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Technology is inevitable in every sphere of life today; it has always made things easier. Wal-Mart works on the same strategy, from the above description; we can understand how diversified Wal-Mart is and the volume of cargo it needs to handle for each of its business’s. Traditionally, it had started with computerization of individual stores with small billing machines and had then led to centralized billing for record keeping. The technology has grown by leaps and bounds and has become increasingly challenging to maintain large databases of information and maintain records. Powerful computers networked with high performance clusters maintain and store this data. This gives a picture as to how technology plays a vital role in today’s’ businesses.
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Traditionally, technology has been upgraded in billing systems and for storage purposes. A new area where technology could be applied to, where many expenses could be saved was in inventory management and logistics. Wal-Mart being so huge, needed to keep track of men and material sent across different countries and had to maintain hundreds of warehouses across the world. Bar-codes have been initially identified as a suitable technology to meet the purpose.
The secret of successful retailing is to give your customers what they want. And really, if you think about it from your point of view as a customer, you want everything: a wide assortment of good-quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience.”
Wal-Mart Stores, Inc. (NYSE: WMT) and its foundation are proud to support the charitable causes that are important to customers and associates in their own neighborhoods. Through its philanthropic programs and partnerships, the company supports initiatives focused on enhancing opportunities in education, job skills training, sustainability, and health and human services.
Walmart.com is a lot like your neighborhood Wal-Mart store. We feature a great selection of high-quality merchandise, friendly service and, of course, Every Day Low Prices. We also have another goal: to bring you the best shopping experience on the Internet.
Introduction to Supply Chain Management
SCM has core processes like sourcing, making, planning, delivery and returning. SCM is a distributed option that performs procurement of materials, processing the materials into finished products and distributes the products to customers.
Fig 4: Typical supply chain showing interrelations between all involved parties.
Service and manufacturing environments are exits in SCM. Supply Chain Management interacts between suppliers, manufacturers, distributors, retailers with the ultimate goal of providing either a service or a product to customers. It works with the customer at the head of the process when returning a product in reverse side.
Planning, purchasing, manufacturing, distribution and marketing organizations are integrated in SCM. To achieve the goal it will not work together. To work together to maximize the benefits SCM is an integration part for all involved.
SCM has three levels. They are strategic, tactical, and operational.
Fig 5: Three Levels of SCM
Strategic SCM is looking at market evaluation, capacity issues, new products and technology changes also deals with future plan. It is executed at the executive management level.
Tactical SCM deals with the short plan cycle. Tactical SCM deals with demand, inventory and supply planning. It is executed under a less senior level than Strategic SCM.
Operational SCM involves current planning activities. Operational SCM involves the majority of the operations. Operational SCM includes demand fulfillment, scheduling, production, transport and monitoring.
One example, Wal-Mart has done with SCM and its suppliers have relationship with Proctor & Gamble. Proctor & Gamble and Wal-Mart’s created software in a distribution centers this system monitors the supply level. When product becomes low then the system sends an automatic alert to ship more products to the respective distribution center. Wal-mart is using this system for an individual store at all locations.
Wal-Mart Introduction and its Business Processes
Wal-Mart is one of the largest organizations among the Fortune 500 companies, which has lot of branches around the globe. Wal-Mart is the largest retail chain which deals with the food, consumer products, electronics etc. Also it deals with the fortune 500 companies like GE and Microsoft.
Wal-Mart has three business segments, they are as follows.
A Business model is a way for successful business. Wal-mart is an innovating and improving the business model. It suits its organizational goals and to meet customer requirements.
To understand the Wal-mart business model, it is important to know the factors about the model and how it will be related to the organization.
To handle organizational needs Wal-Mart has restructured its business into two parts.
Tire & Lube Express
Wal-Mart’s Used Fixture Auctions
Wal-Mart Alaska Bush Shopper
Wal-Mart employs a combination of two Business Models viz.
B2B Single firm network Business Model – SAM’S CLUB segment of Wal-Mart supports small businesses. The main focus is to create its own network to coordinate supply chain and to provide exceptional value on brand-name merchandise at “Members Only” prices.
Web based B2B systems have unique business and technological differences with web based B2C systems. The requirements vary from industry to industry and may not fit into the shopping cart model.
A Business-to-Business system needs to consider the following points for a successful approach:
Integration with the existing legacy system
Model a format for intra-business and inter-business communication
How to device a customer pricing model
How to compile data from different sources
Why B2B at Wal-mart:
Wal-Mart Stores Inc. initiated a supply-chain communication infrastructure that eventually developed into Retail Link, which has been cited as the retail industry’s first Web-based business-to-business exchange. Today, more than 10,000 suppliers are linked to Wal-Mart’s B2B alliance.
Unlike many of the world’s largest retailers, Wal-Mart has decided to forego joining a B2B exchange and to focus on developing and extending Retail Link to the next generation.
Five reasons why Wal-Mart will remain independent from other B2B exchanges:
1. Wal-Mart is already gaining significant economies of scale of buying power.
2. Several companies joining B2B alliances believe they can learn from each other. Wal-Mart has developed its own expertise in proprietary information in terms of technology and supply-chain management in all facets of business and retailing.
3. Wal-mart operates things alone. Joint ventures it has had over the years have, in time, been bought back by Wal-Mart or come under its full operation.
4. There will be consolidation in the B2B exchanges. With Retail Link, Wal-Mart does not have to keep track of which alliance will succeed and which will fail.
5. The competition is playing catch-up.
A Business-to-Consumer system needs to consider the following points for a successful approach:
The catalog should be easy to use
Easy navigation for the customer to look around
Easy and up to date maintenance of pricing and catalog information
Ordering system should be integrated with the site
Stock control should be integrated with the site
Credit card processing facility
The above two models help Wal-Mart. The first model helps in achieving its business perspectives related to its firm’s organizational needs and the second model helps in its interaction with the customer and manages goods and services offered by Wal-Mart to the end users.
Of late there has been an upsurge in the need for web based Consumer-to-Consumer commerce. The C2C concept both act as add on to the existing B2C businesses or as stand alone businesses. These are many technological challenges that are faced while devising a successful C2C solution.
The following points needs to be considered:
Interface design to have easy navigation
Database maintenance of buyer and seller needs
High level database connectivity
It is an electronic commerce business model in which consumers (individuals) offer products and services to companies and the companies pay them. This business model is a complete reversal of traditional business model where companies offer goods and services to consumers.
This kind of economic relationship is qualified as an inverted business type. The advent of the C2B scheme is due to major changes:
Connecting a large group of people to a bidirectional network has made this sort of commercial relationship possible. The large traditional media outlets are one direction relationship whereas the internet is bidirectional one.
Decreased cost of technology: Individuals now have access to technologies that were once only available to large companies (Digital printing and acquisition technology, high performance computer, powerful software).
It is the online non-commercial interaction between local and central government and the commercial business sector.
Enhancing Decision Making
SYSTEM FOR DECISION SUPPORT
Management information systems (MIS)
Decision support systems (DSS)
Executive support systems (ESS)
Group decision support systems (GDSS)
1. Management information systems (MIS):
Help managers monitor and control business by providing information on firms. Performance and address structured problems. They typically produce fixed, regularly
Scheduled reports based on data from TPS.
2. Decision-support systems (DSS):
Support unstructured and semi structured decisions.
Model-driven DSS: Earliest DSS were heavily model-driven.
e.g. voyage-estimating DSS.
Data-driven DSS: Some contemporary DSS are data-driven that use Online Analytical Processing (OLAP) and data mining to analyze large pools of data.
e.g. business intelligence applications.
Components of DSS
Database used for query and analysis
Current or historical data from number of applications or groups.
May be small database or large data warehouse.
User interface often has Web interface.
Software system with models, data mining and other analytical tools.
3. Executive support systems (ESS):
ESS will supply the necessary tools to senior management. The decisions at this level of the
company are usually never structured and described as “educated guesses”. Decisions must be made in the context of the world outside the organization. The problems and situations senior executives face are very fluid and always changing, so the system must be flexible and easy to manipulate.
Characteristics of ESS:
Degree of use High, consistent, without need of technical assistance
Flexibility High – must fit executive decision making style.
Principle use Tracking, control
Decisions supported Upper level management, unstructured.
Data supported Company internal and external.
Output capabilities Text, tabular, graphical, trend toward audio/video in future.
Graphic concentration high, presentation style.
Data access speed Must be high, fast response
4. Group Decision-support systems (GDSS):
Interacting with computer-based system used to facilitate solution of unstructured problems by set of decision makers working together as group. To improve quality and effectiveness of decision-making meetings it is designed.
To facilitate the meeting more productive the below tools are used.
Planning, generating, organizing, and evaluating ideas.
Documenting meeting proceedings for others in firm.
Business value of GDSS
Supports greater numbers of attendees. Without GDSS, decision-making breaks down with more than 5 a endees.
More collaborative atmosphere, Guarantees anonymity.
Number of ideas generated and quality of decisions are increased and made.
It is most useful for idea generation, complex problems and large groups.
GDSS depends on many factors to get success.
Facilitator’s effectiveness, culture and environment, planning, composition of group.
Appropriateness of tools selected, etc.
e-CRM is being adopted by companies because it increases customer loyalty and customer retention by improving customer satisfaction, one of the objectives of e-CRM. Organizations are looking for ways to personalize online experiences of customers through e-CRM tools such as e-mail organizers, help-desk software and web development applications.
Components which are essential while implementing CRM:
Cross Selling and Up-Selling software
Direct Marketing and fulfillment
Customer support and service
Field Service Organization
Integrate multiple customer contact points.
Define new business processes and data.
Add new system applications and components.
Support multiple users simultaneously.
Add new data sources.
E-CRM in Wal-mart :
ECRM and PKG are partnership and are uniquely qualified to provide instruction for Wal-Mart’s Sustainable Packaging Scorecard. ECRM is a contributor the scorecard while PKG is one of the most respected packaging consulting firms today.
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ECRM (Efficient Collaborative Retail Marketing) provides Business Solutions by integrating Process, Vision and Technology TM. Efficient Program Planning Sessions (EPPS), Market Gate software, ECRM is helping retailers and manufacturers improve sales, reduce expense and to make market faster and more efficiently.
Ethical, privacy, health and security issues related to the use of Information Security:
A message sent by e-mail, the message is broken into packets and the packets are sent out over the Internet. The number of packets depends on the size of the message. Each message has the Internet address of the sender and the recipient. Packets from a single message may take different routes to the destination or may take different routes at different times. Before reaching their destination the pocket may passes through several different systems. It may take some places between us and the destination where the packets could be intercepted and examined.
There are two keys in the public key encryption – one public key and the other is private key. The public key needs to be known. For example, sender needs to send a message to the receiver; the sender will use the public key to encrypt the message and the receiver will decode the encrypted message by using the private key. Public key encryption has version software like Pretty Good Privacy (PGP).
Inappropriate Business Practices
Advertising, Commercial activities and marketing are readily available on the Web. The messages are sending to many unrelated newsgroups or interest groups.
When we use a computer system connected to the Internet, we are able to reach a rich variety of sites and information.
Using same token any system can be connected to the internet and can be reached in same manner by any other computer connected to internet.
Need to protect the system from the unauthorized persons accessing the information or information belonging to others who share the system. It may cause malicious or unintentional actions. It will destroy the stored information or halt the system. A lack of security results in damage, theft and a lack of confidence or trust.
Electronic commerce has some of the resources for Electronic Banking and Electronic Payment Systems:
Network Payment Mechanisms and Digital Cash
The National ECRC (Electronic Commerce Resource Center)
Knowledge is generated from parents to children. Knowledge is created, acquired and transmitted. In organizations, knowledge is transferred from bosses to employees and among its colleagues. The knowledge may be of techniques, procedures, events, rules, or navigation of the company itself.
Kinds of knowledge are important to an organization.
Data – As information professionals, the most important knowledge is that which is captured in our relational databases.
It is the only one part of the company’s knowledge. It is confined to information about products, people, activities and that are currently part of our environment. A data warehouse has little information about the future.
Intellectual capital -The patents and copyrights are the intellectual capital of the company. The ideas never came to fruition that time around.
Expertise – Expertise is anther important role in knowledge. Knowledge is the hardest of all to capture – the expertise of the company’s employees. People know the things like what works and what does not work in the company. If the company has low turn over then it will be tremendous body of the knowledge.
Implications of Knowledge Management to Companies
The idea to manage the knowledge itself there is a new equation “monitoring and improving knowledge by measuring and modifying the knowledge processes and their environment”.
How do you manage a knowledge-based company? Which is to say, how do you manage the knowledge of any company?
First, we get rid of the organization chart. In the past your job was defined (and constrained by) who was above you and who was below you in the organizational hierarchy.
The “boss” is now irrelevant. In the old days, the boss told you what to do and instituted controls to make sure that you did that. Now, the boss may not even really understand what you do. His job is to make sure that you have what you need in order to do what you are to do. He supplies resources and then gets out of the way.
Knowledge is created “through the reconstruction of older concepts as well as the invention of new ones. Contrary to popular belief, knowledge is not discovered like diamonds or oil. It is constructed through concepts that we already have through observation of objects and events. And it only becomes knowledge when a person, group, or society validates the concept.”
Processes in Knowledge support other business processes by providing knowledge needed by agents to perform acts also knowledge management attempts to bring together technology-based repositories of codified information the “supply-side” view and knowledge-enabling environments, or learning organizations the “demand-side” view.
Handling the standard print-out reports is an example of supply side information processing. An example of demand side processing is a data warehouse that allows flexible queries on a large body of corporate knowledge.
Knowledge processes within an organization so that goal-directed learning, innovation and adaptive evolution can occur. It is said to be a good knowledge management.
Supply Chain Management at Wal-Mart
Supply chain management at Wal-Mart can be described in 3 sections.
Procurement and Distribution
Wal-Mart’s procurement process involves reducing its purchasing costs as far as possible so that it can offer best price to its customers. Company procures goods directly from the manufacturers and bypassing all intermediaries.
Wal-Mart has distributed centers in different geographical places in US. 80% of inventory was supplied by its own Wal-mart warehouse. Depending on quantity of goods received, each distribution is dividend in different groups. The imported goods arrive in re-usable boxes and the goods to be used internally in US arrive in pallets. Inventory turn over rate is high.
It enables Wal-Mart to satisfy customer needs quickly and improve level of efficiency of distribution center management operations.
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