MIS Project WalMart Industry Environment Analysis Strength WalMarts

MIS Project－ 沃爾瑪

Wal-Mart (二)產業環境分析與優勢 Industry Environment Analysis & Strength

Wal-Mart’s 與競爭者年度業績 (2002) Wal-mart 217, 799, 000 Sears 41, 078, 000 Target 39, 888, 000 Kmart 36, 151, 000 Costco 34, 137, 000

Wal-Mart (三)供應鏈管理 Supply Chain Management

Three basic philosophies for the Wal-Mart IS team 1. Run a centralized IS system for the worldwide operations from Arkansas 2. Common systems & platforms 3. Merchants first and technologists second

Information System Timeline o o 1979: Switched to computerized system to track Inventory 1983: Used barcodes on most goods, equipped all stores with checkout scanners 1990: Implemented a collaborative planning, forecasting, and replenishment (CPFR) process to bring suppliers and distributors together to build a combined planning calendar 1996: Launched E-commerce website

EDI (Electronic Data Interchange) o o o Provides standardized electronic forms that allow computer systems to communicate. Helps reduce costs, delays and errors with documents between companies. Organized messaging, fields, and structure for information.

From EDI to Retail Link EDI o o o Starting in the late 1980’s and mid 1990’s Wal-Mart made use of EDI so that suppliers could connect with their supply chain as well as interact with other suppliers. This allowed them to the suppliers to instantly connect with Wal-Mart to instantly track the sales of their products. EDI was expensive to maintain in that each supplier had to dial-in to a large bank of modems at relatively slow speeds and software had to be distributed to each individual supplier.

From EDI to Retail Link o o Retail Link was developed in the mid 1990’s by Wal-Mart to connect suppliers via internet. This system is much more robust than traditional EDI. Provides real-time forecasting tools and what-if analysis. This also provides faster speeds and automatic software updates Much easier for international suppliers to connect

Electronic Auctions o o o Provides different methods for the procurement of goods. Minimizes costs on transactions between buyers and sellers Three different types n n n Reverse Auctions-buyer initiated Forward Auctions-seller initiated Exchange Auctions-operated by a third party

Wal-Mart’s Reverse Auctioning o o o Wal-Mart uses reverse auctioning as its method of procuring goods. It requires all participating companies to go through an extensive background check, and agree to a legally binding contract Furthermore, it requires that all participating companies have a certain level of technology that cooperates with its technology to minimize costs of transactions.

Wal-Mart and Cross Docking o What Wal-Mart has that allows Cross Docking n n n Interlocking support systems over and above traditional ROI criteria Continuous contact among Wal-Mart’s distribution centers, suppliers and every point of sale Logistics infrastructure for fast and responsive transportation o Supported by its 19 distribution centers and nearly 2000 company owned trucks

Wal-Mart and Cross Docking o By saving this money and stabilizing there shipping system, through Cross Docking, Wal-Mart is able to achieve: n n n Low prices by eliminating frequent promotions Stable prices and predictable sales which in turn reduces stock-outs and excess inventory Lower prices bring in more customers which increases sales per retail square foot

Wal-Mart and Cross Docking o In Wal-Mart’s Cross Docking system, good never spend more than 48 hours at one loading dock. n o o Good are in one door, and out the other. Wal-Mart has its own trucking to make this easier and again to minimize costs. Runs 85% of its goods through its warehouse system (Kmart runs at 50%)

The CPFR Process Seller FRONT END AGREEMENT Collaborative Planning JOINT BUSINESS PLAN CREATE SALES FORECAST Collaborative IDENTIFY EXCEPTIONS Goal : Link buyer and Seller Forecasting Electronically RESOLVE EXCEPTIONS CREATE ORDER FORECAST IDENTIFY EXCEPTIONS Collaborative Replenishment RESOLVE EXCEPTIONS Buyer GENERATE ORDER

Wal-Mart’s CPFR Program o o o CPFR has “blurred the lines between supplier and customer” Suppliers buy into their program because they have to to work with Wal-Mart, but more importantly, because Wal-Mart’s Systems provide increased profits for Wal-Mart and their suppliers Wal-Mart “teaches” their suppliers how to minimize shipping, inventory and other costs by showing them their own model.

E-Commerce o o o Defined as transactions conducted electronically between businesses via networks. n Internet n Ethernet n Private Networks Includes: Ordering, shipping, payment, planning collaboration and performance agreements. Over $700 million in transactions in 2001

B 2 B E-Commerce (Seller) Suppliers Intranet Extranet Internet EDI Manufacturer Customer Order Application EDI Web Application Customers 42

B 2 B e-Commerce (Buyer) Organization Purchase Order Application Intranet Extranet Internet Suppliers EDI Internal Buyers Web Application Distribution 43

Benefits of E-Commerce o Minimize Costs n n o o Inventory Storage Shipping Maximize Efficiency Improve both customer and supplier relations

Wal-Mart and E-Commerce o o Wal-Mart is a leader in E-Commerce Uses Supply Chain Management, Automated Order Entry Systems, EDI, Cross Docking and Private Industrial Networks Cost of Goods Sold is 5 -10% less than its competitors CPFR program

成本利益（Cost advantages） o 國際供應鏈（International supply chain）之運用 n n o 國際性配銷系統 國際供應商 國外製造 完全整合的國際供應鏈 電子商務之運用以降低成本 n n n just-in-time inventory Point of Sale(POS) ＆ Retail Link CRS ＆ VMI Electronic Data Interchange (EDI) collaborative planning, forecasting, and replenishment (CPFR)