WALMART’S LEAN PRACTICES

IN INVENTORY

Group 9:
Cao Ngoc Khanh Nhi
Pham Ngoc Quynh Nhi
Nguyen Minh Thu
Tran Thi Hong Thuong
 1. OVERVIEW OF WALMART

2. LEAN THINKING

3. WALMART’S LEAN INVENTORY

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Overview of Walmart
 OVERVIEW OF WALMART
A global retail store established in Arkansas
by Sam Walton in 1962.

Became an international company in 1991.

WaLmart shares were listed on the New

York Stock Exchange in 1972.

Operates in Mexico as Walmex , in the

United Kingdom of Great Britain and
Northern Ireland as ASDA, and in Japan as
the Seiyu CO., Ltd.

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 OVERVIEW OF WALMART

The largest company in the world (by sales)

with global super stores and warehouses.

Bring customers a wide range of quality

goods at reasonable prices.

Employs 2.2 million people worldwide, serving 200

million customers a week at more than 10,000
stores in 27 countries outside the US.

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LEAN PRACTICES
LEAN IN LOGICTICS

A process to identify and eliminate waste of time, effort and

material from the supply chain to increase efficiency.

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LEAN IN INVENTORY

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 PRINCIPLES OF LEAN INVENTORY
MANAGEMENT

Pull
Value

Perfection
Responsiveness
Flow
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WALMART’S LEAN IN
INVENTORY
 Electronic Data Interchange (EDI).

Explain how systems communicate with each

other to allow the transfer of data

EDI allows Walmart to share data with participants

in the supply chain, especially suppliers

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RETAIL LINK

a Web browser, operating on the Internet,

integrated with EDI technology to help
suppliers all over the world have easy access

Walmart stores, Walmart corporate

headquarters, distribution centers and
suppliers

determine the amount of inventories

Walmart allows suppliers to access its

peripheral network to track sales
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 Benefits in
PULL

The supply chain is driven

by consumer behavior Keep storage costs low
which “pulls” replacement
stock from inventory.

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Benefits in
RESPONSIVENESS

Reduce lead Deliver goods to Adapt to

times and the retail stores change with
ordering costs and customers at customer’s
the right time behavior

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 RFID 
Radio Frequency Identification (RFID)

Identifies goods by radio frequency

Quickly count how many items are on the

shelf

High storage capacity

-> provide diverse information such as:
storage time, date of sale, price, and even
product temperature

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Benefits in Flow

Synchronize Avoid confusion Detect which Determine exactly

information and when customer’s products they what products are
physical flow of orders have many don't order and inside packages
goods across the types of inventory still be shipped
SC

  Reduce inventory management costs, waste time to check, less labor costs, the time to
transfer goods and speed up physical inventory process

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 Benefits in

RESPONSIVENESS

Automatically replenishes their inventory when levels of the inventory hit the reorder point

  Decreaseholding inventory costs and levels of safety stocks

Reduce inventory of obsolete products and dead stock
Monitor out-of-stock items, reduce stock-out costs and lead time

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 Just-in-Time Cross-Docking
in Walmart

Cross-docking is a logistics practice that is the

centrepiece of Walmart’s strategy to replenish
inventory efficiently.

Cross - docking is used when delivering goods

from Walmart’s distribution centers to
Walmart stores.

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Benefits in

Minimize inventory size, reduce the goods

stored

Less costly to maintain

Quickly deliver goods to the stores

Rapidly respond to fluctuations in demand

and related changes in the market

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 Just-in-Time Cross-Docking
in Walmart

Pull and Flow 

Walmart just produce and store the goods
at appreciable inventory levels - as meet
the customers' demand.

Walmart or suppliers only deliver

products whenever retail stores have out-
of-stock so it will minimize the keeping
costs and avoid overproduction.

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 Walmart has an inventory management system that has been
ABC Analysis instrumental in the company’s potential to achieve their success
in the world market - that is ABC system.

A items: the finished goods and operations equipment

regularly monitored and recorded. 

B items: the other supplies or materials used for operations

moderately monitored, moderate recording
accuracy. 

C items: janitorial supplies and office supplies like paper

the least monitored and recorded items.

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 ABC Analysis
Wrangler – Men’s Regular Fit Jeans is one of the top selling items of the
company (A items) (Walmart, 2009).

There are various activities related to this product which include procurement,
storage, material handling and quality control.

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 ABC Analysis
Flow
 Walmart can monitor their goods flow and also focus their resources on
the right items to reduce the waste in inventory goods and other logistics
activities.
 The company can reduce the cost of more expensive areas and allocate
more resources to the less expensive activity areas higher profits and
a true reflection of costs could be achieved.

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Transportation Management
By using the JIT method in inventory management, Walmart can ensure
the cycle of good’s replenished regularly without any disruption of low
stock or overstock. The delivering products from Walmart’s distribution
centers to Walmart stores is also stable.

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 Warehousing Management

Allows to transport goods from the distribution

center to retail stores without having to store
goods.

This helps Walmart's warehouses reduce storage

costs, allowing more space and space to store other
items.

For items with a short shelf life, the work that does
not need to be kept in the warehouse helps to
ensure the shelf life for the goods, avoid the expiry
date and reduce the cost of defective or damaged
items.

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 Customer Service

Stock-out prevention Profitable pricing

- Closely monitor the quantity and -IT capabilities and cross docking
status of goods at distributors and -->Better understand and manage better
stores its inventory management
- Tracking the levels of inventory at all - Reduce significant costs such as holding
times costs, storage costs, stock-out costs, labor
- Deliver the products in the faster time costs

- Cross docking-> speed up the -Product’s prices in Walmart are usually

inventory and delivery process cheaper.

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