Walmart Valuechainanalysis 130228094748 Phpapp02

VALUE CHAIN ANALYSIS OFPRESENTED BY: ARPAN, BISHNUMONICASUBHASHRE KALYAN

"People think we got big by putting big stores in small towns. Really, we got big by replacing inventory with information." Sam Walton, Founder of Wal-Mart

The value chain as the internal processes or activities a company performs to design, produce, market, deliver and support its product. PRIMARY ACTIVITIESInbound logisticsOperationsOutbound logisticsMarketing and sales Service PORTERS VALUE CHAIN ANALYSIS

SUPPORT ACTIVITIES:-ProcurementTechnology development Human resource managementFirm infrastructure

VALUE CHAIN ANALYSIS OF WAL-MART

2485 Wal-Mart stores 682 Supercentres, 457 Sams Clubs, 5 Wal-Mart Neighbourhood Markets and 1007 units of Wal-Mart International. It serves over 100 million customers weekly worldwide. There are 1035000 associates, and the company is Americas largest private employer. FIRM INFRASTRUCTURE

Almost 60% of all managers in Wal-Mart stores started as hourly associates.The employees are encouraged to communicate openly, offer new ideas, take risks, strive for excellence and have fun. Employees are getting competitive wages and comprehensive benefits. In recruiting new associates the company begins a comprehensive recruitment program in the community where the store is to identify candidates.

HUMAN RESOURCES MANAGEMENT

Recruitment programs are well publicised and convenient, providing an opportunity for job applicants and the company to start getting acquaintedWhen new employees start at Wal-Mart they are presented to the two basic rules of Wal-Mart. These are: Rule 1: The customer is always rightRule 2: If the customer happens to be wrong, refer rule 1.

Wal-Mart set up its own satellite communication system in 1983Wal-mart uses Bar-coding & RFID technologies, different processes like efficient picking, receiving & proper inventory control of the products along with easy packing and counting of the inventories was ensured.Electronic data interchange (EDI)a computer-to-computer exchange of business documents

TECHNOLOGY DEVELOPMENT

PROCUREMENT

Wal-Marts process of procurement involves reducing its purchasing costs as far as possible so that it can offer best price to its customers. The company procures goods directly from the manufacturers, bypassing all intermediaries.

FLOW-TIME ANALYSIS

The store will re-stock the shelves with merchandise

Point-of-sale system captures data in real-time

Data is transmitted to warehouses for Inv. Mgmt.

Retail Link transmits data to supplier

Orders are generated from previous-day sales

Merchandise is loaded onto trucks using cross-docking

Merchandise is delivered to the store

Merchandise is manufactured based on historical and real-time data

Merchandise is shipped to warehouses

Customer made a purchase

The drivers are tracked regularly through Private Fleet Driver handbook Mart uses a logistics technique called Cross Docking Wal-Mart today about 60% inbound freight (closer to 80% for their grocery segment) is managed by suppliers. The important of Wal-Mart's logistics infrastructure was its fast and responsive transportation system. The distribution centres were serviced by more than3,500company owned trucks.

LOGISTICS-

Everyday low pricesLower prices from suppliers

More goods soldMore customersLower operatingCostsWAL*MART'S BUSINESS LOGIC

:Wal-Mart operations are comprised of three business segmentsWAL-MART STORES Super- centres Discount Stores Neighbourhood MarketsSAMS CLUB-SAMS CLUB

WAL-MART INTERNATIONAL

OPERATIONS

Employees wore blue vests to identify themselvesAisles were wideApparel departments were carpeted in warm coloursA store employee followed customers to their cars to pick up their shopping cartsCustomer was welcomed at the door by a people greeter, who gave directions and struck up conversationsMARKETING AND SALES

Opening hours at Wal-Mart generally range from 7.00 a.m. to 11.00 p.m. six days a week, and from 10.00 a.m. to 8.00 p.m. on Sunday. All Wal-Mart stores maintain uniform prices, except where lower prices are necessary to meet local competition. Sales are primarily on a self-service, cash-and-carry basis with the objective of maximizing sales volume and inventory turnover while minimizing expenses. SERVICE

Bank credit card programs, operates without recourse to the Company, is available in all stores.The replenishment system also helps the store adjust to customers demands. The stores are organised the same way all over the world, so the customers will recognise the stores wherever they go.

WAL*MARTS VALUE CHAINSuppliersWal-MartDistributionCenterSuppliersWal-MartStoreWal-MartShopperVendors are Wal-Mart's suppliers. They deliver products to Wal-Mart's distribution center or directly to one of the stores. Wal-Mart is able to bargain for the lowest possible price because of the high volume of sales. Therefore, Wal-Mart passes this savings to its customers.

Once the products are delivered to the distribution center, they are sorted and placed on trucks to be delivered to stores. This allows for less than 48 hour deliveries to stores and increased efficiency on trucks with backhauls.

After products are delivered to the stores, they are placed on the appropriate shelf location for customers to view. Store locations are located throughout the U.S. in rural and urban towns.

Customers can purchase products at very low prices and have the ability to return any item.

Wal-Mart Supply Chain

Walmart Value ChainThe World of Walmart MapGrowth of Walmart

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