1. Deriving Value From Supply Chain Innovation Bill Simon EVP and Chief Operating Officer Walmart U.S. October 14, 2009 Deriving Value From Supply Chain Innovation Save money. Live better.

2. 2 Deriving Value From Supply Chain Innovation Founded in 1962 $400+ billion corporate annual revenue last fiscal year 2.2 million associates 200,000,000 customers shop Walmart worldwide weekly Focus on female customer— she influences 85% of typical household purchases worldwide Walmart U.S. operates 3600+ stores in 50 states – 6000+ facilities worldwide 85% of American households shop our stores at least once per year Offer 120,000+ SKUs in a typical supercenter—motor oil to peaches Operates various store formats throughout the U.S. and the world Walmart Stores Inc. at a glance

3. 3 Deriving Value From Supply Chain Innovation Walmart US Logistics at a glance Mission is to provide a responsive, reliable and efficient network in order to deliver unbeatable prices in clean, fast and friendly stores Combined DC network delivers 5.5 billion cases per year Fleet drivers log more than 850 million miles per year 147 Distribution Centers Nine disaster distribution centers strategically located across the country. 88,000 associates 53,000 trailers 8,000 drivers 147 DCs 7,200 tractors 5 miles of conveyor

4. 4 Deriving Value From Supply Chain Innovation Sam’s Vision

5. 5 Deriving Value From Supply Chain Innovation Play “Quoting Sam”

6. 6 Deriving Value From Supply Chain Innovation Our mission is to save people money so they can live better

7. 7 Deriving Value From Supply Chain Innovation Aligned strategies focused on the customer

8. 8 What is the next BIG thing? “ Beware of the tyranny of making small changes to small things. Rather, make big changes to big things.” -- Roger Enrico, former CEO and chairman of PepsiCo Deriving Value From Supply Chain Innovation

9. 9 Business needs drive innovation Losing share to beer Beer more convenient Liquor unable to advertise on TV Utilized existing beverage technology Deriving Value From Supply Chain Innovation

10. 10 Innovation in Health and Wellness….$4 Rx and 90-day for $12 Competition more convenient Must compete on our strengths…price Innovation requires calculated risk Innovation requires courage

11. 11 How fast can you swim? “ Swim upstream. Go the other way. Ignore the conventional wisdom.” --Sam Walton Deriving Value From Supply Chain Innovation

12. 12 Integrated Logistics, Transportation and Store Ops My first ask of the team…… Challenge the current paradigms through recommendations to change how we manage the supply chain all the way to the customer. Deriving Value From Supply Chain Innovation

13. 13 Deriving Value From Supply Chain Innovation The supply chain strategy must support the retail strategy Must contribute to earnings per share Big transformational ideas…not incremental changes A complete and sustainable solution Must encompass the entire supply chain from the manufacturer to the customer Guiding principles of that ask

14. 14 Examples of what would be transformational Supply Chain Transformation Optimize the Base Deriving Value From Supply Chain Innovation Step Change Incremental Change Support Future Growth

15. 15 Deriving Value From Supply Chain Innovation The supply chain role in supporting Walmart’s business strategy Price Leadership Drive Profitable Growth Integrated Multi- Channel

16. 16 Deriving Value From Supply Chain Innovation Supply chain innovation supports customer strategy Creating speed and consistency at reduced costs Space Utilization Internally Integrated Broaden Supply Chain Boundaries

17. 17 Deriving Value From Supply Chain Innovation Early Results Image Area

18. 18 Deriving Value From Supply Chain Innovation Delivering efficiency in logistics FY09 Logistics Summary Cost per case reduced by 142 bps and by 425 bps holding fuel prices constant 8.6% increase in distribution center labor productivity 3.0% increase in cases shipped with 6.9% reduction in miles 2nd consecutive year without building a distribution center

19. 19 Deriving Value From Supply Chain Innovation In-Store inventory reduction improves customer experience Note: Sales and Inventory for stores only FY08 FY09 Store Inventory YOY Growth

20. 20 Deriving Value From Supply Chain Innovation GoodGreat GoodGreat Store backrooms – moving from Good to Great

21. 21 Continued improvements in productivity Note: Labor productivity measured as sales per labor hour. Backroom productivity measured as cases received per backroom labor hour. Front-End productivity measured as items transacted per cashier hour. Backroom Productivity: +8.6% Front-End Productivity: +2.6% Increase in Labor Productivity FY09 Productivity Deriving Value From Supply Chain Innovation

22. 22 Deriving Value From Supply Chain Innovation Mission leadership expectations 1.Understanding the mission leadership challenge: Imagine what we could achieve if we led all our people in one fully aligned and high- performance way of working around a fully aligned and inspired Walmart vision and strategy 2.Clear understanding of interdependencies — no silos 3.Clear about the high-performance leadership behavior required to win 4.One clear Mission Leadership Dashboard, against which each leader is able to monitor the “effect” they’re having on a regular basis

23. 23 Deriving Value From Supply Chain Innovation Q&A