Systems and Operations Management WalMart 1 WalMart Company
![Systems and Operations Management: Wal-Mart 1 Wal-Mart Company overview using key concepts from Managing Systems and Operations Management: Wal-Mart 1 Wal-Mart Company overview using key concepts from Managing](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-1.jpg)
![Wal-mart FACTS 2 q founded by Sam Walton in 1962 q the largest retailer Wal-mart FACTS 2 q founded by Sam Walton in 1962 q the largest retailer](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-2.jpg)
![Wal-mart & the COMPETITION 3 q To sustain competitive advantage, a firm must ensure Wal-mart & the COMPETITION 3 q To sustain competitive advantage, a firm must ensure](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-3.jpg)
![Wal-mart & the COMPETITION 4 Responsiveness A B operations frontier C High Low Price Wal-mart & the COMPETITION 4 Responsiveness A B operations frontier C High Low Price](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-4.jpg)
![Wal-mart’S PRODUCT ATTRIBUTES 5 q What are the 4 key product attributes? ? ? Wal-mart’S PRODUCT ATTRIBUTES 5 q What are the 4 key product attributes? ? ?](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-5.jpg)
![Wal-mart Strategy 6 WAL-MART STRATEGY & OPERATIONS STRUCTURE Enable everyday low prices and above Wal-mart Strategy 6 WAL-MART STRATEGY & OPERATIONS STRUCTURE Enable everyday low prices and above](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-6.jpg)
![Process Flow Measures: Wal-Mart 7 q Process Flow Measures – Flow Time (T) – Process Flow Measures: Wal-Mart 7 q Process Flow Measures – Flow Time (T) –](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-7.jpg)
![Process Flow Measures: Wal-Mart 8 q Wal-Mart is extremely efficient with low flow times, Process Flow Measures: Wal-Mart 8 q Wal-Mart is extremely efficient with low flow times,](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-8.jpg)
![Flow-Time Analysis: Wal-Mart 9 q Wal-Mart’s merchandise replenishment cycle is no more than 48 Flow-Time Analysis: Wal-Mart 9 q Wal-Mart’s merchandise replenishment cycle is no more than 48](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-9.jpg)
![Flow-Time Analysis: Wal-Mart 10 Flow-Time Analysis: Wal-Mart 10](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-10.jpg)
![Flow-Time Analysis: Cross Docking 11 Cross docking: take a finished good from the manufacturing Flow-Time Analysis: Cross Docking 11 Cross docking: take a finished good from the manufacturing](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-11.jpg)
![Flow-Time Analysis: Advantages of Cross Docking 12 q Reduces operating costs. q Increases throughput. Flow-Time Analysis: Advantages of Cross Docking 12 q Reduces operating costs. q Increases throughput.](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-12.jpg)
![Supplier Management: Retail Link 13 q Retail Link is a decision support system q Supplier Management: Retail Link 13 q Retail Link is a decision support system q](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-13.jpg)
![Inventory Management 14 q Inventory Management: » » Reducing critical activity times Eliminating non-value-adding Inventory Management 14 q Inventory Management: » » Reducing critical activity times Eliminating non-value-adding](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-14.jpg)
![Inventory Management: RFID 15 Radio Frequency Identification q q q Automated Data collection based Inventory Management: RFID 15 Radio Frequency Identification q q q Automated Data collection based](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-15.jpg)
![Inventory Management: How does an RFID work? 16 Inventory Management: How does an RFID work? 16](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-16.jpg)
![Inventory Management: RFID 17 q Wal-mart is the most famous retailer implementing RFID in Inventory Management: RFID 17 q Wal-mart is the most famous retailer implementing RFID in](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-17.jpg)
![Inventory Management: RFID Read Points 18 WAL-MART STORE READ POINTS Inventory Management: RFID Read Points 18 WAL-MART STORE READ POINTS](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-18.jpg)
![Inventory Management: Why RFID? 19 q Reduce the possibility of inventory shrinkage and out-of-stock Inventory Management: Why RFID? 19 q Reduce the possibility of inventory shrinkage and out-of-stock](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-19.jpg)
![Inventory Management: RFID Study? 20 Reducing out of stock? » 8% of all items Inventory Management: RFID Study? 20 Reducing out of stock? » 8% of all items](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-20.jpg)
![Thank you! 21 THANK YOU! QUESTIONS? ? ? = Thank you! 21 THANK YOU! QUESTIONS? ? ? =](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-21.jpg)
- Slides: 21
![Systems and Operations Management WalMart 1 WalMart Company overview using key concepts from Managing Systems and Operations Management: Wal-Mart 1 Wal-Mart Company overview using key concepts from Managing](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-1.jpg)
Systems and Operations Management: Wal-Mart 1 Wal-Mart Company overview using key concepts from Managing Business Process Flows Presented by: Casey Keller Rick Buonauro Aicha Aissaoui
![Walmart FACTS 2 q founded by Sam Walton in 1962 q the largest retailer Wal-mart FACTS 2 q founded by Sam Walton in 1962 q the largest retailer](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-2.jpg)
Wal-mart FACTS 2 q founded by Sam Walton in 1962 q the largest retailer in the world and the second largest corporation in the world (behind Exxon Mobil based on revenue as of 2006) q the largest private employer in the United States and Mexico q the largest grocery retailer in the United States q the largest toy seller in the United States q For the fiscal year ending January 31, 2006, Wal-Mart reported net income of $11. 2 billion on $313 billion of sales revenue (3. 5% profit margin)
![Walmart the COMPETITION 3 q To sustain competitive advantage a firm must ensure Wal-mart & the COMPETITION 3 q To sustain competitive advantage, a firm must ensure](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-3.jpg)
Wal-mart & the COMPETITION 3 q To sustain competitive advantage, a firm must ensure that its competition finds it hard to imitate its chosen position. COMPANY SALES (MIL) FY 2006 INDUSTRY AVG. 39, 992 Wal-mart 312, 427 TARGET 55, 363 KOHL’S 14, 247 DOLLAR GENERAL 8, 941 BIG LOTS 4, 534
![Walmart the COMPETITION 4 Responsiveness A B operations frontier C High Low Price Wal-mart & the COMPETITION 4 Responsiveness A B operations frontier C High Low Price](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-4.jpg)
Wal-mart & the COMPETITION 4 Responsiveness A B operations frontier C High Low Price
![WalmartS PRODUCT ATTRIBUTES 5 q What are the 4 key product attributes Wal-mart’S PRODUCT ATTRIBUTES 5 q What are the 4 key product attributes? ? ?](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-5.jpg)
Wal-mart’S PRODUCT ATTRIBUTES 5 q What are the 4 key product attributes? ? ? …. product cost, product delivery-response time, product variety, product quality q Wal-mart’s product cost? Low q Wal-mart’s product delivery-response time? Low q Wal-mart’s product variety? High q Wal-mart’s product quality? Low - Medium
![Walmart Strategy 6 WALMART STRATEGY OPERATIONS STRUCTURE Enable everyday low prices and above Wal-mart Strategy 6 WAL-MART STRATEGY & OPERATIONS STRUCTURE Enable everyday low prices and above](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-6.jpg)
Wal-mart Strategy 6 WAL-MART STRATEGY & OPERATIONS STRUCTURE Enable everyday low prices and above average profitability by procuring, distributing, and selling products, when and where needed, at lower costs than any competitor. Operations Strategy q q Short Response Times Low Inventory Level q q Operations Structure Fast Transportation System Cross Docking Retail Link RFID
![Process Flow Measures WalMart 7 q Process Flow Measures Flow Time T Process Flow Measures: Wal-Mart 7 q Process Flow Measures – Flow Time (T) –](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-7.jpg)
Process Flow Measures: Wal-Mart 7 q Process Flow Measures – Flow Time (T) – total time spent by a flow unit within process boundaries – Flow Rate – number of flow units that flow through a specific point in the process, per unit of time – Inventory (I)– total number of flow units present within process boundaries q Throughput (R) – average flow rate or average number of flow units that flow through the process, per unit of time q Little’s Law: Average Inventory (I) = Throughput (R) x Average Flow Time (T) or I=Rx. T q Inventory Turns or Turnover Ratio – number of times inventory is sold and replaced during a specific period, R/I
![Process Flow Measures WalMart 8 q WalMart is extremely efficient with low flow times Process Flow Measures: Wal-Mart 8 q Wal-Mart is extremely efficient with low flow times,](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-8.jpg)
Process Flow Measures: Wal-Mart 8 q Wal-Mart is extremely efficient with low flow times, high flow rates, and low inventory. q As of January 31, 2006: – Inventory as a percentage of the Balance Sheet was 23. 3%, down from 40. 1% in 1997 – Inventory Turnover was 7. 8, up from 5. 3 in 1997 – Days Inventory was 46. 8, down from 69. 6 in 1997
![FlowTime Analysis WalMart 9 q WalMarts merchandise replenishment cycle is no more than 48 Flow-Time Analysis: Wal-Mart 9 q Wal-Mart’s merchandise replenishment cycle is no more than 48](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-9.jpg)
Flow-Time Analysis: Wal-Mart 9 q Wal-Mart’s merchandise replenishment cycle is no more than 48 hrs. q Retail Link – real-time point-of-sales (POS) data transmission q Cross Docking q Fleet of 7, 000 trucks in US
![FlowTime Analysis WalMart 10 Flow-Time Analysis: Wal-Mart 10](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-10.jpg)
Flow-Time Analysis: Wal-Mart 10
![FlowTime Analysis Cross Docking 11 Cross docking take a finished good from the manufacturing Flow-Time Analysis: Cross Docking 11 Cross docking: take a finished good from the manufacturing](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-11.jpg)
Flow-Time Analysis: Cross Docking 11 Cross docking: take a finished good from the manufacturing plant and deliver it directly to the retail store with little or no handling in between.
![FlowTime Analysis Advantages of Cross Docking 12 q Reduces operating costs q Increases throughput Flow-Time Analysis: Advantages of Cross Docking 12 q Reduces operating costs. q Increases throughput.](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-12.jpg)
Flow-Time Analysis: Advantages of Cross Docking 12 q Reduces operating costs. q Increases throughput. q Reduces inventory levels. q Helps in increase of sales space. q Eliminates unnecessary handling and storage of product. q Reduces product damages and product obsolescence.
![Supplier Management Retail Link 13 q Retail Link is a decision support system q Supplier Management: Retail Link 13 q Retail Link is a decision support system q](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-13.jpg)
Supplier Management: Retail Link 13 q Retail Link is a decision support system q It is a bridge between Wal-Mart and its suppliers q It is an address you can visit via Internet to retrieve the sales data, inventory data, information on its development
![Inventory Management 14 q Inventory Management Reducing critical activity times Eliminating nonvalueadding Inventory Management 14 q Inventory Management: » » Reducing critical activity times Eliminating non-value-adding](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-14.jpg)
Inventory Management 14 q Inventory Management: » » Reducing critical activity times Eliminating non-value-adding activities Moving work from critical to non critical activities Redesigning the process to replace sequential with parallel processing
![Inventory Management RFID 15 Radio Frequency Identification q q q Automated Data collection based Inventory Management: RFID 15 Radio Frequency Identification q q q Automated Data collection based](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-15.jpg)
Inventory Management: RFID 15 Radio Frequency Identification q q q Automated Data collection based on an electronics – not a barcode Tag can be imbedded in the product or stuck on the exterior case or pallet Reader instead of a barcode scanner Allows fully automated data collection with the use of portals Can read many ID tags at a time
![Inventory Management How does an RFID work 16 Inventory Management: How does an RFID work? 16](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-16.jpg)
Inventory Management: How does an RFID work? 16
![Inventory Management RFID 17 q Walmart is the most famous retailer implementing RFID in Inventory Management: RFID 17 q Wal-mart is the most famous retailer implementing RFID in](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-17.jpg)
Inventory Management: RFID 17 q Wal-mart is the most famous retailer implementing RFID in its supply chain management system in January 2005. q It required its top 100 suppliers to use RFID technology at the pallet and case level by January 2005, 200 by January 2006, 300 by January 2007, and so on…
![Inventory Management RFID Read Points 18 WALMART STORE READ POINTS Inventory Management: RFID Read Points 18 WAL-MART STORE READ POINTS](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-18.jpg)
Inventory Management: RFID Read Points 18 WAL-MART STORE READ POINTS
![Inventory Management Why RFID 19 q Reduce the possibility of inventory shrinkage and outofstock Inventory Management: Why RFID? 19 q Reduce the possibility of inventory shrinkage and out-of-stock](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-19.jpg)
Inventory Management: Why RFID? 19 q Reduce the possibility of inventory shrinkage and out-of-stock situation. q Improve fulfillment rates. q Improve the customer service. q Reduce inventory and labor cost. q Eliminate many manual process and improve the operation efficiency.
![Inventory Management RFID Study 20 Reducing out of stock 8 of all items Inventory Management: RFID Study? 20 Reducing out of stock? » 8% of all items](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-20.jpg)
Inventory Management: RFID Study? 20 Reducing out of stock? » 8% of all items are out of stock (at any point of time) » Estimated potential lost sales: – Retailers: 3. 4% – Suppliers: 2. 6% » 26% improvement from no RFID to full RFID
![Thank you 21 THANK YOU QUESTIONS Thank you! 21 THANK YOU! QUESTIONS? ? ? =](https://slidetodoc.com/presentation_image_h/885132a1397d1e306cee4b8686b6ed06/image-21.jpg)
Thank you! 21 THANK YOU! QUESTIONS? ? ? =
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