It for Business: Utilization of Informational Systems in Wal-mart

About Wal-Mart

The inventor of Wal-Mart is Sam Walton, now it had been the biggest retailer in this business. Help anyone to save their money is the mission of Wal-Mart, so their future life will be much better. To make this mission success, one point need to be focused on is you must be able to get a lower expense than other organization. Wal-Mart well known as the best company in retail business now. To always be the leading retailer in this world, Wal-Mart always research to improvise their idea in excellent competitive, process their statistic more efficiently, and guarantee the continuity of the business and security system.

Operational Excellence

Wal-Mart fit out their stores with scanning equipment that able to save data to computer system for cash register; this system can help Wal-Mart know which products that customer buy and can help to notify the manufacturer where to send the products. Wal-Mart requires its suppliers to memorize the item that have been labeled, so that they can be directly transferred to the store room, then they can reduce the warehouse cost and it’s easier to process the data.

Wal-Mart Business Models

Wal-Mart believes that information systems are very important to manage the business growth and suppressing structure costs. Wal-Mart built a sophisticated satellite network that connects point of sales in all of their outlets. The network is makes to provide salesman and manager with information regarding to the most recent sales and inventory status in order to increase product purchases. With a computerized system and via satellite, Wal-Mart can control their warehouses and inventories. So Wal-Mart will respond quickly to order supplies via the Internet to suppliers. Therefore, Wal-Mart will never run out of stock and will never overstock. This is the system that Wal-Mart use for their business models.

Customer and supplier intimacy

Wal-Mart develops RFID (radio frequency identify) systems to change the barcodes systems. The RFID chip also contains that information. Barcodes only can let the retailers know about the product information, but RFID is able to give data about a product's inventory to retailers and suppliers, as well as RFID informs the available of a product in the supply chain. With that information, suppliers know when they need to refill their products back at the store.

The use of RFID can improve the efficiency of the supply chain, reduce the empty supply of a particular product, prevents theft and falsification of products. The principle of this strategy is to supply from distribution centers to stores that are very far away, within a day. The location of the distribution center is very strategic, designed to be able to reach more than a hundred stores in a day, and one distribution range. By using a belt conveyer and the technique of cross-docking Wal-Mart supplies more than 80% of the goods to its stores through their own distribution network. Saturation strategy is designed to prevent competitors from entering and filling Wal-Mart's 'vacancy' stock; while receiving items, at the same time, filling orders from other Wal-Mart stores. This strategy is very efficient in saving on distribution costs, as it also operates for whole day.

Improved decision making

In 1990s Wal-Mart use some strategic of DSS, Wal-Mart belonging retail link a warehouse to keep the data of sale. Wal-Mart compile all data of sales from outlets to its data warehouse; consolidated data of retail links into the report that is needed and allocate those supply to suppliers with weekly estimation information. Interorganizational DDS is one of the Retail Link best examples. The retail links result has remodeled the store’s inventory, when you have many stocks of your product and in the right time then it may get more benefit for retailer and suppliers. And you can build a good partner relationship with your suppliers.

Competitive advantage

Wal-Mart has a competitive advantage from its competitors by using good outlet operation management and supplier efficiency. Wal-Mart applies real-time inventory systems, efficient store locations and distribution centers, transporting and using satellite and computerized networks that provide a lower cost advantage. This can lead to a competitive advantage in the price and quality of the goods from the supplier. Wal-Mart also provide low prices every week without losing attention to customer satisfaction, as well as developing a marketing strategy, technology that is not less competitive with competitor.

Survival

Wal-Mart uses technology that can optimize every transaction from each store, so managers can easily analyze transactions and can see patterns of purchasing the players used in order to manage inventory from each outlets. Wal-Mart is a retail company where the biggest cost incurred is theft on a small scale. To prevent it Wal-Mart provides about 50% portion for store incentives derived from savings on decreased theft rates in the store for each store to be motivated to address the theft problem.

In these 6 strategic business objectives Wal-Mart has done it perfectly. I only have one recommendation to Wal-Mart. My recommendation to Wal-Mart is that besides their supply chain information system that is efficient and effective, they need to focus on online systems where customers are able to request, order, buy product and able to deliver these products to consumers on within 24 hours. For consumers, consumers can choose to pay online with their credit card or by cash when their product has arrived. The system must be able to work perfectly to show all Wal-Mart’s products online without having any problem or jamming.