Wal-Mart’s Technological Life Cycle
WalMart adopts state-of-the-art technology for transaction processing, which ensures the privacy of suppliers and its supply chain management system enables the suppliers to offer low – priced products for sale to one of the biggest retail stores of the nation. Though, WalMart lags behind in terms of an online system but is developing software itself based upon the requirements of the customers. WalMart is following the Kaizen approach of continuous improvement in all fields of the business. (Robbins, 2004) Introduction
Wal-Mart is the biggest company in the world with almost $250 billion in annual sales and more than 1. 2 million employees. WalMart has an advantage over its competitors because the suppliers are willing to offer better prices to Wal-Mart because sharing the supply chain management reduces their costs as well. This has enabled WalMart to focus on developing and implementing latest technology in order to make transaction processing and analysis faster. Analysis Background Initially it was very hard to analyze low cost products and best purchase for customer because of a lag in technology.
However, in mid 1960s computers were brought in use to handle accounting functions still it was a tedious task as tools were not available at that time.
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In order to reduce its costs Wal-Mart deployed the concept of supply chain management, this concept enabled the suppliers to offer low prices to Wal-Mart. (Chaffey & Wood, 2005) Initially this system was depending on bar code readers but in 2005 Wal-Mart introduced radio frequency identification chips (RFID) tags which were costly as compared to bar codes but provided numerous advantages over bar codes: can be read from a distance and does not require line of sight, multiple tags can be read at the same time, are less susceptible to damages and they contain more data about the product which can be utilized for analysis purposes.
(The Move to RFID-based systems, 2008) However, no standardized system exists for RFID tags which added on extra waiting costs on suppliers end as they had to wait for approval of RFID standards. Furthermore, it raised concern over privacy issues if RFID tags were placed in individual products and since these tags can be identified through radio frequency then people wearing clothes with RFID tags on them will be identified easily.
(Tracking Supply Chains with RFIDs, 2008) Some experts feared about RFID tags that if enough suppliers and distributors don’t deploy this technology then the entire experiment will be useless as it will not be able to generate results. Furthermore, deploying RFID tag system was a costly job and it added on the cost burden to the suppliers and the distributors.