Wal-Mart and Mattel: Supply Chain Management Best Practices

Chapter 6 Case 5 Page 216

Team Members
Elisabeth Cates

Yvonne Hildebrand
Jesse Janis Mary Napier Nina Wolf Eric Young

Walmart

www.walmart.com

CEO John B. Menzer

Executive Vice President and

President and Chief Executive Officer, Wal-Mart International Division since 1999 1995 1999 Executive Vice President and Chief Financial Officer for Wal-Mart Stores, Inc. 1999 CFO Excellence Award from CFO Magazine Prior to joining Wal-Mart, he was President of Ben Franklin Retail Stores, Inc
Jessi Janis 4

History - Founder
Sam Walton in 1962

On this picture in 1984 he

does the hula at high noon on Wall Street, making good on promise to associates after company achieves pre-tax profit of 8 percent in 1983.

Jessi Janis

History some important dates

1962: Company founded with opening of first Wal-Mart in Rogers,

Ark. 1967: Wal-Mart's 24 stores total $12.6 million in sales. 1970: Wal-Mart opens first distribution center and home office in Bentonville, Ark. 1977: Wal-Mart makes first acquisition, 16 Mohr-Value stores in Michigan and Illinois. 1978: Hutcheson Shoe Company acquired 1981: Wal-Mart makes its next acquisition with 92 Kuhn's Big K stores. 1983: U.S. Woolco Stores acquired. 1990: Wal-Mart becomes nation's No. 1 retailer.1990McLane Company of Temple, Texas acquired. 1997: Wal-Mart replaces Woolworth on the Dow Jones Industrial Average. 2003: Wal-Mart named by FORTUNE magazine as the most admired company in America.
Jessi Janis

Product / Services
wide variety of general merchandise
36 departments including family apparel, health & beauty

aids, household needs, electronics, toys, fabrics & crafts, lawn & garden, jewelry and shoes Pharmacy Department, Tire & Lube Express, garden center, snack bar or restaurant, Vision Center and OneHour Photo Processing Alaska Bush Shopper: If you're in Alaska and far from a Wal-Mart store, order items and have them shipped to you through our Alaska Bush Department.
Jessi Janis 7

Stock Split History

In 1970, Wal-Mart offered 300,000 shares of its common stock to the public at a price of $16.50 per share. Since that time, it has had eleven (11) two for one (2/1) stock splits. On a purchase of 100 shares at $16.50 per share on ist first offering, the number of shares has grown as follows:
2-for-1
Stock Splits On the Offering May 1971 March 1972 Aug 75 Nov 80 June 1982 June 1983 Sep 85 June 1987 Shares 100 200 400 800 1600 3200 6400 12,8 25,6 Cost per Share 16.50 Aug 25 4.125 2.0625 1.03125 0.515625 0.257813 0.128906 0.064453 $47.00 47.50 23.00 50.00 49.875 81.625 49.75 66.625 05.19.71 03.22.72 08.19.75 11.25.80 06.21.82 06.20.83 03.09.85 06.19.87 11.06.71 05.04.72 08.22.75 12.16.80 09.07.82 08.07.83 04.10.85 10.07.87

Market Price On Split Date

Record
Date Distributed

June 1990
February 1993 March 1999

51,2
102,4 204,8

0.032227
0.016113 0.008057

62.50
63.625 89.75

06.15.90
02.02.93 03.19.99

06.07.90
02.25.93 04.19.99

Stock development

Nina Wolf

Economic Impact for Year Ending Jan. 31, 2002 (USA)

WAL-MART Stores:1,636 Supercenters: 1,093 Neighborhood Markets: 31 Sams Clubs: 502 Distribution Centers: 106 Associates employed in U.S.: 1,043,970 Community involvement: $196 million Total amount spent with U.S. suppliers: $107 billion Totoal federal, state and local taxes paid: $1.2 billion Sales taxes collected and remitted: $8.5 billion

Nina Wolf

10

Net Sales 2003 (in millions): $ 244,524

Sales in millions
300,000 250,000 200,000

Sales

150,000 100,000 50,000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Year

Nina Wolf

11

Mattel

www.mattel.com

Robert A. Eckert, Mattel's chairman and chief executive officer

Robert A. Eckert is chairman of

the board and chief executive officer of Mattel, Inc., the worldwide leader in the design, manufacture and marketing of toys with approximately $5 billion in annual sales. Eckert joined Mattel in May 2000 from Kraft Foods, Inc., the largest U.S.-based packaged food company in the world. He received a Bachelor of Science degree in business administration from the University of Arizona in 1976 and an M.B.A. in marketing and finance from Northwestern University in 1977.
Eric Young 13

 1945: Mattel is foundet by Ruth and Elliot Handler and Harold Matt

Matson 1959: First Barbie 1960: Mattel becomes apublic owned company 1974: Mattels enters into in a Consent Decree with the Securities and Exchange Comission 1986: Mattel acquires Hong-Kong based ARCO industries 1986: Joint Venture with Bandai 1988: Purchase of Corolle S.A. (France) 1989: Acquisition of Corgi Toys Ltd. 1992: Acquisition of International Games Inc. 1994: Acquisistion of Kransco and J.W. Spear & Sons
Eric Young 14

Products/ Partners

Mary Napier

15

Net Sales in thousands

4900000 4800000 4700000 4600000 4500000 4400000 4300000
19 98 19 99 20 00 20 01
Mary Napier

20 02
16

Summary

Case 5

Summary
Mattel as a supplier of Wal-Mart
Supply Chain Management Benchmark company Used cutting edge technology to

Sharing of ideas and data is key to

build IT infrastructure that includes all aspects of the chain First to use Radio Frequency Identification (RFID) Implemented a collaborative planning, forecasting, and replenishment (CPFR) program, beginning a Just-In-Time Inventory Program

the just-in-time practices that are in place within Wal-Mart Data sharing from a retailers on a global basis allows suppliers to reduce their inventory costs, resulting in a lowering of overall costs Efficiency in supply chain is key for low-price leadership, resulting in far lower margins for suppliers and retailers Wal-Marts system can work well for all businesses and has been studied in-depth

Mary Napier

18

Question 1

Do you agree that Wal-Mart is the best supply chain operator of all time? Why or why not? in the workplace?

Question 1
Wal-Mart is one of the best supply chain

operators at the moment Using a supply chain management system that is progressively against its competitors and they dont even stop evolving. Pushing the limits of supply chain management, searching for and supporting better technology that promises to make its IT infrastructure more efficient.
Yvonne Hildebrand 20

Question 1
Wal-Mart uses radio frequency identification

(RFID) microchips that replace bar codes and security tags with a combination technology that costs less money. Wal-Mart shares its data with its suppliers. By implementing a collaborative planning, forecasting, and replenishment system (CPRF), Wal-Mart began a just-in-time delivery program that reduced costs for both the retailer and its suppliers.
Yvonne Hildebrand 21

Question 1
The system is still not perfected.

The system still is too expensive for low-

budget products. Signals cant be send over a long distance. Metal impedes the funk signals, so WalMart must still improve the system.

Yvonne Hildebrand

22

Question 2

What has Mattel learned from Wal-Mart? How well are they applying it to their business?

Mattels knowledge gained from Wal-Mart

Optimization of the supply chain for Wal-

mart by utilizing data gained from Walmarts inventory databases Maintaining a efficient supply chain so that there less excess inventory

Elizabeth Cates

24

Applications
Utilize the sales data on a daily basis to tailor to

the needs of supply and demand Pinpoint what product is selling and where so Mattel can accommodate to the manufacturing needs In doing so, both Wal-Mart and Mattel are successful in the way that they both are working simultaneously to fulfill the needs of retail customers

Elizabeth Cates

25

Question 3
What can other businesses learn from the experiences of Wal-Mart and Mattel that could improve their supply chain performance? Use an example to illustrate your answer.

Question 3

Important to save time and reduce costs Example: Hospital Usually small margins Surgical instruments and products listed in a database, which is connected to their supplier Everything will be recorded in the database Advantage

Knowledge who has used what Knowledge what every department need Reduce stock Receive only products, that they really need Supplier can optimize its production/stock
Nina Wolf 27

Questions?

Thanks for your attention!