Integration with Manufactures
Wal-Mart came across the problem of integration with manufacturers, every manufacturer has their own way of recording data; for instance a manufacturer may give a different ID to a product and describe it differently from Wal-Mart. This difference raised the issue for reordering purposes as product ID only did not made the work easy as the description and the nature of the product has to be matched perfectly. The solution to this problem only lies if all suppliers, manufacturers and distributors use one standardized system to avoid compatibility issue and to make integration work easy.
(Tracking Supply Chains with RFIDs, 2008) Uniform Code Council (UCC) introduced a not-for-profit subsidiary known as UCC net registry, it charged manufacturers and retailers an annual fee to use the system, which was available online. It standardized products as each item had a list which contained 62 pieces of product data. This resolved the compatibility issue and errors were reduced as everyone was using same data as per manufacturer’s standards.
(Curtis & Cobham, 2005) With the availability of clean data, Wal-Mart started relying on electronic data interchange (EDI) which reduced cost and time of employees by having to enter the data manually after rectification into the database. In 2003, Wal-Mart started encouraging its suppliers to use internet – based EDI system; which can be accessed through Web Browser or through client tools that connect to their Enterprise Resource Planning systems.
Privacy in internet – based EDI system was censured by using certificate based encryption. (The Move to RFID-based systems, 2008) Competition With the help of supply chain management and availability of data to analyze and forecast sales Wal-Mart has a competitive edge over its competitors. Supply chain management helped Wal-Mart to develop and maintain relationships with suppliers as well as gave them a chance to offer low – priced products to one of the leading stores of the nation.
(Tracking Supply Chains with RFIDs, 2008) Privacy Since Wal-Mart is able to generate tremendous amount of data about its suppliers and the products which is used for analysis purposes and to forecast sales; this data is very useful to competitors. In order to protect the privacy of Wal-Mart’s data, it decided to stop selling its data to research companies, because these data had more exposure to the competitors other than the research purposes.
This might affect the company in future as it may not be able to get research from the experts – research companies, who are the experts in their fields and will have to depend on in-house research only. (Innovative uses of RFIDs, 2008) Financial Transactions Once Wal-Mart incurred a problem with its system and customers paying through credit cards were charged double or triple the amount; as soon as Wal-Mart learned about this problem its directed its customers to double check their transaction statements and not rely solely on the fast moving technology.
Online System WalMart was not able to develop an efficient web site as it was ranked 19th out of 20 web sites and on average took 54 seconds to complete a transaction. In 2003, it started selling limited selection of songs at a lower price than Apple; role of Wal-Mart’s web site is more of a music selling store than a store to carry out transactions. (Bulik, June 2008) IT Development WalMart itself develops the software for use it emphasizes that in – house developers adopt a customer based approach and develop the software as per the requirement by the customer.
The work of IT staff is not just limited till development but they have to test it extensively, enabling the customers to use the software. Conclusion WalMart, no doubt has an edge over its competitors due to its stringent supply chain management. However, compromising on research can prove to be costly as research is required in all stages of the product life cycle. (Curtis & Cobham, 2005) If WalMart is relying on in-house research facility, then it should be state-of-art research facility.
Furthermore, WalMart should pay more attention on its online systems, deploying latest technology and not having an efficient web site can be a back off on image of WalMart.
1. Bulik, B. S. (June 2008). Apple’s iPhone steals marketing thunder from iPod. Advertising Age , 4-55. 2. Chaffey, D., & Wood, S. (2005). Business Information Management, Improving Performance Using Information Systems. London: Financial Times/Prentice Hall. 3. Curtis, G. , & Cobham, C. (2005). Business Information Systems. 5th ed. London: Financial Times/Prentice Hall.