Wal-mart

INSTITUTO TECNOLÓGICO Y DE ESTUDIOS SUPERIORES DE MONTERREY CAMPUS ESTADO DE MÉXICO | Logistics of distribution. |

Extra Homework. Wal-Mart Fernando Aguirre Cárdenas 963569 |
Dr. Luis Herrera.Fecha de entrega: 1 de octubre de 2009 |
How does Wal-Mart charge its customer for distribution services?

We're all workingtogether; that's the secret.
Sam Walton

Objective
The objective of this research is to know and understand how the Wal-Mart’s distribution system works, and how does he deal with the suppliers the distribution of their products through the supermarkets in Mexico.

Introduction
Wal-Mart is the most important supermarket in the world, as we have seen in this course (Wal-Mart’s case) thisenterprise is in a continue growing caused by many innovations and improvements that they have been doing since their first years of existence. In this assignment I am going to consider one of these innovations, its logistics distribution and supply chain system.

As we know, Wal-Mart grows very quickly and it is now the most important supermarket in the world thanks to their efficient way to distributeall the merchandises, their negotiation with the suppliers and all the logistics details that are focused in reducing their prices to obey their slogan of always low prices. In the next image we can see the development of Wal-Mart in the United States since their first year until 2005.

Talking about Wal-Mart in Mexico, since 1991 they changed the way of operation of the supermarkets. In spiteof the way of work that all the suppliers have to deliver their own products in each store and everyone has their own system of distribution, Wal-Mart decided to create the distribution centers like a mechanism of automatic “restock”. Now-a-days in the United States there are 114 distribution centers.

According to the web page of Wal-Mart, this enterprise created the distribution centers withthe main purpose to guarantee and the creation of an efficient flow between the supplier and the final customer, creating a strategic element of the supply chain for the supermarkets and this with a final goal: Keep the contribution to improve the life quality for the Mexican families.

We can understand the importance of the distribution centers for Wal-Mart if we search about these facilitiesthat they have. The information that this enterprise show in his site says that they have 19 distribution centers in Mexico. I’ve also searched in the newspapers of our country and I founded that in this year (august), Wal-Mart inaugurated one of the most important Distribution Centers in our country and in Central America. This new DC is situated in Villahermosa, Tabasco and it will supply 7states of Mexico.

I decided to choose this important concept for Wal-Mart (Distribution centers) in my research, because I’m going to present the way of work between Wal-Mart and Grupo Modelo, the biggest Mexican beer enterprise, and how is the way that Grupo Modelo can sell their products in the supermarkets of Wal-Mart.
Development
It is important to mention first, that the next information Iwill explain in this research was taken from my brother. He works at Grupo Modelo in logistics & exportations department and he knows the process of selling the products of his enterprise to Wal-Mart.

How does Wal-Mart charge its customer for distribution services?
The first answer that he gave me when I asked how Wal-Mart charges its customers for distribution services was “it depend thevolume of your product”. Why? Because in the case of the beers, the product use a big space of the trucks that WM uses in their logistics transportation and there are other products that are smaller and the volume and number of pallets that WM used for them is lower like pharmaceutical product.

The volume it is the most important aspect of the product that Wal-Mart consider when they makes a...