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Q: [*stocking <OR> "toothpaste" <OR> "shampoo" <OR> "detergent"] <AND> "Wal*Mart" ( Answered,   0 Comments )
Subject: [*stocking <OR> "toothpaste" <OR> "shampoo" <OR> "detergent"] <AND> "Wal*Mart"
Category: Business and Money > Accounting
Asked by: notoriousnoah-ga
List Price: $20.00
Posted: 18 Mar 2006 11:53 PST
Expires: 17 Apr 2006 12:53 PDT
Question ID: 708842
Can you verify whether Wal-Mart is "de-stocking."  Someone said they
saw a release mentioning "de-stocking," and that Wal-Mart expects this
to lead to a reduction of in-store inventories of their products
(detergent, shampoo, toothpaste, etc.).  In this article, WMT said fee
will result in $6 billion reduction.  Yet, I cannot find any such

Can you verify whether this 6 Billion is correct, and send a link to
source + command that you found it with.

If after a reasonably quick search you find nothing (i.e. 10-15 mins
tops).  Please charge the amount, and just let me know it cannot be
easily verified.

Request for Question Clarification by pafalafa-ga on 18 Mar 2006 13:09 PST
For what it's worth, I checked online and private database sources,
searching for articles on destocking that involved Wal-Mart, or also
that involved other large retailers.


Nothing's showing up.  Perhaps another researcher will come up with a
more creative search, though.


Request for Question Clarification by bobbie7-ga on 18 Mar 2006 13:43 PST
From WMT - Wal-Mart Stores Inc. at Citigroup 2006 Retail Conference and
Field Trip:

"In 2006, we're going to rollout to all our DC's and all our stores,
try grocery, paper and household cleaning items. In 2007, the
remaining (indiscernible) for the items will include canned food,
diapers, and formula. Our results are meeting our expectations, store
inventory has been dramatically reduced in our piloted areas. Sales
per store labor hour has been reduced, over the chain average.
Benefits for the suppliers and working very closely with suppliers,
reduction in store inventory will result in better store execution.
Across all items that keep us better in stock. Dry food suppliers will
be able to sell a wider range assortment to Wal-Mart because now we
have a cross-stock process to our regional DC's. No longer will
assortment be limited because of a lack of available staple stock
merchandise in our dry food.

But overall reduction in store inventory will show better store
execution across all items and keep us better in stock."

Does this help?

Request for Question Clarification by bobbie7-ga on 18 Mar 2006 13:45 PST
Or this?

"Beyond improvements for in-stock merchandise, Wal-Mart also sees
benefits from RFID in overall inventory reduction throughout the
supply chain, which is important to drive down costs. ?With little
effort we have been able to make inroads into this area," says Rollin
Ford, executive vice president for logistics in Wal-Mart. "Manual
orders placed by stores were reduced by approximately 10%."
Subject: Re: [*stocking <OR> "toothpaste" <OR> "shampoo" <OR> "detergent"] <AND> "Wal*Mart"
Answered By: czh-ga on 19 Mar 2006 13:26 PST
Hello notoriousnoah-ga,

Wal-Mart is a leader in demanding supply chain management practices
from their vendors that will save money for Wal-Mart. Vendor Inventory
Management with a drive to just-in-time stocking of shelves and
reduced stockout is one of Wal-Mart?s methods for improved supply
chain controls. A more recent development is Wal-Mart?s mandate that
its top suppliesr must implement RFID tagging by 2005. The $6 billion
figure in your question is frequently quoted as the anticipated
savings per year as a result. The RFID tagging leads to better
inventory management and is a way to implement ?de-stocking? and
reduced stockout in the consumer packaged goods area like the cleaning
products you?ve referred to in your question.

Below I?ve included some articles on the trends in RFID tagging in
retail in general and by Wal-Mart in particular. Please don?t hesitate
to ask for clarification if you require additional information.

All the best.

~ czh ~

September 30, 2005
RFID and price reduction in retail

According to Lee Scott, president and CEO of Wal-Mart, RFID will help
to improve visibility in the supply chain, which will reduce inventory
costs by $ 1 billion. According to analyst Erwin De Spielgelere,
Wal-Mart could save up to $ 8.35 billion. The elimination of manual
scanning at the pallet-level will result in labor savings worth $ 6.7
billion; reduction on out of stock will save $ 600 million; $ 575
million will be saved due to reducing shrinkage and better

RFID: The Time is Now

You've likely heard that Wal-Mart is requiring its top 125 suppliers
to implement RFID solutions at the case and pallet levels by January
2005. What you might not know is Wal-Mart will save anywhere from $6
billion to $8 billion per year by eliminating the need to scan bar
codes on pallets. Six to eight billion dollars.

RFID: Making sense of sensor-based technology

It's been estimated, for example, that retail giant Wal-Mart alone
could save $8.35 billion annually with RFID-that's more than the total
revenue of half the companies in the Fortune 500.

The estimated Wal-Mart savings breaks down as follows: $600 million
through avoiding stock-outs; $575 million by avoiding theft, error and
vendor fraud; $300 million through better tracking of a billion
pallets and cases; $180 million through reduced inventory; and a huge
$6.7 billion by eliminating the need to have people scan barcodes in
the supply chain and in-store. Small wonder, then, that Wal-Mart is
investing $3 billion in RFID over several years and is one of the main
drivers of RFID implementation.

Wal-Mart Extends In-Store Promos, RFID Tagging

Program Continues 
Meanwhile, Wal-Mart reportedly will expand its RFID tagging system to
1,000 stores and 600 suppliers in 2007.

Wal-Mart's pilot program began in 2005 with 100-plus suppliers tagging
pallets and cases for 500 stores and five distribution centers, to
track inventory and cut down on out-of-stocks.

The tags have cut out-of-stocks by 16 percent, and items with RFID
tags are restocked three times faster than untagged goods, said
Wal-Mart's VP-Information Systems Carolyn Walton at an industry
conference last week.

By January 2007, Wal-Mart will equip 500 more stores to read RFID tags
and will begin adding up to 500 more manufacturers to its roster of
RFID taggers, per news reports.

January 2006
how they did it

THE RESULTS OF WAL-MART'S RFID PILOT ARE NO secret?the world has known
about the 16-percent reduction in stock-outs and two-thirds drop in
replenishment times since October. Now we're learning a little more
about how they did it. In a white paper released late last year, the
mega-retailer identified specific process improvements that helped it
achieve those dazzling results.

Wal-Mart, P&G, Max Factor Lipfinity tracking test, USA
Oct 18, 2005

RFID and Working Capital Management
March 10, 2006, 1:26 pm

The March 6th Fortune shows just how critical my thinking is. Maggie
Overfelt reports that a University of Arkansas study shows that during
the first eight months of 2005, Wal-Mart's RFID equipped stores
reported stockouts declined 16%.
Lets do the numbers. Worldwide Wal-Mart reports $32 billion in
inventories. Say half the stockouts translate into inventory reduction
($2.6 billion) and that this flows to WMT's $11.3 billion bottom line.
That translates into $43 billion in market cap at WMT's current
multiple, a whopping 23% increase. Any questions?

RFID & EPC in the Retail Vertical, The ?Quiet? Revolution

The Solution
RFID solutions include readers to read the chip data, chips that are
placed as ?tags,? and the software and equipment used to read the data
and communicate the information to the retailer.  Tags can be placed
on pallets, cases, and even on the product itself.  Readers can be
handheld or mounted on a wall or door in a distribution, warehouse, or
retail facility.

The initial verticals that RFID is expected to impact are the retail
and consumer packaged goods (CPG) industries.  Many of the retail
vendors have already adopted the technology and in fact Wal-Mart is
requiring its major suppliers to implement the RFID technology in 2005
(Top 120-150 suppliers) and 2006 (Other 20,000+).


walmart savings $6 billion reduced inventory 
walmart supply chain management reduced inventory savings
Wal-Mart suppliers implement RFID
wal-mart OR walmart reduction stockouts
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