Professional Documents
Culture Documents
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?evenues Profits
? nk Comp ny ($ millions) ($ millions)
1 W l-M rt Stores u u u
2 Exxon Mobil u
3 Chevron
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4 Gener l Electric
5 B nk of Americ u
Corp.
6 ConocoPhillips u
7 AT&T
8 Ford Motor
9 J.P. Morg n Ch se
& Co.
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10 Hewlett-P ck rd u
á _he comp ny·s founder is S m W lton.
4
á W lton g ve up the job nd decided to set up
his own ret il store.
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á By 1969, W lton h d est blished 18 W l-M rt
stores.
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á W l-M rt w s offering low prices, customer
s tisf ction gu r nteed, nd hours th t were
re listic for the w y people w nted to shop.
Open ll night, for university students
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á W l-M rt suffered setb ck in 1992, when
W lton died.
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á _his phenomen l growth of W l-M rt is
ttributed to its continued focus on customer
needs nd reducing cost through efficient
§
§.
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á In the e rly 19 0s, W l-M rt bec me one of the
first ret iling comp nies in the world to
centr lie its distribution system, pioneering
the ret il § system.
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á _he hub nd spoke system en bled W l-M rt
to chieve signific nt cost dv nt ges by the
centr lied § §
§..
nd distributing them through its §
§
§
to the ret il stores spre d cross the
U.S.
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á W l-M rt emph sied the need to reduce
purch sing costs nd offer the best price to the
customer.
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á W l-M rt fin lies purch se de l only when
it is fully confident th t the products being
bought §
§
.
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á W l-M rt spends signific nt mount of time
meeting vendors nd underst nding their cost
structure.
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á _he computer systems of W l-M rt were
connected to those of its suppliers.
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á An import nt fe ture of W l-M rt·s logistics
infr structure w s its f st nd responsive
tr nsport tion system.
á W l-M rt believed th t it needed drivers who
were committed nd dedic ted to customer
service.
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á _o m ke its distribution process more efficient,
W l-M rt lso m de use of logistics technique
c lled ´cross-docking.µ
á _he system reduced the h ndling nd stor ge
of finished goods, virtu lly elimin ting the role
of the distribution centers nd stores.
O
á W l-M rt invested he vily in I_ nd
communic tion systems to effectively tr ck
s les nd merch ndise inventories in stores
cross the country.
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á W l-M rt w s ble to reduce unproductive
inventory by llowing stores to m n ge their
own stocks, §§ cross m ny
product c tegories, nd timely price
m rkdowns.
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á Employees t the stores h d the ´M gic
W nd,µ
which w s
linked to in-store termin ls through r dio
frequency network.
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á _he order m n gement nd store
replenishment of goods were entirely executed
with the help of computers through the Point-
of-S les (POS) system.
4
á Since the floor re of ny W l-M rt store
v ried between 40,000 to 200,000 squ re feet,
movement of goods within the store w s n
import nt p rt of logistics oper tions.
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á _he comp ny sked its suppliers to ship goods
in store-re dy displ ys c lled pretty d rn quick
(PDQ) displ ys.
O
á ?et il Link connected W l-M rt·s EDI network
with n extr net, ccessible to W l-M rt·s
thous nds of suppliers.
Om
á W l-M rt owned the l rgest nd most
sophistic ted computer system in the priv te
sector.
O
á By the mid 1990s, ?et il Link h d emerged into
n Internet-en bled SCM system whose
functions were not confined to inventory
m n gement lone, but lso covered
coll bor tive pl nning, forec sting nd
replenishment (CPF?).
OO
á In , W l-M rt worked together with its
key suppliers on re l-time b sis by using the
Internet to jointly determine product-wise
dem nd forec st.
Ou
á _hough CPF? w s promising supply ch in
initi tive imed t mutu lly benefici l
coll bor tion between W l-M rt nd its
suppliers, its ctu l implement tion required
huge investments in time nd money.
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á In efforts to implement new technologies to
reduce costs nd incre se the efficiency, in July
2003, W l-M rt sked its top 100 suppliers to
be ?FID compli nt by J nu ry, 2005.
Oh
á Bec use of the implement tion of ?FID,
employees were no longer required to
physic lly sc n the b r codes of goods entering
the stores nd distribution centers, s ving l bor
cost nd time.
O4
á Although W l-M rt w s optimistic bout the
benefits of ?FID, n lysts felt th t it would
impose he vy burden on its suppliers.
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