STORE SPACES

Wal-Mart installs MSP’s dehumidication technology

BY Staff Writer

New York — MSP Technology, Huntington, N.Y., a leader in the development of energy-efficient dehumidification and energy recovery technology, announced that it has furnished two 20,000 cfm roof-mounted dehumidification units to Walmart and Sam’s Club supermarket locations in Puerto Rico. The units replace the locations’ gas-driven desiccant systems.

“We selected MSP Technology because they offered the only solution with high-performance and low-energy consumption in a simple 100% refrigerant based unit with minimal maintenance and low supply air dew point temperature,” said Edgardo Velez, P.E., president of Quantum Engineering and consultants to Walmart Puerto Rico.

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The formula(ry) for lower prescription drug costs

BY CSA STAFF

Walmart and healthcare partner Humana are out with a new prescription drug program called Rx4Value that guarantees saving and relies on the proven strategy of improving affordability by restricting choice to generic drugs.

Humana Pharmacy Solutions, the pharmacy benefit management subsidiary of Humana Inc., said the new formulary and the Walmart Rx Network guarantee up to 20% savings on employers’ average prescription price. Those claims are possible in part because the new Rx4Value formulary replaces certain brand-name drugs with generic alternatives that Humana said are equally effective and provide greater cost-savings. The program is available to self-insured employers and will be available to fully-insured employers later this year.

The new Walmart Rx Network will allow employers to select a Walmart-focused network for their employees to fill their prescriptions. The network offers self-insured employers an average of 10% savings on their annual average prescription price, according to Humana. The new Rx4Value formulary provides comprehensive therapeutic coverage while saving self-insured employers an average of 15% on their members’ annual average prescription price. Both options are available individually and can be combined for compounded savings, according to Humana. In total, self-insured employers who select both the network and formulary options will be able to save up to 20% on their annual average prescription price, meaning that a self-insured employer with 1,000 employees could achieve savings of as much as $400,000 per year, according to Humana.

“At Walmart, we’re committed to providing low-cost prescriptions and ensuring that people have affordable access to the medications they need to help them live healthier lives,” said Dr. John Agwunobi, president of Walmart U.S. health and wellness. “We are proud to team with Humana on this innovative benefit.”

William Fleming, president of Humana Pharmacy Solutions, called the program a simple and cost effective approach that helps employers better predict costs and save money.

“Pharmacy is the most used health benefit, and providing new, unique pharmacy benefits services that best meet employers’ and members’ needs directly supports Humana’s mission of helping people achieve life-long health and well-being,” Fleming said.

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McMillon balances freedom and framework internationally

BY CSA STAFF

More framework and less freedom is how Walmart International president and CEO Doug McMillon described the subtle shift occurring within a $126 billion division where he is looking to drive improved performance with a “powered by Walmart” approach.

“There are things that need to be unique in each market,” McMillon noted during the retailer’s annual international conference for investors held Thursday in Toronto. Being relevant to shoppers in individual countries requires speed of decision-making, which is how the philosophy of “freedom within a framework” originated. “We like the freedom, but we don’t get as much benefit of being part of Walmart as we like.”

Therefore, the company is looking to ratchet up leverage on common operating principles in pursuit of global mission of saving people money so they can live better. Some of the details of those common operating principles can get a bit arcane, such as when McMillon describes the process of assortment optimization, facings and holding capacity of shelves and how those variables feed into replenishment considerations and even front-end scheduling. The import of such details may not be fully appreciated by analysts, but they should appreciate McMillon’s familiarity with the intricate details of the business as a key to improved performance is leveraging global best practices and applying a higher degree of uniformity to operations.

Walmart’s global goal of saving people money so they can live better get’s McMillon “fired up,” and he’s convinced the Walmart U.S. productivity loop model of every day low costs as the enabler of every day low price, which leads to increased sales and further price reductions will work everywhere in the world.

Accordingly, the international division is looking to, as McMillon puts it, walk countries across the bridge of EDLP. Some are further along than others with such countries as the United Kingdom, Japan, Canada, Mexico and Central American nations already across the EDLP bridge. Others such as Brazil are in the process of crossing. Those planning to begin the process include China, South Africa, Argentina, Chile and India.

Adherence to EDLP as a business philosophy and broader application to all markets will drive Walmart’s international results, according to McMillon, but it requires a more consistent application of best practices from the common operating model. Individual countries aren’t losing control of decisions that need to be made locally around assortment, marketing decisions and customer service, but as McMillon looks across the expanse of international operations, the primary driver of growth in the coming years is expected to be the improved productivity of existing selling space as measured by same-store sales combined with aggressive expansion that now exceeds that of the United States.

Walmart international this year will add 30 million sq. ft. of selling space, well ahead of the 23 million sq. ft. added in 2011, 21 million in 2010 and 20 million in 2009. Another dimension of international growth relates to e-commerce as Walmart now operates 26 global Web sites, four mobile apps and seven facebook pages.

Last on the hierarchy of global growth platforms are acquisitions. Walmart will do them, according to McMillon, as a means to acquire capabilities, increase share in existing markets or if the right opportunity presents itself in a large high growth market where the company doesn’t have a presence.

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