWalton
14. Walmart
Partnered P&G in the late 80’s and startedVMI.
Other partners like GE,Wrangler, etc
More vendors bought in the gambit ofVMI.
StrictVendor evaluation criteria's with
certifications like ISO, HACCP, etc.
Carrefour
15. VMI implementation
decision by top mgmt. Employees
convinced of the
benefits ofVMI EDI Standards were
SET
POS data sent
to
manufacturers
Manufacturer decides
inventory
replenishment
Goods are shipped to
Distribution center
Walmart sends
acknowledgement
Manufacturer gets
credited
16.
17. Walmart
Fast and responsive system
Company owned transport fleet of 3500 trucks
Replenish store shelves twice a week compared to
industry average of every 2 weeks
Carrefour
Uses 3PL when venturing into countries outside Europe
like Brazil and China.
Move to ‘River and Rail’ transport to reduce truck mileage
and safeguard the environment.
Average inventory is 37 days of COGS
Minimizing Pallet size for effective inventory management
18. Walmart
Done on 85% goods sold
Savings of 2-3% on sales
Continuous
communication needed
Carrefour
Moving to Cross docking
since 2009
19. Walmart
Fleet of 3500 self owned trucks
Complete ownership ofTransportation systems
Moving forward, Walmart is going to even recruit drivers who
will drive the trucks
All trucks equipped with latest tracking equipment's and are
tracked via satellite.
Carrefour
Owned+3PL system of transportation
20.
21. Walmart
Around 2% of all lost sales are due to the simple fact a store has
run out of an item, but 41% of lost sales are due to inventory
problems
Gain $287 million per year by avoiding 10% lost sales
Improved performance of stores by 63%
Was the one who pioneered bar codes in 1984
Out-of-stock items are replenished 3 times faster than before,
The out-of-stock items that have to be manually filled has been
cut by 10 percent.
Carrefour
ERP systems implemented by Carrefour backed by EDS
Generix is the main Supply Chain Software provider. Integration of
3PL and logistics capabilities of Carrefour and suppliers
Warehouse Management System Provided by Generix.
22. Use radio waves to identify objects
Tags with microchip and antenna built in
Store data (type, quantity, manufacturer, expired
date…)
Generate HF signal to transfer data
AllowWalmart to keep track of pallets at various
stage of supply chain
Locate where the pallet is and the condition of it
temperature
Humidity
Automatic sensor – avoid scanning codes one by
one
23. Invested in 1983
Simultaneously rang up sales and tracked inventory
deductions for rapid re-supply.
Electronic scanning of Uniform Product Codes (UPC)
- to price-mark merchandise
- to ensure accurate pricing
Self-labeling system
The merchandise replenishment process
24. Enabled an estimated 10,000 suppliers (about 90% of
Walmart’s dollar volume) to receive orders and interact with
Walmart electronically.
Later expanded to include forecasting, planning, replenishing,
and shipping applications.
Moved fromVAN EDI toWeb EDI in 2003.
Accenture ,IBM and SUN are main technology partners of
Walmart.
26. Suppliers asked to
ship goods in store-
ready displays called
PDQ displays.
Goods were packed in
PDQ displays
Direct replacement of
PDQ’s at stores
27.
28. Walmart
Procurement of goods bypassing all intermediaries
Vendors selected only if they provide goods at lowest prices
Significant amount of time spent in meeting vendors and understanding
their cost structures
Least shipping costs because of cross docking and other optimization
Carrefour
Prefers local vendors and customizes product offerings to cater to local
tastes
Not as cost conscious asWalmart with vendors