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Walmart plans major reorganization of operations

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BENTONVILLE, Ark. — In an effort to boost efficiencies, cut costs and get closer to the consumer, Walmart has undertaken a major structural reorganization.

While some of the most visible changes are in the company’s field operations team, merchandising and procurement have also been targeted.

The Walmart U.S. division is resorting its field operations organization into three geographic business units (GBUs): Walmart West, Walmart South and Walmart North.

Raul Vasquez, who was president and chief executive officer of Walmart.com, has been promoted to executive vice president and president of Walmart West, while Rosalind Brewer, who formerly was president of the Southeast Division, has been advanced to EVP and president of Walmart South. Walmart North is headed by Hank Mullaney, who was president of the Northeast Division.

In a closely related move, Wal­mart has created a new organization within merchandising called Store Merchandising Execution, which is intended to bring merchandising closer both to operations and to the customer. This unit is headed by senior vice president of store merchandise operations Andy Barron, who will report to both Fleming and to Bill Simon, EVP and chief operating officer of Walmart U.S.

Barron’s new group is tasked with designing merchandise strategies for each of the new GBUs and translating the strategies into customer-focused programs. To facilitate that, the In-Store Presentation and Store groups that were part of Walmart’s Store Experience organization have been moved into the Store Merchandising Execution team.

Several management posts have been reshuffled as part of the process. For example, Paul Beahm has been named senior vice president of health and wellness operations, replacing Jeff McAllister, who has been appointed SVP of operations for a newly created Texas division.

Andrea Thomas, senior vice president of private brands, has taken on an expanded role in merchandising as SVP of brand merchandising for home, hard lines and entertainment.

The third major change unveiled by Walmart, the creation of a consolidated global sourcing organization around a network of global merchandising centers (GMCs), was first announced last October at its annual analysts conference. At that time, vice chairman Eduardo Castro-Wright pointed out that Walmart’s total cost of goods totaled about $300 billion in 2008, of which $100 billion was dedicated to private label merchandise.

He further noted that Walmart directly sources only about 20% of its store brand goods, leaving it with a huge potential to reduce costs and improve product quality.

“We would be leveraging scale in ways that only a few people can — not only because of the size of Walmart, but also because then we can actually leverage the expenses associated with developing the brand, creating the products and sourcing the product,” he said. “And the more countries that participate, the greater the advantage.”

The global sourcing organization will be led by Ed Kolodzieski, formerly president and chief operating officer of Walmart Japan, who has been promoted to EVP. He reports directly to Castro-Wright. Kolodzieski replaces Jeff Macho, SVP and managing director of global procurement, who has left the company.


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