The whole process of Wal-Mart's procurement chain

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As summer approaches, Wal-Mart's cotton shoes suppliers are eager to try.

In July and August, Wal-Mart Shenzhen Headquarters will hold the annual winter commodity procurement conference, and footwear suppliers will try on the sample shoes that may be popular this winter. Wal-Mart's purchasing department has a buyer who specializes in purchasing shoes, and he will host this "draft" contest.

After the competition, the supplier returned to the production place with the selected sample shoes. Usually, Wal-Mart's suppliers are also secondary buyers, who are not responsible for production, but send orders to factories. In Wenzhou, there are many such factories that indirectly provide goods for Wal-Mart.

Wal-Mart's Procurement Chain

About 45 days later, the shoes produced according to the order were officially off the assembly line. For example, shoes produced in Wenzhou will be transported to Beijing processing factory by car, and other manufacturers will send the shoe boxes produced. After the shoes are boxed, they are packed and transported to Wal-Mart Tianjin Logistics Distribution Center.

Tianjin logistics distribution center is the most important quality supervision link of Wal-Mart. The number of receiving window points and container inspections mainly depends on the quantity and whether there are empty containers. In addition, the relevant staff of Wal-Mart must accurately check the production batch number, safety inspection certificate, monopoly commodity license, anti-counterfeiting label and other documents provided by suppliers. Then directly sample the goods. After warehousing, Wal-Mart's purchase of winter shoes was basically completed. Soon, winter shoes will start from Tianjin Logistics Distribution Center and be sent to all parts of the country. In the Wal-Mart supermarket in the north, you may see thin cotton shoes on the shelves in August.

During the inspection, Wal-Mart only inspected shoes, boxes, bags, clothes and other commodities with naked eyes, and there was no relevant equipment. For example, Wal-Mart in Shenzhen has some problems with children's wear. Wal-Mart has no dye quality monitoring equipment. If the quality supervision documents provided by the supplier are complete, there is no problem with the clothes from the outside, and invisible quality problems such as dyes can also pass smoothly.

Therefore, from the process, it is very important whether the supplier carries out strict quality inspection on the products and whether the documents issued by the relevant quality supervision departments are true and effective.

Wal-Mart's Ten Commandments of Moses

There is also an unwritten rule between Wal-Mart and suppliers: if a product provided by a supplier has quality problems in a single store, the supplier will pay about 5,000 yuan; If there are many stores, or if it causes heavy losses, Wal-Mart can claim compensation through legal means.

Wal-Mart's suppliers are mostly selected long-term cooperative business partners. Every time a new product is added, in addition to the procurement department, the legal department will also participate in the audit, such as the trademark registration certificate or authorization certificate of the product, to ensure the legality of the product and prevent counterfeiting.

In order to put an end to the "collusion" between suppliers and buyers, and avoid the loss caused by the lax control of goods by purchasing personnel. Wal-Mart also has several departments that specialize in long-term training for suppliers: the loss prevention department teaches suppliers how to refuse bribes and complaints from buyers, and also requires suppliers not to pay bribes, treat people to dinner or provide convenience for the families of Wal-Mart employees. The finance department will educate Wal-Mart's suppliers on how to settle accounts quickly, while the commodity management department of the purchasing department will be responsible for training suppliers to use Wal-Mart's online electronic tools.

The corporate culture within Wal-Mart has risen to the height of corporate religion. It also has its own "Ten Commandments of Moses", the first of which is that dishonesty is not allowed. After the Shenzhen problem children's wear incident, according to the usual practice, Wal-Mart's loss prevention department will immediately investigate the suppliers and investigate whether the purchasing department has made mistakes. The Ministry of Government Affairs will immediately enter the crisis public relations stage. In any case, the cooperation between Wal-Mart and the supplier is expected to end soon. The person in charge of purchasing and the store manager may be punished accordingly.

If domestic consumers find that Wal-Mart has defective goods, it is suggested to sue Wal-Mart in the United States. Because American law has greater protection for consumers, and as an American enterprise, even if it violates the law abroad, American law will still strictly investigate it.

Note: This article is dictated by the staff of Wal-Mart's original purchasing department.

Wal-Mart's Procurement Secrets

Before February 2002 1, Wal-Mart did not purchase goods directly from overseas, and all overseas goods were purchased through agents. Wal-Mart asked Cui Renfu, the newly-joined Wal-Mart global vice president and president of the global procurement office, to spend half a year preparing to take over the global procurement business supporting the turnover of $200 billion in February 1 day. As a result, he not only set up more than 20 branches in charge of procurement around the world in a tight time, but also completed the task of global synchronous operation as scheduled, and made the global procurement business increase by 20% after one year, exceeding the growth rate of the whole Wal-Mart turnover 12%. So what is the secret of Wal-Mart's global procurement business?

Global purchasing organization

In Wal-Mart, global procurement means that Wal-Mart stores in one country import goods from suppliers in other countries through the global procurement network, and the purchasing department of Wal-Mart in this country is responsible for purchasing goods from suppliers in this country. For example, Wal-Mart stores in China purchase goods from suppliers in China, which is the work of the purchasing department of Wal-Mart China Company, and it is local procurement; Wal-Mart stores in other countries purchase goods from suppliers in China through the global procurement network led by Cui Renfu, which is called global procurement. This kind of global procurement needs appropriate arrangements in organizational form.

At present, the global distribution of enterprise activities has two mature organizational forms: one is geographical distribution, and the other is business category distribution. The regional business division system helps the company to make full use of the opportunities of the external environment such as economy, culture, legal system and market in the region. The disadvantage is that every merchant needs to pay a lot of money to realize intensive cultivation in the same area. The advantages and disadvantages of the division are just the opposite.

Cui Renfu's global procurement network consists of four regions: Greater China and North Asia, Southeast Asia and Indian subcontinent, America, Europe, Middle East and Africa. Secondly, according to the different countries in each region, set up national branches, and then set up satellite branches under them. National branches are the backbone of specific procurement business, with all-round functions such as factory certification, quality inspection, commodity collection, transportation, personnel and administrative management. Satellite branches decide which function or functions they have according to the quantity of goods collected.

Global procurement process

In Wal-Mart's global procurement process, its global procurement network is like an independent company, building a business bridge between Wal-Mart's global store buyers and global suppliers.

"Our global purchasing office doesn't buy anything." Cui Renfu explained that the global procurement network is equivalent to an "internal service company", serving Wal-Mart's store buyers in various retail markets-as long as the buyers put forward the demand for goods, the global procurement network will strive to find the best suppliers and the most suitable goods in the world. The global procurement network's service to shop buyers is also reflected in actively recommending new products to buyers. Wal-Mart's global procurement process is divided into repeated procurement and new product procurement. The so-called new product is the product that the buyer has not imported. For this kind of products, Wal-Mart has no ready-made suppliers, and needs the business personnel of the global procurement network to find new suppliers and products by attending exhibitions and introducing them. Because Wal-Mart is well-known, many manufacturers will provide their new products to the global procurement network. Then, the global procurement network will provide this information to buyers.

Supplier partnership

In global procurement, the global procurement network should not only serve foreign buyers well, but also invest in supplier selection and partnership building. "No matter which country's manufacturers are, our criteria for selecting suppliers are the same." Cui Renfu said that the first criterion is good quality and low price, the product price should be competitive, the quality should be good, and the delivery should be on time.

The second requirement is that suppliers should abide by the law. "Wal-Mart attaches great importance to social responsibility, so we hope that suppliers can abide by the law like us. We must ensure that they provide overtime pay, benefits and other due protection for workers in accordance with the requirements of the law."

Another point is that suppliers should reach a certain scale. "We have a principle that our procurement should not exceed 50% of any supplier's business." Cui Renfu explained that although the greater the quantity of purchases from the same supplier, the stronger the ability to negotiate prices, but it is not entirely a good thing for suppliers to trust buyers too much. If the supplier can continue to manage the operation, that's fine; If the management and operation of suppliers fluctuate, it will not only be out of stock for buyers. Once the buyer stops purchasing from the supplier, the supplier will face the danger of bankruptcy, which will also lead to greater social problems. "This is what we don't want to see."