Lowering the High Cost of Selling to Wal-Mart.

By Sheldon Cwinn

Walmart is a very expensive customer to have, often requiring armies of people to manage and service their vendor managed inventory model. There are new ways of lowering those costs through automation.

“Wal-Mart is not only the world’s largest company but also one of the world’s most demanding customers,” said Sheldon Cwinn, vice president of Wisdom Analytics. “In our recent survey, 92% of vendors contacted maintain that Wal-Mart is the most expensive retailer to sell to. Wisdom Analytics automates many of the repetitive tasks that take time and effort and cost vendors money. Order scripting, demand planning, spotting POS exceptions and finding opportunities at store level, category management, improving instocks, and maximizing sell thru% are all benefits derived from Wisdom Analytics. Best of all, Wisdom Analytics is software that can be afforded by any vendor. It is intuitive to use, and easy to learn.”
 

Wisdom Analytics today announced the availability of Version 4.0 of its award winning software focused on driving the cost of doing business with Wal-Mart down. Wisdom Analytics has rapidly become the most adopted software solution for vendors selling to Wal-Mart.
 

“Wisdom has many of the features of its competitors but at a fraction of the price,” says Dan Batson president of the North West Arkansas Retail Link User Group and a Wisdom Analytics user at Fuji Film. “It helps to lower the cost of selling to Wal-Mart.”
 

“I remember the day one of our Retail Link analysts left us,” says Ronnie Kornbluth, president of UFO Jeansware. “The workload became staggering for all concerned. We never wanted to be in that position again. So we skeptically at first adopted Wisdom Analytics to help us out. Now we accomplish more than ever because Wisdom has made us so much more productive and we have watched our business with Wal-Mart steadily grow. We now have a better understanding of our POS position. Wisdom is a great tool and I would highly recommend it.”
 

Wisdom Analytics 4.0 new features include order scripts that can optionally be varied by long-range weather forecasts provided for every Wal-Mart store in North America. Advanced demographics that can show you who is purchasing your products at point of sale. Wisdom Analytics 4.0 also includes new and improved facilities for order scripting, demand planning, category management, and replenishment. Wisdom Analytics includes the 18 core reports and analytics framework that has traditionally made the software so powerful and easy to use. Wisdom Analytics turns Retail Link reporting into a real time online environment. MS Excel and continually printing dozens of multi-page reports every week is a thing of the past.
 

Wisdom Analytics is sold by annual subscription that includes upgrades and support. Subscriptions start at $5,000 a year. For more information call me - Sheldon Cwinn 514-341-5000 or email me sheldon@wisdomanalytics.ca.

Inside Wal-Mart's $50 Billion Buy American Campaign

Story by Sheldon Cwinn


Michelle Gloecker, SVP Home, leads the
New Initiateive.

Bill Simon, Wal-Mart's President of U.S. operations, laid out the vision in a recent speech at the National Retail Association's annual meeting. In order to stimulate the economy, and increase consumer spending, Wal-Mart will increase domestic purchases by $50 billion a year within the next 10 years. That is quite a lofty objective. Let's see how this initiative will impact not only Wal-Mart, but also the U.S. economy.

Wal-Mart already purchases two thirds of its products in the United States, so the $50 billion is already on top of that. So what the initiative actually amounts to, allowing for Wal-Mart's growth is a staggering $500 billion of domestic purchases a year.

The initiative will create jobs in areas such as manufacturing, industrial engineering, shipping and transportation, management, accounting, large equipment maintenance, and additional spin-off jobs in ancillary services such as restaurants and medical services. Products will be made closer to the point of purchase which will allow for additional flexibility because of reduced lead times and reduced transportation times. The cost recovery to Wal-Mart in warehousing and shipping will combine with multiple ripples in the supply chain, making the supply chain even more efficient than it already is. So there is a solid business case for the new initiative.

Which categories will be effected? Wal-Mart intends to grow U.S. manufactured merchandise on two fronts. By increasing what they already purchase domestically in categories such as sporting goods, apparel basics, storage products, games and paper products. And, helping create new U.S. manufacturing opportunities in categories such as textiles, furniture, pet supplies, some outdoor categories, and higher end appliances.

The 10-year lead time will allow Wal-Mart to adapt many of its existing suppliers back to domestic manufacturing. How will this work? Let's say Wal-Mart has a supplier for towels that currently come from factories off-shore. It is easy to figure out that with a few committments from Wal-Mart, an idol U.S. towel factory can be re-started and be back online, to make the merchandise domestically again. In fact, many off-shore manufacturers that used to be domestic suppliers,in many cases, still have equipment and production facilities that have sat empty, but remain in-place. Only Wal-Mart has the volumes that would make the numbers work to return to U.S. based manufacturing again.

The economics of manufacturing have changed rapidly. Previously investments went to Asia where wages were lower. The price of oil and transport was low. New Asian factories sprung up literally over night.Today some of these investments are nearing the end of their useful life. The equation is changing. There are tipping points in each product category where it is no longer profitable to manufacture merchandise off-shore.Through Wal-Mart's shear buying power, they can foster large enough orders to eclipse those tipping points and make it profitable to manufacture domesticly again.

By using new supply chain initiatives such as CPFR, Wal-Mart can collaborate with manufacturers and provide them with much more reliable and long-range forecasts, thereby allowing Wal-Mart to make long-range production committments which in turn will help new factories control their costs, expenses, and growth.

Wal-Mart's Supply Chain - The Result of a Convergence of Technology

By Brittany Wallach - walmart.blogspot.ca

“Sam Walton didn't care much for technology. The legendary patriarch of Wal-Mart Stores was well-known for his lack of excitement about ‘computers,’ as he called the company's IT systems. ‘Truthfully, I never viewed computers as anything more than necessary overhead,’ he wrote in his 1992 memoir, Made in America. ‘A computer is not—and will never be—a substitute for getting out in your stores and learning what's going on.’ Many still consider Wal-Mart's pioneering, IT-driven supply chain to be the world's most efficient, and the company's technology standards still command respectful attention from its thousands of suppliers.” – (Thomas Wailgum, cio.com)


The leading innovative progression of technology through Wal-Mart has been a key issue to its success. The technology aspect of the retail giant has kept Wal-Mart’s prices lower than its competition. Wal-Mart’s networks are cutting edge, communicating to every employee in the company from the cashier to the CIO. Strategically outsourcing their technical communication has allowed Wal-Mart to focus on the business itself with efficient mobility and low prices. The biggest move Wal-Mart has made to improve their system intelligence is outsourcing their databases to NCR Corporation bringing their total disk storage to over 7.5 terabyte make it the largest commercial database system in the world. The Neo Vista Company, providing Wal-Mart with software which was tailored to match the requirements of the database environment makes a great collaboration with their NCR databases. The software provided by Neo Vista, ERP, has helped management effectively communicate with other departments such has accounting and human resources which is called Data-Mining. Data mining enables any employee in Wal-Mart to access key information about any particular item sold in real time. To help the communication, Wal-Mart has pioneered satellite system linking stores and headquarters, but has switched to the frame relay method of transmitting data over shared, publicly owned phone lines which is used on its DS3 network that runs at 44.736 Mbps which virtual circuits connects multiple offices. Although one can see how a Data-Ware house is the foundation of Data-Mining, the incredible idea of reaching the information from any location has been so innovative that it had brought Supply Chain Management a basis for any retailer.



What my team has found the most interesting about Wal-Mart is the simplistic idea which had created supply chain management. The interesting aspect of the whole idea is how it all comes together. There has been so much though and innovation developed to create the success of supply chain management. The company who controls the database, the company who provides a particular software, the LAN connections, interface and the devices and components such as the network hubs which all collaborate to enable employees to access make sense of the information. Wal-Mart has been the pioneer of Supply Chain Management and it would not exist without the network planning and configuration of the Data-Warehouse, Data-Mart and Data-Mining.