Wal-Mart Inventory Management System

1. Conduct research on Wal-Mart Inventory Management System

Wal-Mart serves customers and members more than 200 million times per week at more than 9005 retail units under 60 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Wal-Mart employs 2.1 million associates worldwide. (Walmartstores.com, n.d.)

A leader in sustainability, corporate philanthropy and employment opportunity, Walmart ranked first among retailers in Fortune Magazine’s 2010 Most Admired Companies survey. (Walmartstores.com, n.d.)

Inventory management is the active control program which allows the management of sales, purchases and payments. (IM, 2003-2011)

Inventory management software helps create invoices, purchase orders, receiving lists, and payment receipts and can print bar code labels. An inventory management software system configured to your warehouse, retail or product line will help to create revenue for your company. The Inventory Management will control operating costs and provide better understanding. We are your source for inventory management information, inventory management software and tools. (IM, 2003-2011)

Wal-Mart was able to reduce unproductive inventory by allowing stores to manage their own stocks, reducing pack sizes across many product categories, and timely price markdowns. (Chandran P.M, 2003)

Instead of cutting inventory across the board, Wal-Mart made full use of its IT capabilities to make more inventories available in the case of items that customers wanted most, while reducing the overall inventory management.(Chandran P.M, 2003)

Wal-Mart also networked its suppliers through computers. The Company 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. (Chandran P.M, 2003)

Benefits from that are Wal-Mart could monitor its stock levels in the stores constantly and also identify the items that were moving fast. P&G could also lower its costs and pass on some of the savings to Wal-Mart due to better coordination. (Chandran P.M, 2003)

Employees at the stores had the “Magic Wand”, a hand-held computer which was linked to in-store terminals through a radio frequency network. Benefits from that these helped them to keep track of the inventory in stores, deliveries, and back up merchandise in stock at the distribution centres. (Chandran P.M, 2003)

The order management and store replenishment of goods were entirely executed with the help computers through Point-Of-Sales (POS) system. Through this system, it was possible to monitor and track the sales and merchandise stock levels on the store shelves. (Chandran P.M, 2003)

Wal-Mart also made use of the sophisticated algorithm system which enabled it to forecast the exact quantities of each item to be delivered, based on inventories in each store. It benefits by providing accurate data that even bulk items could be broken and supplied to the stores. (Chandran P.M, 2003)

Wal-Mart also used a centralized inventory data system using which the personnel at the stores could find out the level of inventories and the location of each product at any given time. It is also showed whether a product was being loaded in the distribution centre or was in transit on a truck. Once the goods were unloaded at the store, the store was furnished with full stocks of inventories on a particular item and the inventory data system was immediately updated. (Chandran P.M, 2003)

Wal-Mart also is using bar code technology and radio frequency technology to manage its inventories and enabled accurate distribution of goods.Using bar codes and fixed optical readers, the goods could be directed to the appropriate dock, from where they were loaded on to the trucks for shipment. (Chandran P.M, 2003)

Wal-Mart owned the largest and most sophisticated computer system in private sector. The company used Massively Parallel Processor (MPP) computer system to track the movement of goods and stock levels. (Chandran P.M, 2003)

Wal-Mart used Cross-Docking system. In a cross-docking system, pallets of material are received on one dock, broken down into customer specified loads while still on the dock and transferred to outbound trucks. Items are not placed in slots for storage.  (Osha.gov, n.d)

Benefits:

By making effective use of computers in all its company’s operations, Wal-Mart was successful in providing uninterrupted service to its customers, suppliers, stockholders and trading partners. (Chandran P.M, 2003)

2. Evaluate on how the system is benefiting Wal-Mart

•  Improve performance and value for customers

• Made efforts to capitalize on every cost saving opportunity

• The savings on cost were always passed on to the customers, thereby adding value at every stage and process

• Faster inventory turnover, accurate forecasting of inventory levels, increased warehouse space, reduction in safety stock and better working capital utilization.

•  Better customer services by increasing efficiency in operations

•  Reduce inventory storage costs by using cross-docking and cut down the labor and other handling costs involved in the loading and unloading of goods.

References

Walmartstores.com, n.d., Wal-Mart Corporate [online], Available from http://walmartstores.com/AboutUs/, [Accessed at 26^th April]

IM, 2003-2011, what is Inventory Management [online], Available from http://www.inventorymanagement.com/, [Accessed at 26^th April]

Chandran P.M, 2003, Wal-Mart Supply chain management practices [online], Available from http://mohanchandran.files.wordpress.com/2008/01/wal-mart.pdf, [Accessed at 26^th April]

Osha.gov, n.d., Cross-Docking System [online], Available from http://www.osha.gov/SLTC/etools/grocerywarehousing/crossdockingsystem.html, [Accessed at 26^th April]

Websites Review

The following links:
i) www.groupsmore.com

ii) www.jackcow.com

iii) www.milkadeal.com

iv) www.superdeals.my

Compare and contrast sites in terms of:

Similarity

Functionality

1)   Target audience

All websites are targeted to everybody means people any age, any culture and etc.

2)   What can be done with websites or the sites purpose

All websites are selling their product and services by online which means they are leading social ecommerce websites.

B2C, B2B and other business models used

3)   Provide same discounts

50%-90% discount

4)   Same features to login, sign in to subscribe

5)   Same criteria as voucher is given in each website like users can view the time, the discounts, and the value left for the product or services to purchase and view how many buyers bought the product.

6)   Same way to purchase – e payment. Click –and - mortar organizations that conduct ecommerce activities.

7)   Conduct partnerships with other businesses

8)   Input

Allow users to input as example sign in need input user name and password

9)   Output

Allow users to manipulate the websites effectively to get desirable result

User Interface/ Site Layout

1)   Creative Web graphics used

In terms of background image, colour, font of the content colour, buttons.

As example Flash design, HTML programming could be used – web programming languages

2)   Media or communication used to interact users

Brochures, animation, good quality of pictures, photography, hyperlinks well shown

Differences

Functionality

1)   Milkadeal.com and Groupsmore.com

Similar by providing same functions like registration

Example if the user opens the facebook account and by clicking on log in button it will automatically sign in the user as a member so no need to the user to register as a member or sign in again as example websites like Superdeals and JackCow.com

Milkadeal.com and Groupon.com use facebook account for registration because many users all over the world use face book and it is profitable for facebook as promoting their organization from this websites.

2)   Groupsmore.com provide blog – Groupon.blog but others are not providing

3)   Affiliate marketing/online advertising

Jackcow.com provides banner ad of other product like ipad to attract customers by providing discounts as well.

User Interface/Site Layout

1)   Different colours, background, background image, font sizes of content in each website by using flash

2)   Groupsmore.com and jackcow.com provides good use of colour (matching colours)

Rank the websites:

1.   Groupsmore.com

It provides user friendly interface as it is easy to use, to manipulate, to get desired information, search - all options in appropriate place Provide the criteria like user can view the timing, value of the any product so it is easy for the user to decide to check and option like see discounts expiring today.

Registration feature as with facebook example

2.   JackCow.com

Good user interface; information is given in clear way, understandable way

3.  Superdeals.my

Good user interface, too colouring the user can be confused by viewing the web pages 

4.   Milkadeal.com

All information is given one short and it became very long page to search an product user have to scroll down continuously, the links to open is very hard the user should to wait so long because of overload information and flash animations make very slow process of opening the web page.

Summary

Benefits of those websites:

1)   No barriers in terms of time or destination, users can purchase, view products and services by online anytime and anywhere.

2)   The direct cost-of-sale for an order taken from a web site is lower than through traditional means as discounts can be provided as 95%

3)   Operational benefits of e commerce include reducing both the time and personnel required to complete business processes, and reducing strain on other resources. So it is the cheapest means of doing business.

Why i prefer Groupsmore.com website

     I preferred website Groupsmore.com compare to others because the functionality of this site works quickly and correctly. More functions are available, usability is provided which means it is easy to read, navigate, and understand; information is sufficiently provided.

• Yes, ecommerce tool implemented because the websites consists of the buying and selling, transferring of products or services over electronic systems such as Internet or computer network. An effective ecommerce site begins by understanding and defining the business strategy, goals and metrics for the site, and then crafting a website that is tailored to meet those site objectives. Objective these four websites offers exclusive deals and discounts at the best places to eat, relax shop and travel and discover unbelievable deals at half the price.

• Lack of information on how to purchase how to order or how the transaction works.To improve is to put video or create another web page with instructions.

First Report on Individual Assignment

Task 2

Project planning and tasks scheduling

04/04/2011-30/04/2011 Search for the company name, Introduction of the organization, specify area/department for research, search for the IT/IS systems implemented in the organization. 

01/05/2011-16/05/2011 Research for the company current market and IT position and how IT can be used to underpin the business’s future strategy. 

16/05/2011-31/05/2011 Discuss about the importance of the risk, security and recovery of the system and add any assumptions made. 

01/06/2011-17/06/2011 Any extra additions and changes on my assignment + Final Documentation

• I am going to do research for the information from Internet, any journals, by observation.

First Report on Individual Assignment

Task 1

       I.   Ernst & Young (EY) is a global leader in assurance, tax, transaction and advisory services. Worldwide, 130,000 people are united by shared values and an unwavering commitment to quality. It makes a difference by helping our people, our clients and our wider communities achieve their potential.

Ernst & Young is the one of the largest company in the world and one of the Big Four auditors along with Deloitte, KPMG and PricewaterhouseCoopers (PwC).

I am going to focus on Ernst & Young Company, Kazakhstan, in Almaty city.

       II.  Ernst & Young  cover many industries like automotive, consumer products, financial services, government and private sector, life sciences and etc.

I am going to research about Oil and Gas industry and Audit department. So basically in Audit department employees perform audit activities and consulting services to the clients around the world.

       III.   IT is the common abbreviation for Information Technology, meaning the set of tools used to create, send, store, and otherwise manipulate information. While in a broad sense this could include such things as filing cabinets, post-it notes, calculators, microphones, etc. When we say IT, we generally mean electronic, computer-based technology.

          

            For our context at EY, this includes personal computers, servers, local networks, wide area networks, plus all the applications and other software, which makes use of this hardware. It also includes our office telephone systems and voicemail. In most of EY offices, this is especially true, as our telephones and computers are all part of the same network, relying on the same infrastructure (so-called IP telephony).

Ernst and Young in Kazakhstan, Almaty city have special program audit employees worked with, named Groove and GaMx.

Audit firms have developed their own auditing software, which was used for their audit engagements. Everything was properly linked up (e.g. associate risk to an account assertion) in the software application. In our opinion, the software helps to develop and strengthen the auditing concept if efforts have been spent on understand the audit concept.

For instance, Ernst & Young has developed its auditing & assurance tools, GAMx for its audit engagement.

All files related to the individual client are kept in workspace - GaMx program then after completing the audit procedures, they save final GaMx workspace's backup of client and sent to the archive room.

EY Transactions area assists clients in effective and timely execution of corporate deals. Through tools such as their Global Accounting & Auditing Information Tool (GAAIT), Global Audit Methodology, GAMx and public and proprietary knowledge, Ernst & Young provides assurance services to many organizations. They have established 'IFRS (International Financial Reporting Standards) desks" in each significant country and region, which strive for consistent interpretation through constant communication and consultation between the various desks, engagement teams and clients. Their Global Accounting & Auditing Information Tool (GAAIT) is a multinational GAAP research tool that provides access to global frameworks and the depth of United States standards and authoritative literature needed by many. Their Global Audit Methodology is a broad approach used by their engagement teams worldwide to execute audits. The methodology includes specific guidance on how and why procedures are performed, along with detailed policies regarding parameters in making certain audit decisions. GAMx is an audit support tool that integrates and presents methodology guidance, industry sector knowledge and reference materials in the context of the audit procedure being performed.

Groove® is Internet software for making direct connections with the people who are important to you. With Groove you can talk, chat, instant message, draw pictures, swap photos and files, play games and browse the Web together with friends, family and co-workers, at the same time or whenever one of you has a moment. In Groove, having conversations with context is as easy as sending an email or accessing the Web. Groove runs on Windows® PCs and uses the Internet for communication.

Microsoft Office tool such as MS Excel and MS Word also could be used in EY.

Digital Economy

Digital Economy or New economy is business transactions on the Internet (the marketplace that exists on the Internet). (Microsoft, 2009)

New economy refers to the economy that is emerging in the midst of the ongoing IT revolution. The IT revolution refers to the reduction in the cost of finding and communicating information. There are more convinient and more powerful computing equipment, especially personal computers (PCs), in combination with better and more affordable telecomunication services are jointly driving the IT revolution. Revoliton is the Internet which can connect ust to the rest of the world in the comfort of our homes and offices. The IT revolution is giving rise to a new economic paradigm – the New economy. (Digital Economy, 2005)

Beside the technology, the market and society also drive of changing the old economy to new.

The foundation of the New Economy is there cognition that economic competition and success are now determined on a global, not local,scale.

Comparison between Old Economy and New economy (Alabama Cooperative Extension System, 2000):

1. The old economy primarily focused toward local, state and national markets, the new economy has a global focus.
2. The old economy required manual labor; the new economy required science
   and technology with fewer non-skilled jobs available.
   Old economy was production based/ new is knowledge based
3. Old economy is competition but new economy is colaboration (people and organization interact, communicate, collaborate and search for the information)
4. Old economy is paper based work which result mass in the working environment  like safety, sharing as loss and etc. but new economy is computer based work that result safety improvements, sharing (will have back up of the files), safety etc.

For example,

Dell organization

Dell is using Internet to conduct the business so it is Visrtual Organziation (VO).

Dell uses a variety of suppliers and customers order using the Internet from a list of available options. Based on the match of the different components that are specified by the customer, the order is routed dynamically to one of the suppliers that are carefully chosen by Dell and all the interfaces are done through Dell system.

This makes Dell a VO because Dell does not carry any inventory but rather uses the suppliers who incur the cost of inventory but are in partnership with Dell, which guarantees a constant flow of orders for the suppliers. Dell is using mass customisation business model that allows customers customise the product and the suppliers will follow the build to order concept. (Free reserach paper, n.d.)

The diversity of suppliers in partnership with Dell enables the organization to be abreast of technological development and innovation, which can in turn better satisfy customer requirements. (Free reserach paper, n.d.)

Through Dell.com all business activities is done by online. Its direct online business model. Buying, selling of products, offer services as e-learning to their empolyeers.

Dell is using Affiliate business model which put banner ads, advertisments of different companies that done online as well in their website.

When Dell Inc. first began using the Internet to expand their business, the company had three basic objectives:

1. to make it easier to do business with Dell,
2. to reduce the cost of doing business with Dell, and
3. to enhance their customer relationships.

Dell uses Internet browsers to essentially give that same information to customers and suppliers – bringing them literally inside their business. This became the key to what I call a virtually integrated organization – an organization linked not by physical assets, but by information. By using the Internet to speed information from between companies, essentially eliminating inter-company boundaries, it would be possible to achieve precision and speed-to-market for products and services in ways not dreamed possible before. It would be the ultimate business system for a digital economy. (e-Coach, 2001)

Dell is click and mortar organization everything done by online.

The benefits of online business of Dell:

1) Global marketplace

Dell web site can be accessed from anywhere in the world, which now means you could sell to anyone

2) No middleman - By selling directly to the customers Dell can now cutout the middleman. As Dell uses the online direct business model.

3) Increased customer information - Instead of posting  latest brochure or clients account statement, they can access them via website

4) Increase profit by working 24 hours; by saving manpower; by saving money(To start a business company need to do advertising for products or services. How much cost comany need to do advertising on TV and media. But internet is providing  the convenient in this case.

Referencing:

Free reserach paper, n.d., http://www.freeonlineresearchpapers.com/virtual-organizations

Microsoft, 2009, http://encarta.msn.com/dictionary_561533043/digital_economy.html

Digital Economy, 2005, http://books.google.com.my/books?id=Vs-i2DeudL0C&pg=PA315&lpg=PA315&dq=digital+economy+vs+old+economy&source=bl&ots=Fh8k3icHKN&sig=7LhHRADL_5s_ylvpvq3MM3sc7dA&hl=en&ei=OW-aTfzCAszJcb_6wOcF&sa=X&oi=book_result&ct=result&resnum=6&ved=0CDwQ6AEwBQ#v=onepage&q&f=false

Alabama Cooperative Extension System, 2000, http://www.aces.edu/crd/workforce/publications/9-22-00-new-econ-defined.PDF

e-Coach, 2001, http://www.1000ventures.com/business_guide/im_value_chain_virtual%20integration.html