SOME SUCCESS STORIES IN SUPPLY CHAIN MANAGEMENT 
SOME SUCCESS STORIES IN SUPPLY CHAIN MANAGEMENT
Adriano O. Solis, Ph.D.
Academic Advisor, NAPM El Paso
Wal-Mart Stores Perhaps one of the most commonly cited success stories in supply chain management (SCM) is that of Wal-Mart Stores, Inc., which reported total sales of $191.329 billion and a net income of $6.295 billion during the fiscal year ended January 31, 2001 (see www.walmartstores.com). These figures represent a 15.9% growth in total sales and a 17.1% increase in net income over the immediately preceding fiscal year. International sales accounted for $32 billion of the total sales figure, increasing 41% over the previous year. Wal-Mart, which opened its first store in Arkansas in 1962, has retail stores in all 50 states of the United States and in the U.S. territory of Puerto Rico, as well as in Mexico, Canada, the United Kingdom, Germany, Brazil, Argentina, China, and South Korea. As of March 16, 2001, the company reported having 3,128 operating units (1,724 Wal-Mart discount stores, 910 Supercenters, 475 Sam’s Clubs, and 19 “neighborhood markets”) in the U.S. and 1,075 Wal-Mart international units—with more than 962,000 employees (“associates”) in the United States and 282,000 internationally.
Wal-Mart has been an innovator in SCM, which has allowed it to provide low-cost merchandise to its customers and undercut its competitors. Stalk et al. (1992) reported:
“In 1979 Kmart was one of the leading companies in the retail industry… At that time, Wal-Mart was a small niche retailer in the South with only 229 stores and average revenues about half those of Kmart stores… Today Wal-Mart is the largest and highest profit retailer in the world. How did Wal-Mart do it? The starting point was a relentless focus on satisfying customer needs; Wal-Mart’s goal was simply to provide customers with access to goods when and where they want them and to develop cost structures that enable competitive pricing. The key to achieving this
Adriano O. Solis, Ph.D.
Academic Advisor, NAPM El Paso
Wal-Mart Stores Perhaps one of the most commonly cited success stories in supply chain management (SCM) is that of Wal-Mart Stores, Inc., which reported total sales of $191.329 billion and a net income of $6.295 billion during the fiscal year ended January 31, 2001 (see www.walmartstores.com). These figures represent a 15.9% growth in total sales and a 17.1% increase in net income over the immediately preceding fiscal year. International sales accounted for $32 billion of the total sales figure, increasing 41% over the previous year. Wal-Mart, which opened its first store in Arkansas in 1962, has retail stores in all 50 states of the United States and in the U.S. territory of Puerto Rico, as well as in Mexico, Canada, the United Kingdom, Germany, Brazil, Argentina, China, and South Korea. As of March 16, 2001, the company reported having 3,128 operating units (1,724 Wal-Mart discount stores, 910 Supercenters, 475 Sam’s Clubs, and 19 “neighborhood markets”) in the U.S. and 1,075 Wal-Mart international units—with more than 962,000 employees (“associates”) in the United States and 282,000 internationally.
Wal-Mart has been an innovator in SCM, which has allowed it to provide low-cost merchandise to its customers and undercut its competitors. Stalk et al. (1992) reported:
“In 1979 Kmart was one of the leading companies in the retail industry… At that time, Wal-Mart was a small niche retailer in the South with only 229 stores and average revenues about half those of Kmart stores… Today Wal-Mart is the largest and highest profit retailer in the world. How did Wal-Mart do it? The starting point was a relentless focus on satisfying customer needs; Wal-Mart’s goal was simply to provide customers with access to goods when and where they want them and to develop cost structures that enable competitive pricing. The key to achieving this
References: Chopra, S. and Meindl, P. (2001). Supply Chain Management: Strategy, Planning, and Operation, Prentice-Hall, Upper Saddle River, N.J. David, F.R. (1999). Strategic Management: Concepts and Cases, Prentice-Hall, Upper Saddle River, N.J. Handfield, R.B. and E.L. Nichols, E.L., Jr. (1999). Introduction to Supply Chain Management, Prentice-Hall, Upper Saddle River, N.J. Simchi-Levi, D., Kaminsky, P. and E. Simchi-Levi, E. (2000). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies, McGraw-Hill, New York. Stalk, G., Evans, P., and Shulman, L.E. (1992). Competing on Capabilities: The New Rule of Corporate Strategy. Harvard Business Review, March-April, 1992, 57-69. Notes: 1. This is the second in a series of short, expository articles on supply chain management. These have been incorporated as sections in an article—forthcoming in the Encyclopedia of Information Systems—on supply chain management and information technology prepared by Professors Mo Adam Mahmood, Leopoldo A. Gemoets, and Adriano O. Solis, all of the Department of Information and Decision Sciences, The University of Texas at El Paso. 2. From March 5 through April 11, 2001, members of the National Association of Purchasing Management (NAPM) voted on the proposed renaming of NAPM to the Institute for Supply Management (ISM). The current District II of NAPM, with which NAPM-El Paso is affiliated, will be referred to as the Southwest Supply Chain Forum.