Walmart And Its Technology
Wal-Mart is big. To understand just how big, consider that on Nov. 23, 2001, the 40-year-old retailer sold more than $1. 25 billion worth of goods in a single day. The company has 4,457 stores, 30,000 suppliers, annual sales of more than $217 billion and one information system. According to CIO Kevin Turner, running centralized IS with homegrown; common-source code gives Wal-Mart a competitive advantage and helps the company maintain one of the lowest expense structures in retail. ISD is the Information Systems Division. Wal-Mart depends on Technology to increase efficiency and to provide more information.
From registers to RFID, Wal-Mart leads the retail industry by implementing ISD around the world. They run a centralized information system for operations all over the world, and that is run from Arkansas. Their main IT strategy is to have common systems and common platforms. Each Wal-Mart store is electronically connected via a secure private network to Wal-Mart headquarters in Bentonville, Ark. Whether a store is in Bentonville, Ark. , or in Miami, Fla. , or in Leeds, England, the processes and the systems are generally the same.
This helps them save significant downtime or startup time in transitions. When people are transferred from one store to the other, and they can pick up right where they left off. Though there is a common system and a common platform, it allows a great deal of flexibility so that the people in those local markets can do their job in the best, most effective way. Wal-Mart keeps itself abreast with the latest technologies. They are planning to have ubiquitous storage within the next three years that will truly drive anywhere-anytime-anything computing.
They are in the process of building an infrastructure based on wireless technology that will enable customers to walk into one store or a Sam’s Club and use their own device on Wal-Mart’s network to accomplish whatever they want. Radio frequency identification is an exciting field, and Wal-Mart is working with MIT on the development of “cheap chips. ” This is expected to replace bar codes over time, and they will be able to intelligently drive the supply chain through what’s on the shelf and what’s in the back without the associates having to verify it.
They are also working on Voice over IP that will enable its associates to keep in touch in spite of transfers. “Wal-Mart’s aggressive adoption of information technology to improve logistics and back-office efficiency has also been a major driver of productivity,” BusinessWeek reported in its online edition on Nov. 27. Technology is the catalyst that enabled Wal-Mart to wring efficiencies out of processes that are unmatched by leading companies in other industries. Take, for instance, the replenishment problem.
At any given moment, a typical Wal-Mart Discount Store has more than 70,000 standard items in stock. Every one of them has to be identified, ordered, inventoried, and replenished. A typical Supercenter is even tougher to stock since it carries more than 20,000 additional grocery items, many perishable. These have to be reordered frequently, sometimes even daily. How does technology enable this? Since 1996, Wal-Mart has been using handheld computers linked to in-store servers by a radio-frequency network. It’s a high-tech conduit to an internal inventory system.
These handhelds help keep track of real-time information for the inventory on hand, deliveries, and back-up merchandise in stock at distribution centers. Mobile computing has enabled Wal-Mart to have higher quality sales and inventory information. As a result, suggested ordering quantities on many items are available to associates in real time to assist them in the task of keeping stores replenished and items in stock. Thus, by using technology to simplify processes, eliminate waste, and analyze and react to more meaningful information, Wal-Mart has become one of the world’s leading retailers.