VALUE CHAIN ANALYSIS

PRIMARY ACTIVITIES
INBOUND LOGISTICS

Inbound Logistics is one of the critical areas in which Walmart excels. Effective inbound logistics
would want to have the least possible throughput time, and staging & sorting of goods inbound to
the warehouse would have to be organized to the point of making it as efficient as possible. The very
fact that Walmart can maintain 'everyday low price' is due to the sheer scale in which it operates in.
As volume ramps up, the holding cost increases, but for an effective inbound network, like
Walmart's, the goods are transferred to the main facility in the least possible time to avoid sales
conversion due to stockouts. In 2019 it introduced AI into its IL mix, which amplified its capability to
stage and sort things. The vast arrays of information being stored in its state-of-the-art IRL
(Intelligent Retail Lab) data centers makes the journey of a particular item from the warehouse to
the main facility swift due to pre-analyzed lead times and demand patterns.

OPERATIONS

Walmart operates in about 28 countries and under 63 banners with more than 11500 units. The
fundamental factor that drives the cost-advantage for Walmart is its scale of business. Given the
high volumes, it has a fair amount of negotiating power with its suppliers. Walmart's generic strategy
emphasizes low costs and low selling prices. Under its banner, the consumer goods are designed in
such a way that they are easy to mass-produce. Under quality, it operates under a three-tier quality
approach from lowest quality preference to the highest. Under its Sam's Choice brand, the items are
focused upon top-tier quality, which is much higher than retail standards. Forecasting is one of the
factors which gives Walmart a competitive advantage over other retailers. AI monitoring consumer
buying journey and analyzing seasonal sales reports can source enables it to source its products
cheaply. Walmart's warehouses maximize space utilization and efficiency for the company's trucks,
suppliers' trucks, and goods. With efficiency, cost-effectiveness, and cost-minimization, the retail
company satisfies the needs in this strategic decision area of operations management. Walmart's
bargaining power over suppliers successfully addresses this decision area of operations
management. The retailer's supply chain is comprehensively integrated with advanced information
technology, which enhances such bargaining power. For example, supply chain management
information systems are directly linked to Walmart's ability to minimize operations costs. These
systems enable managers and vendors to collaborate in deciding when to move specific amounts of
merchandise across the supply chain. Walmart focuses on the vendor-managed inventory model and
just-in-time cross-docking, making inventory monitoring and holding costs minimal.

OUTBOUND LOGISTICS

At the core of Walmart's inventory management technique is a supply chain practice called cross-
docking. Cross-docking involves delivering products from a manufacturing plant directly to
customers with little or no material handling in between. Cross-docking reduces material handling
and reduces the need to store the products in the warehouse. The products received from the
suppliers are cross-docked at the distribution centers and then forwarded to the stores. This keeps
the inventory and transportation costs low and cuts down on transportation time, thus eliminating
inefficiencies. In this way, the Walmart stores replenished immediately without having to wait for
long periods. This has reduced the costs for Walmart, and the benefits can be passed on to the
customers. Its more than 150 distribution centers are the hub of activity for its business. These
distribution centers serve the stores, clubs and deliver to the customers directly.

MARKETING AND SALES

Founded by Moore Walton and James Lawrence Walton in 1962, Walmart is the largest retailer in
terms of revenues and number of employees globally. Walmart generated revenue of $ 482 billion in
the year 2016. It serves more than 26 billion customers every week through its channel of 11000
stores in 28 countries. USP of Lowest price: Walmart has been known for its unique selling
proposition of offering goods at "Everyday low prices," and the exact prices are offered throughout
the chains. Products are competitively priced, and Walmart bargains aggressively with the
manufacturers to pass on the benefits to the end customers'. "Black Friday" is one of the famous
events of Walmart offering products at throw-away prices. It is one of the most successful strategies
of the company that is being copied by retail giants worldwide. Broad products assortments:
Walmart deals in large assortments of goods. The broad SKUs (stock-keeping units) help the
company retain its customers and help them play over volumes for-profit and offer products at the
lowest price.

SERVICE

Traditionally, Walmart had a poor reputation in providing customer services due to paying low
wages to customer service representatives to sustain its cost leadership competitive advantage. New
CEO Doug McMillion has announced his pledge to improve the customer service aspect of the
business. The pledge has been materialized via the announcement of the investment of USD 1 billion
in February 2015 in U.S. hourly associates to provide higher wages and more training for shop floor
employees.

SUPPORT ACTIVITIES
FIRM INFRASTRUCTURE

There are roughly more than 2400 stores of Wal-Mart across the world. Walmart serves over 100
million customers weekly worldwide. There are 1035000 associates, and the company is America's
largest private employer. The infrastructure of any organization plays a vital role in the success of
that firm. Walmart has built an extensive infrastructure that includes its management, supply chain,
human resources, distribution and fulfillment centers, and more. Apart from excellent management
of its technological and financial resources, it is now focusing on managing its employees better to
be more successful. It has kept increasing its investment in technology and people during recent
years, considering their importance for the brand's faster growth and success.

HUMAN RESOURCE MANAGEMENT

Walmart's human resource management addresses recruitment needs using different recruitment
sources and methods suited to different positions in the organization. The company also uses retail
industry-specific criteria in its selection process. To optimize employee retention, Walmart's human
resource management strategy includes a continually evolving compensation program, together
with employee-relations management and career development. The firm's HR managers also use
other approaches to improve morale and motivation in the workforce. Through this combination of
techniques and strategies to address business needs in recruitment, selection, and retention,
Walmart's human resource management effectively maintains adequate human resources to
support the firm current retail operations and planned future global expansion. In the past, Walmart
has faced severe criticism for its poor human resource practices. However, things have changed in
recent years. It had faced the most criticism over its wage policy. Now, it has improved the minimum
wages to more than $13 and is investing $2.7 billion in wages, education and training. Last year, it
also promoted more than 200,000 people to jobs with higher responsibility and better pay.

TECHNOLOGY DEVELOPMENT

By procuring organizations, to coordinate progressed tech and advanced methodology, it portrays its
assurance to construct keen stores — all to turn out to be more client driven by being tech-driven.
Using the most recent advancements, Walmart isn't just saving its difficult work on uncouth
undertakings yet in addition getting a good deal on power costs by disposing of the day by day .
Walmart is by all accounts in a real sense making a special effort to furnish clients with the most
advantageous experience. With this activity, Walmart would investigate how staple conveyance can
assist them with extending their scope to individuals everywhere on the globe — successfully.
Walmart is additionally putting forth attempts to remain serious with Amazon to control its
information escalated works easily. Also how cloud activity impersonates Amazon's utilization of
cloud-fuelled enormous information to drive computerized deals. Walmart is, all things considered,
working really hard of utilizing the force of inventive new companies to hoist its own hold in the
online business. Their technique, up until this point, has been to purchase organizations and
manoeuvre them into Store No.8 where they can give all the necessary sponsorship and get
inventive progressions. The share of advances that Walmart is and would utilize have been created
in-house, however there may be bits of modules that it is utilizing from outsiders. The store likewise
plans to quickly emphasize on new and various encounters across PC vision, computer based
intelligence, AR, AI, and mechanical technology.

PROCUREMENT

One of the key focus areas at Walmart is procurement. It has managed strategic relationships with
its suppliers to keep costs of material lower. These suppliers provide standard products and services
as mentioned in the suppliers’ code. Walmart stores use a highly technologically advanced and
efficient supply chain management system to keep things as efficient as possible. By using barcodes,
radio frequency identification (RFID) technology, they’ve been able to get massive amounts of
detailed product information attached to every product in their stores. That information is sent to
their database where it then goes to their inventory management system. This ensures Walmart
knows what it needs, how much it needs, when it needs it, and which store it needs to be in. The
system works because during the first 8 months of 2005, Walmart reported a 16% drop in the out-
of-stock merchandise at the RFIDequipped locations. Without a successful supply chain, Walmart
would deal with a series of issues that negatively affect customer satisfaction and profit margins. If
customers can’t find what they need in the store more often than not, they’ll likely end up going to
the competition to get it.