Conclusion

In the late 1940s, when Sam Walton was franchising at Ben Franklin's variety store in Newport, Ark., he had a simple but momentous idea. Like any retailer, Walton was always looking for deals from suppliers. Typically, though, a retailer who managed to get a bargain from a wholesaler would leave his store prices unchanged and pocket the extra money. Walton, by contrast, realized he could do better by passing on the savings to his customers and earning his profits through volume. This insight would form a cornerstone of Walton's business strategy when he launched Wal-Mart in 1962.

Cost-cutting was, as one might also expect, an obsession in the Wal-Mart culture Wal-Mart uses supply chain management an IT-based system which is a critical necessity to ensure the smooth flow of inventory management. What it does for Wal-Mart is tracks inventory and information among business processes and across the company.

Wal-Mart uses Business Intelligence to enable the organization to extract the true meaning of information so that it can take creative and powerful steps to ensure a competitive advantage. By using OLTP Wal-Mart gathers the input information, processing that information, and updates existing information to reflect the gathered and processed information. Software aids in the data mining process.

Wal-Mart uses a warehouse with hundreds of terabytes of data to study sales trends and track inventory and other tasks. The system is also the foundation for Wal-Mart's Retail Link decision-support system that Wal-Mart's suppliers use to study item-level inventory and sales information. The chain has more than 6,000 stores, with some having almost a half-million SKUs each. Wal-Marts database tables have literally 100 billion rows. The retailers POS systems have to ring up some 276 million items, a day.

When learning about Wal-Mart there are some great strategies that should be mentioned. Wal-Marts supply chain management system focuses on squeezing every penny possible out of the supply chain. Wal-Mart is also careful to keeping the cost of purchased products at acceptable levels.

Wal-Mart focuses on Overall Cost Leadership, Bottom-line initiative along with the Run-grow transformation framework. Wal-Mart concentrates on maximizing Fulfillment, ensuring that the right quantity of products for sale arrive at the right time. Logistics, keeping the cost of transporting products as low as possible, they do this by owning their own trucks. When it comes to production they are careful to purchase from venders that insure quality. The concentration of revenue and profit ensures that no sales are lost because shelves are empty.

One of the things we found interesting about Wal-Mart is; Wal-Marts IT-enabled supply chain management system is the envy of the industry because it drives excess time and unnecessary costs out of the supply chain. So because Wal-Mart can buy low, it sells low. As a matter of fact, if your company wants to sell items to Wal-Mart for it to sell in its stores, you will have to do business with it electronically. If your company can’t do that, Wal-Mart won’t buy anything from you.

Saving people money to help them live better was the goal that Sam Walton envisioned when he opened the doors to the first Wal-Mart more than 40 years ago. Wal-Mart continues to lead the market in buying low and selling low.