Information System Technology at Walmart - Essay Example

We hope that this research have given successfully a fruitful overview about the importance of information system technology and specially about the supply chain management, inventory replenishment system used by Wall-Mart stores, Inc. L. Introduction Wall-Mart Stores, Inc. , branded as Walter, is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. The company is the world’s third largest public corporation, according to the Fortune Global 500 list In 201 2, the biggest private employer in the world with over two million employees, and is the largest retailer In the world.

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In 1962, Sam Walton opened the first Wall-Mart store. Wallow’s dedication to providing quality goods at low ricers and friendly customer service have helped Wall-Mart to thrive throughout the years. Today, Wall-Mart Is a global leader and holds a secure position In the global industry. Wall-Mart is an example of supply chain management at its finest. By keeping prices low and their shelves well stocked, Wall-Mart has become the leading retail business in the united States.

One of many reasons Wall-Mart is able to offer such low prices and maintain a constant level of inventory is through a legendary inventory replenishment system triggered by point-of-sale purchases that is the best in the industry. We are interested in the study of this system, its influence and effects on the business, the business objectives served from using it, the advantages and disadvantages of this system.. II. Wall-Mart Stores, Inc (brief description) 11. 1. Products Manufactured/Sold Clothing, shoes, and accessories Electronics & entertainment Home decorating items Home improvement tools Automotive tools & parts 11. . Revenues $443. 9 billion n 2012 11. 3. Competitors Target, Smart, Cost, Best Buy supermarket chains Ill. Wall-Mart and Information systems Information Systems change the goals, operations, products, services or environmental relationships of organizations to help them gain an edge over competitors. Today Information systems can so dramatically boost a firm’s productivity and efficiency that businesses view Information as a weapon against competition and a strategic resource.

The information systems used by Wall-Mart, invoices, purchase orders, receiving lists, and payment receipts and can print bar code labels. An inventory management software system configured to your warehouse, retail or product line will help to create revenue for your company. The Inventory Management will control operating costs and provide better understanding. Wall-Mart was able to reduce unproductive inventory by allowing stores to manage their own stocks, reducing pack sizes across many product categories, and timely price markdowns.

Instead of cutting inventory across the board, Wall-Mart made full use of its IT capabilities to make more inventories available in the case of items that customers wanted most, while reducing the overall inventory management. Wall-Mart also networked its suppliers through computers. The Company entered into collaboration with P for maintaining the inventory in its tortes and built an automated re-ordering system, which linked all computers between P factory through a satellite communication system.

P then delivered the item either to Wall-Mart distribution centre or directly to the concerned stores. Benefits from that are Wall-Mart could monitor its stock levels in the stores constantly and also identify the items that were moving fast. P could also lower its costs and pass on some of the savings to Wall-Mart due to better coordination. Employees at the stores had the “Magic Wand”, a hand-held computer which was linked to in-store ermine’s through a radio frequency network.

Benefits from that these helped them to keep track of the inventory in stores, deliveries, and back up merchandise in stock at the distribution centers. The order management and store replenishment of goods were entirely executed with the help computers through Point-of-Sales (POS) system. Through this system, it was possible to monitor and track the sales and merchandise stock levels on the store shelves. Wall-Mart also made use of the sophisticated algorithm system which enabled it to forecast the exact quantities of ACH item to be delivered, based on inventories in each store.

It benefits by providing accurate data that even bulk items could be broken and supplied to the stores. Wall- Mart also used a centralized inventory data system using which the personnel at the stores could find out the level of inventories and the location of each product at any given time. It is also showed whether a product was being loaded in the distribution centre or was in transit on a truck. Once the goods were unloaded at the store, the store was furnished with full stocks of inventories on a particular item and the inventory data system was immediately updated.

Wall-Mart also is using bar code technology and radio frequency technology to manage its inventories and enabled accurate distribution of goods. Using bar codes and fixed optical readers, the goods could be directed to the appropriate dock, from where they were loaded on to the trucks for shipment. Wall-Mart owned the largest and most sophisticated computer system in private sector. The company used Massively Parallel Processor (MAP) computer system to track the movement of goods and stock levels. Wall-Mart used Cross-Docking system.

In a cross-docking system, pallets of material are received on one dock, broken down into customer specified loads while still on the dock and transferred to outbound trucks. Items are not placed IV. I Porter’s Competitive Forces The core strategy for dealing with competition is overall low-cost leadership. It attracts a broad spectrum of customers by supplying a wide selection of the lowest- cost general merchandise. Wall-Mart achieves a cost advantage by controlling its cost drivers and relentlessly wringing cost efficiencies out of its supply chain. V. Supply Chain Information system: Inventory replenishment system V. . Supply chain management Supply chain management integrates the supplier, distributor, and customer logistics requirements into one cohesive process. The supply chain is a collection of physical entities such as manufacturing plants, distribution centers, conveyances, retail outlets, people, and information, which are linked through consumption. Supply chain management has been recognized as an important business element due to the fact that decreased time, as well as cost to the customer, will greatly contribute to heir competitiveness within their perspective industry.

Supply chain management reduces product costs through the elimination of unnecessary steps and adds value to the customer service function by more closely managing the coordination among logistics providers and customers. It is primarily concerned with managing the company’s integration with transportation and information providers as it defines and drives the requirements for both. The ultimate purpose of supply chain management is to increase customer value while maintaining competitive prices.

It is costly concentrated on material and product sourcing, vendor evaluation, and purchasing. V. 2. Inventory replenishment system a. Function One of the supply chain management systems is the inventory replenishment system. The “continuous replenishment system” sends orders for new merchandise directly to suppliers as soon as consumers pay for their purchases at the cash register. Point-of-sale terminals record the bar code of each item passing the checkout counter and send a purchase transaction directly to a central computer at Wall-Mart headquarters.

This computer collects the orders from all Wall-Mart stores ND places orders with their suppliers to replenish the sold products. Suppliers can also access Wall-Mart’s sales and inventory data using Web technology. B. Objectives served by Wall-Mart via the system The replenishment system is strategic for Wall-Mart in different parts of the organization, both in services, environmental relationships and operations. I- At a business level: At the business level of strategy, information system is used to help the firm become a low-cost producer. The system also helps them differentiate products and serve new markets.