INTRODUCTION

Wal-Mart is one of the largest Fortune 500 companies, which is spread across the globe. It is an
arguably the largest retail chain which deals with everything from food to consumer electronics. In
terms of the revenue generated, it leads the fortune 500 companies like GE and Microsoft. Simply
put, it has everything a homemaker can ever think of. Affordable price range coupled with
aggressive online and market strategy has lead to wide acceptance for Wal-Mart in towns and cities
alike. Wal-Mart is probably the only largest fortune 500 corporations in the world, which directly
services the common man.
Walmart helps people around the world save money and live better -- anytime and anywhere
-- in retail stores, online and through their mobile devices. Each week, more than 245 million
customers and members visit our nearly 11,000 stores under 71 banners in 27 countries and
e-commerce websites in 10 countries. With fiscal year 2014 sales of approximately $473
billion, Walmart employs 2.2 million associates worldwide.












Wal-Mart business strategies
Wal-Mart applied several elegant tactics with what appears to be precision execution. Firstly,
they reduced their inventory which contributed to the goal of reducing costs by 6%. Secondly,
they recognized that their customers are facing deep income cuts of their own and identified
which product discounts would be perceived as most helpful. They leveraged their world-class
inventory data to identify specific products and discounted prices considerably. The result was an
influx of new customers who compensated for lower sales per customer thereby producing profits
that exceeded everyones expectations.
In the spirit of keeping it simple, the following lessons can be brought home to your organization:
1. Visualize, illustrate and understand your supply-chain
2. Negotiate discounts with your suppliers
3. Reduce your inventory and reduce inventory costs
4. Ask your customers what they believe will add value to their lives and modify your offering to
reflect that demandnow
5. Let your prospects and customers know that you have satisfied their demands promote yourself
effectively
6. Establish clear and specific performance expectations including those for positive financial results
7. Measure and report results openly (even the bad news)
It doesnt matter how big or small you are and it is frankly irrelevant which industry you hail
fromyou can apply all of these lessons and tactics.
Major business initiative used in Wal-Mart and what software is used For wal-Mart
major business initiative being used is supply chain management. A supply chain management
system is an IT system that supports activities by automating the tracking of inventory and
information among business processes and across companies. Wal-Mart is to ensure that all their
suppliers are using Electronic product Codes and for those who do not have the capabilities they
work with them to find packages that are within their price range. This allows for a successful
ensuring that customers get what they order in a timely manner. It allows for logistics,
fulfillment, production,revenue and profit, cost and price efficiency.
They rely on IT enabled tight supply chain management system to squeeze every penny possible
out of the procurement, distribution,and warehousing of its products. They use business
intelligence systems to predict what customers will want and when they will want it. Wal-Mart is
currently using ERP,which incorporates, Customer Relationship Management system; they are


also in the process of implementing SAP to strengthen their business skill. Philosophical
Approach could be the Matrix, where there is collaboration across the board to ensure customers
needs are satisfied. They are in-out flows, which is from computers to suppliers.

Value chain analysis
Value chain analysis (VCA) is a process where a firm identifies its primary and support activities
that add value to its final product and then analyze these activities to reduce costs or increase
differentiation.
Wal-Mart Value Chain



Primary Activities
Inbound and Outbound Logistic Management
This involves fast & responsive transportation system. More than 7000 company owned
trucks services the distribution centers. These dedicated truck fleets enables shipping of
goods from distribution centers to the stores within 2 days and replenish the store shelves


twice a week. The drivers hired are all very experienced & their activities are tracked
regularly through Private Fleet Driver handbook. This allows the drivers to be aware of the
terms & conditions for safe exchange of Wal-Mart property, along with the general code of
conduct.
For more efficiency, Wal-Mart uses a logistics technique called Cross Docking. In this
system, finished goods are directly picked up from the manufacturing site of supplier, sorted
out and directly supplied to the customers. This system reduces handling & storage of
finished goods, virtually eliminating role of distribution centers & stores. Because of cross-
docking the system shifted from supply chain to demand chain which meant, instead of
retailers pushing the products into the system, the customers could pull the products, when
& where they required.

operations
Wal-Mart operations are comprised of three business segments:
1. Wal-Mart Stores
2. SAMS CLUB
3. Wal-Mart International
Wal-Mart Stores segment is the largest segment, which accounted for approximately 67.3% of their
2005 fiscal sales. This segment consists of three different retail formats, all of which are located in the
United States. This includes the following sections:
Super-centers, which average approximately 187,000 square feet in size and offer a wide variety of
products and a full-line supermarket;
Discount Stores, which average approximately 100,000 square feet in size and offer a wide variety
of products and a limited stock of food products; and
Neighborhood Markets, which average approximately 43,000 square feet in size and offer a full-line
supermarket and a limited variety of general merchandise.
SAMS CLUB segment consists of membership warehouse clubs in the United States which
accounted for approximately 13.0% of 2005 fiscal sales. SAMS CLUBs in the United States average
approximately 128,000 square feet in size.
Wal-Mart International operations are located in Argentina, Canada, Germany, South Korea, Puerto
Rico and the United Kingdom, the operations of joint ventures in China and operations of majority-
owned subsidiaries in Brazil and Mexico. This segment generated approximately 19.7% of 2005 fiscal
sales. Here, it operates several different formats of retail stores and restaurants, including Super-
centers, Discount Stores and SAMS CLUBs.
Marketing and sales
Sam Walton started his retail career in 1940, as a management trainee with the J.C. Penney Company. Later, He
modeled the Wal-Mart chain on The Penney Idea (strength in calling employee associates rather than
clerks).
Sam walton became convinced in the late 1950s that discounting would transform retailing. He offer name
brand Merchandise at low price.
Wal-Mart prided itself on its everyday low price, prodide the customer with a clean, pleasant, and friendly
shopping experience.
2.2.1.2 Support Activities
2.2.1.2.1 Procurement
Wal-Marts process of procurement involves reducing its purchasing costs as far as possible so that it can offer
best price to its customers. The company procures goods directly from the manufacturers, bypassing all
intermediaries.
Wal-Mart has distribution centers in different geographical places in US. Wal-Marts own warehouses supplies
about 80% of the inventory. Each distribution centre is divided in different groups depending on the quantity of
goods received. The inventory turnover rate is very high, about once every week for most of the items. The
goods to be used internally in US arrive in pallets & imported goods arrive in re-usable boxes.
The distribution centers ensured steady flow & consistent flow of products. Managing the center is economical
with the large-scale use of sophisticated technology such as Bar code, hand held computer systems (Magic
Wand) and now, RFID. Every employee has access to the required information regarding the inventory levels


of all the products in the center. They make 2 scans- one for identifying the pallet, and other to identify the
location from where the stock had to be picked up. Bar codes & RFID are used to label different products,
shelves & bins in the center. The hand held computers guide employee to the location of the specific product.
The quantity of the product required from the center is entered in the hand held computer, which updates the
information on the main central server. The computers also enabled the packaging department to get accurate
information such as storage, packaging & shipping, thus saving time in unnecessary paperwork. It also enables
supervisors to monitor their employees closely in order to guide them & give directions.
This enables Wal-Mart to satisfy customer needs quickly & improve level of efficiency of distribution center
management operations.
2.2.1.2.2 Wal-Mart Technologies
Technology is inevitable in every sphere of life today; it has always made things easier. Wal-Mart works on the
same strategy. 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.
But due to the limitations of barcodes, a new emerging technology called RFID has been identified to meet the
demands. RFID is low cost Radio Frequency Identification system which requires minimum human intervention
to carry out tasks ranging from billing to materials tracking and supply chain management. It is a small wireless
device which can store good amount of data and can virtually be tagged to anything.
RFID is an electronic tagging technology that allows an object, place, or person to be automatically identified at
a distance without a direct line-of-sight, using an electromagnetic challenge/response exchange.
2.2.1.2.3 Wal-Mart Human Resource Management
In related to the Human resource development, Turner, Chief Executive Officer of Wal-Mart's subsidiary
corporation, explained in his interview that in any development effort, our [IS] people are expected to get out
and do the function before they do the system specification, design or change analysis. The key there is to do
the function, not just observe it. So we actually insert them into the business roles. As a result, they come back
with a lot more empathy and a whole lot better understanding and vision of where we need to go and how we
need to proceed.
Weve learned some hard lessons in our stores, clubs and distribution centers when we developed something
and people didnt use it, and they chose to find other ways to get the job done. We are working hard to
develop systems that are easy to use. That puts an awesome responsibility on that developer to get out and
understand the business. Thats one of our key things: Were merchant first, technologists second.
We have a very clear set of critical success factors that every associate in our division has to live by, and they
are generally conditions of employment. Some of them are complicated and some of them are very simple:
excellent customer service, testing and validation before you roll it out, balance and controls, payback and ROI.
All new [IS] associates are indoctrinated into that set of disciplines, and all associates review it at least on an
annual basis. The disciplines are the same for everybody regardless of what team youre on.
2.2.1.2.4 Wal-Mart Infrastructure
Considering the rapid expansion of Wal-Mart stores, it was essential to have a very good communication
system. For this, Wal-Mart set up its own satellite communication system in 1983. This allowed the
management to monitor each and every activity going on in a particular store at any point of the day and
analyze the course of action taken depending on how the things went.
Wal-Mart ensures that unproductive inventory is as less as possible, by allowing the stores to manage their
own stocks, thereby reducing pack sizes across many categories and timely price markdowns. Wal-Mart makes
full use of its IT infrastructure to make more inventories available in case of items that customers wanted
most, while reducing overall inventory. By making use of Bar-coding & RFID technologies, different processes
like efficient picking, receiving & proper inventory control of the products along with easy packing and
counting of the inventories was ensured.


Wal-Mart owns the Massively Parallel Processor (MPP), largest & the most sophisticated computer system in
private sector, which enables it to easily track movement of goods & stock levels across all distribution centers
and stores. For emergency backup, it has an extensive contingency plan in place as well.
Employees use Magic Wand, which is linked to in-store terminals through a Radio frequency network, to
keep track of the inventory in stores, deliveries and backup merchandise in stock at the distribution centers.
The order management and store replenishment of goods is entirely executed with the help of computers
through Point of Sale (POS) system. Wal-Mart also makes use of sophisticated algorithm to forecast the
quantities of each item to be delivered, based on inventories in the store. A Centralized inventory database
allows the personnel at the store to find out the level of inventories and location of each product at a given
time. It also shows the location of the product like distribution center or transit on the truck. When the goods
are unloaded at the store, the inventory system is immediately updated.
In November 19, 2001, Wal-Mart spends an estimated $40 million to upgrade its e-business infrastructure.
Dan Phillips, vice president of technology support and operations, said the new systems from IBM will give
Wal-Mart "a faster processing time, greater availability of our systems and better systems operation without
interruption." He added that the new systems have yielded a "significant improvement in our processing time,
in some cases allowing us to cut our processing time for some jobs by more than half." Wal-Mart is replacing
its old IBM mainframes with a dozen new IBM eServer z900 mainframes and its older storage systems with
IBM's new Enterprise Storage Servers code-named Shark.
The mainframes and the storage servers provide the backbone of Wal-Mart's data center infrastructure.
Among other things, the data center is used for data processing, reconciliation, debit and credit transactions,
as well as product replenishment.




















Walmart IT implementatons
RFID System in Wal-Mart Value Chain
Figure-1 RFID System and How It Works


Fig: The Way Wal-Mart uses RFIDTechnology in Managing Its Inventory









Wal-Mart also networked its suppliers through computers. It entered into collaboration with
P&G for maintaining the inventory in its stores and built an automated re-ordering system,
which linked all computers between P&G factory through a satellite communication system.
P&G then delivered the item either to Wal-Mart distribution centre or directly to the
concerned stores.
Radio-frequency identification, or RFID, which transfers data stored on tags on a product or other object,
facilitating identification and tracking. One use of RFID technology familiar to many people is in vehicle
transponders for toll collections.
Walmart has been using RFID technology for about a decade and cites numerous benefits, including more
efficient inventory management. The company initially introduced RFID to track pallets of merchandise
traveling along its supply chain, including at warehouses. In 2007, executives credited the technology with,
among other things, cutting the volume of excess inventory in Walmarts massive supply chain and slashing
out-of-stock occurrences by almost one-third. In 2010, the retailer announced the next phase of its RFID
strategy::placing tags on individual garments.
RFID tags offer a broader array of advantages compared with traditional barcodes. They store more data,
provide real-time information, and can be scanned from a distance and without a clear line of sight.
According to researchers at the University of Arkansas, there was a 16% reduction in out-of-
stocks since Wal-Mart introduced RFID technology into its supply chain. The researchers
also pointed out that the products using an electronic product code were replenished three
times as fast as items that only used bar code technology.


Why RFID over Bar-Code?
The ability to read without line-of-sight is the best advantage of RFID over bar-code systems. RFID readers can
sense items even when the tagged items are hidden behind other tagged items. This enables automation. The
challenging part of implementing RFID is that tagged items should not be missed by the reader due to
interference, multipath fading, transient effects etc. Missed reads are an unfortunate reality with RFID
systems. RFID uses a serialized numbering scheme such as EPC (Electronic Product Code). Each tag has a
unique serial number. Serial number information is extremely powerful in understanding and controlling the
supply chain and provides much more detailed behavior of the supply chain than can non-serialized bar codes
such as UPC (Universal Product Codes) and EAN (European Article Numbering). Serial numbers have many
advantages such as food freshness/expiration. This can tell how for how long an item has been in the supply
chain where as such information is not captured in bar code system. Hence items can be reached the right
place at the right time. Furthermore RFID implementation monitors theft too. For example if number of items
reached at the retailers outlet is less than that was departed from suppliers location, it can be easily tracked
for. In all these ways, RFID systems have stronger sensor networking system or monitoring system than bar
code systems.
RFID Reduces Bullwhip Effect
Bullwhip effect occurs as orders are placed from retailers, to wholesalers, to manufacturers, with
fluctuations increasing at each step in the sequence. The bullwhip fluctuations in the supply chain
increase the costs associated with inventory, transportation, shipping, and receiving while decreasing
customer service and profitability. Bullwhip effect is the increasing in orders that often occurs as
orders move through the supply chain.
Wal-Mart succeeded in adopting RFID to boost its supply chain has caused reducing the bullwhip
effect and improving opportunities in the supply chain.

CRM Walmart has been catering to its customers for some time now and has proven itself to
be one of the greatest businesses. Walmart at 6000 Ogeechee Rd, Savannah, Ga 31419 is
known for its customer service and amenities that allow for its customers to continue
receiving Customer Relationship Management and satisfaction.The first step in Customer
Relationship Management (CRM) is relationship-building opportunities into the firms
routine operations, the framework to develop sustainable competitive advantages in the
marketplace is reinforced . CRM is not a tactic or gimmick; it is a long-term strategy for
sustainable market leadership stemming from carefully cultivated and strong relationships
with customers .
Critical elements of CRM strategy force the firm to identify, segment, and profile
customers based on characteristics such as profitability, lifetime revenue potential,


cost to service, interests, buying habits, and service requirements. These activities
encourage a laser-type focus on retaining the most valuable and profitable customers .
According to Microsoft CRM 4.O Overview, Microsoft Dynamics CRM 4.0 is a fully
integrated customer relationship management (CRM) system. Microsoft Dynamics CRM
gives you the capability to easily create and maintain a clear view of customers from first
contact through purchase and post-sales. With tools to enhance your company's sales,
marketing, and customer service processesalong with native Microsoft Office Outlook
integrationMicrosoft Dynamics CRM delivers a fast, flexible, and affordable solution

In closing, customer information is essential for the use of Microsoft Dynamics CRM
4.0 for customer relationship management tracking for both Wal-Mart and the customer and
can become a tool used as a strategic opportunity and advantage with a competitive edge
outcome for Wal-Marts stakeholders to analyze and make a decision as to whether or not
repairing the self check-outs, allowing for negative publicity is good in the area of project
feasibility.

Wal-Mart Used Technology to Become Supply Chain Leader

It is hard to talk about supply chain management without mentioning Wal-Mart.
In its relentless pursuit of low consumer prices, Wal-Mart embraced technology to
become an innovator in the way stores track inventory and restock their shelves, cutting
costs and passing the savings along to customers. In the process the company became
synonymous with the concept of successful supply chain management.
I dont believe there is a university in the world that doesnt talk about Wal-Mart and
the supply chain, said James Crowell, director of the Supply Chain Management
Research Center at the Walton College of Business. They are just so well respected


because they do it so well, and certainly I know a lot of peer institutions around our
country will bring a Wal-Mart guest to speak.
From ancient times through two world wars to todays global market, the logistics of
supply chain management have challenged any enterprise that tries to move goods and
materials a long way in a timely manner. A break in the supply chain leading to a dearth
of food or ammunition could spell disaster for an army on the move. For consumers and
businesses, a supply chain breakdown means empty shelves and a loss of revenue.
Through a combination of distribution practices, truck fleet management and
technological innovations, Wal-Mart not only became the model of supply chain
efficiency and used it to become the largest retailer and private sector employer in the
world.
Even the U.S. military noticed. Army Col. Vernon L. Beatty, who commanded the
Defense Distribution Depot in Kuwait, spent a year with Wal-Mart as part of the
militarys Training With Industry program.
Supply chain management is moving the right items to the right customer at the right
time by the most efficient means, Beatty said in article about his experience. No one
does that better than Wal-Mart.
Fewer Links
Wal-Marts supply chain innovation began with the company removing a few of the
chains links.
In the 1980s Wal-Mart began working directly with manufacturers to cut costs and more
efficiently manage the supply chain. From 1993 to 2001, Wal-Mart grew from doing $1
billion in business a week to $1 billion every 36 hours, growth that was attributed as
much to supply chain management as to customer service.
Last year, Wal-Mart sold $1.22 billion worth of merchandise every day.
Under a Wal-Marts supply chain initiative called VMI vendor managed inventory
manufacturers became responsible for managing their products in Wal-Marts
warehouses. As a result, Wal-Mart could expect close to 100 percent order fulfillment on
merchandise.
Wal-Mart streamlined supply chain management by constructing communication and
relationship networks with suppliers to improve material flow with lower inventories.
The network of global suppliers, warehouses and retail stores has been described as
behaving almost like a single firm.


Wal-Marts whole thing was collaboration, Crowell said. Thats a big part of what
made them so successful.
Even in its early years, Wal-Marts supply chain management contributed to its success.
Founder Sam Walton, who owned several Ben Franklin franchise stores before opening
the first Wal-Mart in Rogers in 1962, selectively purchased bulk merchandise and
transported it directly to his stores.
In 1989 Wal-Mart was named Retailer of the Decade, with distribution costs estimated at
a mere 1.7 percent of its cost of sales far superior to competitors like Kmart (3.5
percent) and Sears (5 percent).
The companys supply chain has only become more effective since then.
Wal-Mart developed the concept of cross docking, or direct transfers from inbound or
outbound truck trailers without extra storage. The companys truck fleet and corps of
non-unionized drivers continuously deliver goods to distribution centers (located an
average 130 miles from the store), where they are stored, repackaged and distributed
without sitting in inventory.
Goods will cross from one loading dock to another, usually in 24 hours or less, and
company trucks that would otherwise return empty back haul unsold merchandise.
Collaboration
Companies within the supply chain synchronize their demand projections under a
collaborative planning, forecasting and replenishment scheme, and every link in the
chain is connected through technology that includes a central database, store-level point-
of-sale systems and a satellite network.
Wal-Mart implemented the first companywide use of Universal Product Code bar codes,
in which store level information was immediately collected and analyzed, and the
company devised Retail Link, a mammoth Bentonville database. Through a global
satellite system, Retail Link is connected to analysts who forecast supplier demands to
the supplier network, which displays real-time sales data from cash registers and to Wal-
Marts distribution centers.
The big piece of supply chain management is Wal-Mart has the retail link, Crowell
said, the information from point-of-sale data, the cash register, that they put into their
system and share with all their partners.
What makes that so innovative is at one time a lot of companies werent sharing that. In
fact, they were using third parties where they had to pay for that information.


Wal-Marts approach meant frequent, informal cooperation among stores, distribution
centers and suppliers and less centralized control. Furthermore, the companys supply
chain, by tracking customer purchases and demand, allows consumers to effectively pull
merchandise to stores rather than having the company push goods onto shelves.
In recent years Wal-Mart has used radio frequency identification tags (RFID), which use
numerical codes that can be scanned from a distance to track pallets of merchandise
moving along the supply chain. Even more recently the company has begun using smart
tags, read by a handheld scanner, that allow employees to quickly learn which items need
to be replaced so that shelves are consistently stocked and inventory is closely watched.
RFID and smart tags are just the next generation in supply chain innovation that dates
back to the 1960s, when Sam Walton personally attended an IBM school in upstate New
York with the intention of landing experts to computerize operations.
Wal-Mart reaps the benefits of its supply chain management in time saved, faster
inventory turnover, increased warehouse space and accurate forecasting of inventory
levels.
They really understand that if Im going to build some stores and build some
distribution centers, how am I going to service them? Crowell said. If you look at some
of their competitors, sometimes they would put a store in and then think, How am I
going to service it?
Benefits of Efficient Supply Chain Management
Wal-Marts supply chain management strategy has provided the company with several sustainable competitive
advantages, including lower product costs, reduced inventory carrying costs, improved in-store variety and
selection, and highly competitive pricing for the consumer. This strategy has helped Walmart become a dominant
force in a competitive global market. As technology evolves, Walmart continues to focus on innovative processes
and systems to improve its supply chain and achieve greater efficiency.