...PROCUREMENT AND DISTRIBUTION
Wal-Mart always emphasized the need to reduce its purchasing
costs and offer the best price to its customers. The company
procured goods directly from manufacturers, bypassing all
intermediaries. Wal-Mart was a tough negotiator on prices
and finalized a purchase deal only when it was fully
confident that the products being bought were not available
elsewhere at a lower price. According to Claude Harris, one
of the earliest employees, “Every buyer has to be tough.
That is the job. I always told the buyers: ‘You are
negotiating for your customer. And your customer deserves
the best prices that you can get. Don’t ever feel sorry for
a vendor. He always knows what he can sell, and we want his
bottom price. ‘We would tell the vendors,’ Don’t leave in
any room for a kickback because we don’t do it here. And we
don’t want your advertising program or delivery program. Our
truck will pick it up at your warehouse. Now what is your
best price?” …
…LOGISTICS MANAGEMENT |
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An important feature of Wal-Mart’s logistics infrastructure was its
fast and responsive transportation system. The distribution centers
were serviced by more than 3,500 company owned trucks. These
dedicated truck fleets allowed the company to ship goods from the
distribution centers to the stores within two days and replenish the
store shelves twice a week. The truck fleet was the visible link
between the stores and distribution centers. Wal-Mart believed that
it needed drivers who were committed and dedicated to customer
service. The company hired only experienced drivers who had driven
more than 300,000 accident-free miles, with no major traffic
violation…
…INVENTORY MANAGEMENT
Wal-Mart had developed an ability to cater to the individual needs
of its stores. Stores could choose from a number of delivery plans.
For instance, there was an accelerated delivery system by which
stores located within a certain distance of a geographical center
could receive replenishment within a day...
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