Question

Case Study on Walmart using IT

A major reason for Wal-Mart’s success over the year was its constant emphasis on installing the most modern IT systems, which helped it achieve better economy of scale, distribution efficiency and pass on the benefits of the same to the customers. By offering low price to customers, Wal-Mart was able to generate more sales and minimize the promotional expenditure of the company.

By using IT, Wal-Mart was able to establish proper communication links with its suppliers, distribution centers and individual stores. Wal-Mart employed Electronic Data Interchange (EDI) that linked the computers at the stores, its distribution center and even key suppliers like P&G. In order to make its distribution system more efficient and to establish stronger links with its suppliers, Wal-Mart installed the satellite communication system at an estimated cost of $700 million. The system connected all the operating units of company and the general office with two way voice, data and video communication. Wal-Mart could keep a constant track of the movement of inventory from the manufacturing to the distribution centers and finally, to the stores. Its thousands of suppliers could obtain daily sales reports. The system also helped Wal-Mart to automate the inventory replenishment process.

Wal-Mart also used IT to improve its supply chain efficiency. Wal-Mart installed “Retail link” system that connected EDI networks to an extranet accessed and used by Wal-Mart’s business customers and its thousands of suppliers to obtain data relating to sales and stock levels at every Wal-Mart stores. The data enabled Wal-Mart’s suppliers to analyze market trends, undertake the necessary stock replenishment and plan out their production schedules to cater to Wal-Mart’s needs.

Apart from investing in building advance IT system Wal-Mart simultaneously built massive database of point of sales data at each of its stores. Using data mining Wal-Mart was able to determine the needs and preferences of its customers up to an individual store level and customize its merchandise according.

Q1. What are the benefits Wal-Mart obtained by using modern IT systems for its business and customers?​​​​​​​​​  

Q2. Briefly explain the benefit of using EDI over manual systems. Also explain all the benefits discussed in this case that is obtained by Wal-Mart by using EDI and satellites.     ​​​​​​​​​​  

Q3. How can Wal-Mart customize merchandise for each store? ​​     

Q4. How Retail-link system helped the suppliers of Wal-Mart?​​     

this is case sutday

Answer 1

ANSWER (1): Benefits Wal-Mart obtained by using modern IT systems:

Versatile updates: Walmart caused a ripple effect — and not in the great way — when it propelled and then immediately abandoned a portable request and pay initiative called Scan and Go. Customers found the program not exactly helpful and somewhat meddling, yet the retailer has just iterated another adaptation destined to be turned out to stores.

New highlights incorporate coordinated store maps, presently in 165 areas and turning out soon to more stores, as indicated by Mark Matthews, VP of digital increasing speed. And while the thousands of Walmart stores in the U.S. may seem indistinguishable especially supercenters, many are one of a kind as far as design and administrations advertised. Portable updates will presently show customers these subtleties, in any event, permitting them to get to accessible in-store administrations, make arrangements, check whether a film is accessible at their neighborhood Red Box or lease a floor covering cleaner for pickup.

The new store map includes propelled unobtrusively not long ago and as of now near a portion of versatile site hits initiated from customers in stores where it's dynamic are setting off to the maps highlight, Matthews told media during the visit.

Records: Generally, 80% of customers make paper records before making a beeline for the store, as indicated by Matthews, and endeavors to make an interpretation of this to digital devices haven't been broadly grasped by customers. Another rundown include in Walmart's application lets clients enter items in regular language, similar to "popcorn" or "espresso producer." The application pushes a limited number of brands or item determinations and lets the client pick a particular item. And in light of the fact that the rundowns are incorporated into new store maps, every item can be absolutely situated down to a four-foot-wide area on the rack.

Returns: Walmart is incorporating customer buy information into the application with the goal that the two items purchased on the web and in stores can be gotten to by the client, who can examine a paper receipt to use the component for non-digital exchanges. Customers will have the option to initiate an arrival within the application, choosing an item from this digital history and making a scanner tag on the cell phone. Once at the store, they can go to an assigned area at the client assistance counter, present the code to be examined and essentially drop off the arrival. The client then gets a message that the arrival was gotten.

Robots: Restocking racks, finding and returning lost items, and following stock levels are among the most tedious errands at any retail location. Walmart is presently using robots to facilitate the procedure. A meandering robot from Bossa Nova Robotics crosses the store gathering information, ensuring valuing is state-of-the-art and rack labels are exact, distinguishing out of stocks and monitoring overload items that are presently kept on the best in class to diminish private alcove trips for stock recharging. Walmart is using robots to restock racks, discover merchandise and track stock levels.

The robot checks the general merchandise divisions once per day and visits nourishment and consumables twice day by day. It sets man-made reasoning and AI. It's improved stock exactness, decreased worker turnover and improved the client experience, as indicated by John Crecelius, VP of Walmart U.S. Focal Operations.

This is at present in 50 stores and both the robot and Walmart are as yet figuring out how to best use the innovation. "There are parts to learn before turning it out to 4,500 stores," Crecelius stated, including how to help and give support on it. "We're figuring out how to utilize it and make an incentive with it."

Partners: Walmart is laser-centered for the current year around improving the work understanding for partners, and made various declarations with that impact during the week including another clothing standard and a program to pay for school. The retail monster likewise turned out new innovation instruments to help relates to the store.

New cell phones are combined with information from the Bossa Nova robot, which transmits a daily agenda to workers dependent on its findings. The robot takes photographs, calls attention to issues and correctly recognizes the area and item to move or restock.

There's additionally another planning application that gives workers remote access to their calendar total with the ability to swap shifts by means of a cell phone. The application is presently live for generally 50% of Walmart relates and will be accessible to all by the Christmas season, as indicated by Mark Ibbotson, official VP of focal tasks for Walmart U.S.

Walmart is using augmented reality to improve preparing projects and there's even a computer game that utilizes symbols in recreated encounters to achieve business-related errands and procure rewards.

Computerization: In the backroom, Walmart has computerized the way toward emptying trucks and arranging stock — an assignment so hated the organization could scarcely keep relates in the job. The suitably named "Quick Unloader" can move a full trailer of merchandise along a transport line, sort the items and get them to trucks for rack recharging in a small amount of the time it took by hand. The framework is presented in 30 stores and Walmart is "including 10 per week," said Crecelius. "We're placing them in as quickly as possible." Walmart administrators were resolute that computerization has not supplanted laborers, but instead, partners in those occupations have been moved to others, for the most part on the store floor to interface with customers.

On the web: Then there's Jetblack, Walmart's new attendant shopping administration, and the principal business to leave its Store No.8 hatchery. The program utilizes AI upheld by people to convey a curated collection of item proposals to its individuals from Walmart, Jet and a choice of other retail accomplices including brands like Pottery Barn and the Gap.

Jetblack is centered around very good quality shoppers in New York City, and just the individuals who live in concierge structures, at any rate for now. And while it's a world away from the commonplace Walmart supercenter now playing host to meandering robots and computerized unloaders, the hidden unifier is the utilization of restrictive innovation expected to separate the organization and keep a stage or two in front of — or at any rate in lockstep with — its greatest competitor.

ANSWER (2):

Benefits of EDI ver manual systems: (ELECTRONIC DATA INTERCHANGE)

• EDI replaces the manual procedures associated with requesting and circulation, making consistent electronic exchange between both purchaser and provider.
• EDI takes out waiting occasions related to manual preparation, gives clients continuous item and stock level information, makes benchmarks for future deals forecasting and lessens overheads by making a proficient business process.

Benefits obtained by Wal-Mart by using EDI and Satellites:

(Wal-Mart, 2012). Wal-Mart has been operationally effective even through times of quick development. This is partly because of its mechanical innovations. Indeed its yearly report (2010) indicates that in the course of the most recent five-year time span, Wal-Mart had invested over USS600 million in its inventory and distribution framework. It is very much perceived in the industry for adopting the most recent advancements and information frameworks that assist it with maximizing its gainfulness. It has used a few information frameworks over the span of its history, for example, point-of-offer frameworks, brought together correspondences frameworks, store satellite correspondence frameworks, information stockrooms, retail link frameworks, electronic information interchange (EDI), web-based stages, Radio Frequency Identification Devices, SAP, ERR and so forth. From activity adequacy to business methodology Initially, Wal-Mart endeavored to improve its tasks to turn out to be progressively productive and successful. It introduced point-of-offer (POS) frameworks in the 1980s and saw this as a value while investment. The POS frameworks had the option to handle information all the more effectively, helped in the evasion of overstocking, and improved inventory of the executives. POS is an automated framework that distinguishes everything sold, finds its cost in an electronic database, makes a precise deals receipt for the client, and stores this information thing by-thing in a database for additional analysis, for example, identifying client inclination and reordering inventory. The specialized basis of the POS framework is scanner tag use. Every item is appointed a standardized identification which is extraordinary to a predefined item; when the standardized tag is filtered by a scanner the information of every item will be put away in the database. Historical records permit the association to monitor deals patterns at some random point by identifying everything as an individual substance with one of a kind characteristics, for example, item type, cost, and so on. The utilization of IT frameworks reinforced Wal-Mart's upper hand in the retail industry. In 1987 it built up a private satellite correspondence framework which was the model for the retail link framework (RLS) which served to reinforce provider connections. RLS gave providers access to current deals and inventory information on their items on Wal—N'lart's racks. Following five years by and by this satellite correspondence framework was formed into what turned into a concentrated correspondence framework in 1992. Today, Wal—Mart utilizes media communications to legitimately link its stores to its focal PC framework and from that framework to its provider's databases. This framework gives Wal-Mart the benefits in direct reordering and coordination, decreased inventory costs (in Wal—Mart stores just 10 percent of the floor space is saved for inventory zone contrasted with the 25 percent normal for the retail industry), and lower manufacturing costs. This is likewise useful to their providers who have increasingly consistent requests and are subsequently ready to bring down their creation costs, advantage from economies of scale, and pass a portion of these savings back to Wal-Mart and in the long run to shoppers. According to Porter's nonexclusive technique hypothesis, this is a cost-administration procedure; at the end of the day, Wal-Mart transforms its activity viability into the business methodology. Consistent with the selection of the POS or unified correspondence framework, advancement and acknowledgment of scanner tags required concessions to standards, which prompted the improvement of an all-inclusive item code (UPC) framework to be established. This framework is a standard strategy for identifying products with numbers and coding. IT frameworks at Wal-Mart are applied in significant territories, for example, inventory the executives, provider the board, administrative administration, and client the executives. In request to improve its inventory the executives, Wal-Mart picked internet convention for electronic information trade and electronic information interchange (EDI) frameworks; it associates thousands of providers around the world. EDI frameworks related to cutting edge media communications permit information to be moved at fast between branch PCs and the focal framework in request to maintain an ongoing database with complete information on inventory levels. Accordingly, IT frameworks improve information coordination and processing with its providers and diminish lead time with distributors. Every day Wal-Mart stores have colossal measures of incoming shipments, and in request to oversee them adequately and effectively Wal—Mart conveyed an innovative innovation, radio recurrence ID gadgets (RFID) as electronic item codes, and required its providers to label all shipments with RFID so that Wal-Mart can profit by one-stop information, control on physical development, and lesser occasions to find items. Inside the RFID there is a substrate that transmits information, an IC chip that stores information, and a reception apparatus that conveys information remotely. This capacity permits the information to be sent or gotten continuously by communicating with the systems. As opposed to a scanner tag, RFID has an IC chip that permits more cutting-edge, precise information to move through the systems; in this way RFID empowers Wal-Mart to decrease costs in inventory and increase the benefit by keeping inventory levels leveled out (www.walmart.com).

ANSWER (3):

Most Wal-Mart stores across the country won't see this re-direction of the market system. There is an effort, in any case, to change the presence of numerous Wal-Mart stores. "The dim and-blue enormous box stores are to a great extent a relic of past times" expressed Eric Zorn, official VP of Wal-Mart Realty, in an ongoing media conference. Nearby authorities are progressively going to zoning laws and configuration audit sheets trying to shield enormous box retailers from modifying their networks. As an outcome, Wal-Mart (and different mass retailers) has been forced to be more imaginative than the conventional cookie-cutter boxes. Adjusting the plan of a standard box costs more, yet big-box retailers are frequently ready to make concessions to assist the endorsement procedure in specific markets. As per Sandy Skrovan, VP of Columbus, Ohio-based Retail Forward: "These people group are saying: 'In the event that you need to situate here, alright, yet you're most certainly not going to simply set up your block working with your huge blue sign on it—you need to make some plan concessions.'"

Skrovan proceeds: "Wal-Mart has been working all the more right in advance when they recognize an area with the zoning agents and nearby planners to build up a structure that will mollify the city authorities just as mix in additional with the earth. It costs more for them to head outside their present structure and do some overhauls, yet in the event that it's the site they truly need to be in and enter, they're willing to take those steps."

In certain networks, Wal-Mart will acquire it's "menu" of the building rises which currently incorporates four new structure models: Main Street, Cape Cod, Adirondack, Urban Mechanical, and Mediterranean (a case of which can be found in West Des Moines, Iowa).

In different cases, Wal-Mart may need to work with neighborhood local gatherings to guarantee that new stores speak to the singular networks as the accompanying models will point out:

• In Fort Worth, Texas, Wal-Mart teamed up with neighborhood local gatherings, structuring a store that "mirrors the character of the neighborhood noteworthy high school.
• In-country Georgia, a store was intended to take on "the equestrian topic of the neighborhood farmland, complete with horse shelters like entryways, vaults, and climate vanes.
• A rural store outside of Boulder, Colorado was intended to fit in with the interesting post-present day structure components discovered close by.

The weight for Wal-Mart to change increments as the measure of accessible land keeps on contracting. In the look for urban areas, Wal-Mart is starting to think about destinations close to downtown areas. These urban destinations, combined with Wal-Mart's efforts to customize store structure also, merchandise determination, will represent extra difficulties to network-based retailers

ANSWER (4):

How Retail-link system helped the suppliers of Wal-Mart:

Retail Link had an unassuming beginning with simply aiding stock. In 2013, that changed into the Retail Link Walmart Suppliers use today. All retailers approach data that was once saved for just enormous organizations. That implies a private company can get to the equivalent point by point SKU information as a bigger brand. Brands would now be able to have the right measure of stock close by. Not any more over purchasing. Keeping stock expenses down sets aside the cash. That spared income can be utilized towards R&D, promoting, or new innovation. Retail Link suppliers would now be able to develop their organizations in manners they would have not thought conceivable.

Brands couldn't imagine anything better than to have a genie mention to them what is probably going to occur in their business. Retail Link is, it could be said, a retailer's genie. When Walmart uncovered it more than 20 years prior, the aim was to help simply with stock and inventory network the board. With its most recent adaptation, anyway, a great deal more is currently conceivable. The new form has data about climate designs and foreseeing multi-week deals. That redesigned innovation probably won't sound like a lot however it can affect a little or huge business colossally. In the event that an organization can anticipate climate designs, it guarantees that specific items are accessible when they are required. It likewise assists with client assistance. On the off chance that a solid tornado season is anticipated for the Midwest, brands should have interchange shipping alternatives set up. This data permits brands to be proactive rather than receptive. Retail Link's expectations don't end with climate designs. It furnishes deals estimating that can help with stock administration. Those business expectations can likewise show zones where another or complimentary item may potentially be added to a variety. With that data, brands can indeed be proactive, this time with their collections. Information went along during top-selling times can mention to a brand what items were successes, and which they might not have any desire to spend stock dollars on. Retail Link has a great deal of weight with regards to helping venders with stock and grouping plans.

Order processing without EDI RECEIPT/TAX INVOICE Buyer sends to the supplier Buyer generates the purchase order Supplier receives order Supplier enters the invoice into their system to Invoice is created Invoice is sent to the buyer Buyer enters invoice into their system Order processing with EDI Purchase Order Invoice pacific (.....) commerce Buyers internal system/ERP Suppliers internal system/ERP