Management of Information Technology (BCO6653) Current Practice Analysis

This report summarises the implementation of the ERP systems in the Walmart organisation where the inventory management and the order fulfilment was significantly difficult for the company and it led to the downfall of the revenue of the company.

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Abstract
This report summarises the implementation of the ERP systems in the Walmart
organisation where the inventory management and the order fulfilment was
significantly difficult for the company and it led to the downfall of the revenue of the
company. The ERP could be considered as the section of the software for the
business management that could be used by any organisation for the collection,
storing, managing and the interpretation of the data from the several activities of the
business. The company Walmart was founded in the late 1962 and the it has been in
the business of selling any product to each of the people who requires the products in
their daily life with the strategy of the low price. The major reason behind the success
of the Walmart could be discovered due to the focus on the constant improvement of
the operation using the efficient practices of the supply chain management.
Introduction
The aim of this report is to provide the common idea about the implementation of the
ERP solution in the company Walmart where the business processes were facing
several problems due to the lack of the automation. The literature analysis of the
successful implementation of the ERP solution in the company is briefly discussed in
this report along with the appropriate summarising of the case study of the success
has been provided in this report. the company procured the goods straight from all
the manufacturers by the bypassing of the middlemen along the supply chain of the
company. The major difficulties could be associated with the system, the
infrastructure, the business process, the training and the lack of the motivation.
Therefore, it is critical for the organisation to extensively go through the process of
the analysis of the business processes prior the implementation of the ERP software.
The analysis could be helpful in the identification of the opportunities for the process
modernisation. It also allows the assessment of alignment of the present processes
with the processes that are provided by ERP system. The research indicates that the
risk of the business process mismatch could be decreased by the connecting the
present processes to the strategies of the organisation, analysis of the effectiveness
of every process and the understanding of the prevailing automated solutions. The
ERP implementation could be considered as increasingly difficult in the decentralised
organisation due to the fact that the organisations commonly have the various
processes, the various business rules, the different data semantics, the authorisation
hierarchies and decision of the centers. The supply chain of the company majorly
provide the horizontal collaboration where it develops the effective collaboration
among the retailers, suppliers and the customers for the creation of significant value.
Lastly, this report concludes with the appropriate conclusion for the report.
Literature analysis
The literature analysis of the successful implementation of the ERP solution in
Walmart company has been briefly stated here after the brief analysis of the success
Management of Information Technology (BCO6653) Current practice paper

Current practice analysis for BCO 6653 * Management of Information Technology 2
factors and the process by which the company gained success in the implementation
of the ERP solutions. It could be observed that the company gained hugely from the
implementation of the ERP in the company and the supply chain of the company
improved extensively.
Implementation of the ERP in Walmart
The company considered the ERP system as the vital tool for the organisation as it
helps in the integration of the varied systems of the organisation and it also helps in
the facilitation of the production and the transactions that are error free. Moreover,
the development of any ERP system significantly differs from the conventional
system development. The ERP systems could execute on the variety of the
computer hardware and the configurations of the network and commonly it utilises
the database as the repository of the information of the company. The major
characteristics of the ERP that were beneficial for the organisation are the capability
of the system to provide the base for the integrated systems that operates in or in the
real time deprived of the dependence on the periodic updates, the mutual database,
which supports all the applications, the constant look and the feel among the
modules and the installation of system with the extensive application and the data
integration by the department of the information technology. It was observed by the
company during the implementation of the ERP systems that the ERP scope
commonly implies the significant alteration of the work processes of the staff and the
practices. Commonly there are three kinds of services that are available for helping
the implementation of the changes that has been implemented by the organisation,
which are the support, customisation and the consulting. The implementation time
depended on the size of the business, the number of the modules, scope of the
process changes and the effectiveness of the company to undertake the ownership
for this implementation project. The modular ERP systems could be implemented by
the following of the stages. The common project for the large enterprise undertakes
almost 14 months and it also requires almost 150 consultants, and the company had
to employ almost 140 consultants for the successful implementation. As the
customisation substantially increases the time of the implementation, the project took
longer than it was expected by the company. The information processing influences
across the various business functions and the Walmart utilised this software for the
just in time inventory system. It reduces the inventory storage and it also helps in the
increasing of the delivery efficiency and it requires the updated data. The company
uses the system called the Inforem that has been developed by the IBM for the
management of the replenishment.
Process preparation for the Implementation of ERP in Walmart
The implementation of the ERP commonly requires the alteration in the prevailing
business processes and there were several changes that were made in the working
of the business process of the organisation. The poor understanding of the required
changes in the process before the starting of implementation is the major reason for
the project failure and the company employed the skilled workers for providing the
required consulting regarding the various aspects of the implementation project. The
major difficulties could be associated with the system, the infrastructure, the
business process, the training and the lack of the motivation. Therefore, it is critical
for the organisation to extensively go through the process of the analysis of the
business processes prior the implementation of the ERP software. The analysis
could be helpful in the identification of the opportunities for the process
modernisation. It also allows the assessment of alignment of the present processes
with the processes that are provided by ERP system. The research indicates that the
risk of the business process mismatch could be decreased by the connecting the

Current practice analysis for BCO 6653 * Management of Information Technology 3
present processes to the strategies of the organisation, analysis of the effectiveness
of every process and the understanding of the prevailing automated solutions. The
ERP implementation could be considered as increasingly difficult in the decentralised
organisation due to the fact that the organisations commonly have the various
processes, the various business rules, the different data semantics, the authorisation
hierarchies and decision of the centers. It could require the migration of the various
business units prior others and it leads to the delaying of the implementation of the
work using the required alteration for each of the unit and possibly reduce the
integration or the customisation of the system for meeting the particular
requirements. As the company Walmart comprises of the distinct business processes
and the integration was significantly difficult as the ERP system provides the
common platform for integrating all the business processes and when some of the
business processes were integrated in the early stages of the implementation, some
of the other business processes were damaged due to the breaking of the
continuous link among the business process.
Configuration for the Implementation of ERP in Walmart
It was analysed by the company that the configuration of the ERP system is highly
matter of the balancing the methods by which the organisation desires the system to
function with the method by which the system had been designed for working. The
ERP system commonly includes the several settings that could help in the
modification of the system operations. The company selected the FIFO for utilising in
the recognising the revenue by the geographical unit, the product line or the
distribution channel and the decision of whether to pay for the costs of the shipping
on the returns of the customers. The ERP system are in the theoretical sector based
on the best practices of the industry and the makers intends that the organisation
deploys them. The ERP vendors offers the customers with the options of the
configuration that allows the organisation with the incorporation of their respective
rules of the business but frequently it features the gaps still exists even afterwards
the configuration has been executed by the organisation. The customers of the
company have the various options for the reconciling of the features gaps and each
of them consists of its own advantages and the disadvantages. The technical
solutions includes the rewriting of the part of delivered software, writing of the
homegrown module for working into the ERP system or the interfacing to any
external system. The company had to implement the proper functions for the
migration of the data from the prevailing system to ERP system. The migration was
considered as critical to the success of the implementation and it requires the
significant planning. The methods that has been deployed by the company to plan
the migration includes the identification of the data that is required to be migrated,
the determining of the timing of the migration, generating the data templates,
freezing the toolset, deciding upon the setups that are migration related and the
defining of the policies and the procedures for the data.
Centre for distribution, trucking fleet and cross docking
The distribution system used by Wal-Mart to distribute raw materials from
manufacturers to numerous retail stores is a bi-step Spoke and Hub distribution
method. The centre for distribution receive goods and products from numerous
suppliers and then the goods are sorted according to fulfill the requirement and
demand of the several stores. Then the sorted products are shipped to the suppliers.
This system of distribution is known as Cross-Docking. The process minimizes
handling cost, avoids inventory cost and there is nearly a 2-3% reduction in the
product cost (Tan et al. 2018). Truck load of products are ordered by Wal-Mart. As
soon as the goods reach the distribution centers, the products are docked on the

Current practice analysis for BCO 6653 * Management of Information Technology 4
trucks that are owned by the company (Wood and Pasquier 2018). The company
trucks carry different good that needs shelving in specific stores. Forklift truck are
used to ease out the cross docking process. There is a mechanized instruction
process, which instructs the driver of the truck what to transport and from where to
the delivery location. The delivery status is immediately updated in the system. The
cross-docking model provides great help to Wal-Mart in increasing production and
increase efficiency in the sorting and the shipping process of merchandise. The
company keeps the truck drives updated with real time traffic updates to make
delivery smoother and quicker (Pagell and Wu 2017).
Planning, Prediction and Replenishment
The major role to effectively implement cost saving methods is played by
customer demands. Wal-Mart has the Retail Information System which provides
visualization to the company about real time availability of goods and products in
each of the stores. Wal-Mart practices collaborative forecasting rather than demand
forecasting (Hugos 2017). This particular forecasting helps Wal-Mart in quickly
replace products which are out of stock or a good quantity have been sold. Wal-Mart
replaces the exact number of goods that have been sold and avoids hoarding of
stocks. Bullwhip effect is avoided by Wal-Mart by enabling this process. Barcode,
Massively Parallel Processor, Radio Frequency Identification and Point Of Sale aids
Wal-Mart in recognizing deduction in inventory and the need for resupplies. POS
became a significant factor of the demand forecasting (Muñoz Kenny and Stecher
2018). Barcodes and RFID were used to keep a track of the flow of the product
leaving the inventory, manage the supply chain and track the different kinds of
products leaving from the store (Shin and Eksioglu 2015). Barcodes are used
dynamically across all platforms to keep a track of the inventory. The barcodes are
scanned across all of the suppliers and scanned once more when delivered by the
suppliers to feed the information into central database of the company to create an
inventory list. RFID chips hold important information about the products being
delivered. The data on the chip is fed into the system once it comes in contact with
the receiver (Shin and Eksioglu 2015). This system helps Wal-Mart to track and keep
control on the entire supply chain. RFID is highly advantageous as it improves logistic
efficiency, reduces time in merchandise identification, reduces human labor
effectively and provides high convenience in inventory checking. . It could require the
migration of the various business units prior others and it leads to the delaying of the
implementation of the work using the required alteration for each of the unit and
possibly reduce the integration or the customisation of the system for meeting the
particular requirements. RFID involves high cost in implementing the model and Wal-
Mart is not fully equipped to make investment in RFID. RFID can work on metallic,
wet, glass pallet makes it an invincible technology and a requirement for all. MPP or
Massively Parallel Processor holds a large chunk of data of sales, POS transaction
and inventory. The chief purpose to use MPP is to keep a stringent track on the
movement of stock.
Major risks:
The resource planning of the organization can be said to be the inside corporate
development helping a firm settle on the decisions that are speedy as well as
noteworthy decline of the operational cost of the business that are improved.
The researchers have recognized that each of the competencies have been made out
of different diverse concealed limits, which are also known for controlling the
rationalities and methods in order for completing the express collaborations.

Current practice analysis for BCO 6653 * Management of Information Technology 5
Major benefits:
 Fastened time for response
 Interaction that is elevated across the organization
 Interaction between the customer that is best
 Deliver that is faster in the time
 Better interaction with the suppliers
 Low level of inventory
 Best currency management
 Direct operating costs that are decreased.
Center for distribution:
The center for distribution receive goods and products from numerous suppliers and
then the goods are sorted according to fulfill the requirement and demand of the
several stores. Then the sorted products are shipped to the suppliers.
This system of distribution is known as Cross-Docking. The process minimizes
handling cost, avoids inventory cost and there is nearly a 2-3% reduction in the
product cost
Vendor Managed Inventory and Electronic Data Interchange
Wal-Mart uses Electronic Data Interchange to reduce transaction cost
effectively I ordering products and also in the payments of the invoices with
simultaneously conducting with suppliers. Wal-Mart will hugely benefit from EDI as it
has the capability to provide coordination and control of the product. The system will
also help in scheduling of delivery and receiving of the goods from suppliers. EDI
ensures perfect delivery system for goods and products, the goods reach at the right
time and at the right place. Wal-Mart is very particular about stocking product in the
distribution centre; they store it for a short time that is till cross docking takes place
(Simpson and Power 2016). Once cross docking takes place, the merchandise is
immediately shipped across to the stores. The suppliers are given a stipulated time of
four days to get the product to the distribution centers. This strict rule imposed by
Wal-Mart makes the suppliers use third party logistic warehouse to send the products
to the distribution centre on time (Ayers and Odegaard 2017). The analysis could be
helpful in the identification of the opportunities for the process modernisation. It also
allows the assessment of alignment of the present processes with the processes that
are provided by ERP system. The research indicates that the risk of the business
process mismatch could be decreased by the connecting the present processes to
the strategies of the organisation, analysis of the effectiveness of every process and
the understanding of the prevailing automated solutions. The ERP implementation
could be considered as increasingly difficult in the decentralised organisation due to
the fact that the organisations commonly have the various processes, the various
business rules, the different data semantics, the authorisation hierarchies and
decision of the centers. It could require the migration of the various business units
prior others and it leads to the delaying of the implementation of the work using the
required alteration for each of the unit and possibly reduce the integration or the
customisation of the system for meeting the particular requirements.The third party
warehouses are not managed by the manufacturers. The warehouses are mostly
rented by suppliers. This particular concept is called Vendor-Managed-Inventory.
Conclusion

Current practice analysis for BCO 6653 * Management of Information Technology 6
The study discusses about ERP benefits in an organization. The objective is
been addressed and it is important to implement ERP in the corporate framework.
ERP model provides massive help in managing business and easy automation of
back office services and functions. Implementation of ERP will prove to be highly
beneficial to company’s success in operations in the new economy. ERP will help the
organization will gain the desired effect. To effectively measure the benefits of ERP,
there is a need to draw firm competency. The ERP implementation could be
considered as increasingly difficult in the decentralised organisation due to the fact
that the organisations commonly have the various processes, the various business
rules, the different data semantics, the authorisation hierarchies and decision of the
centers. The supply chain of the company majorly provide the horizontal collaboration
where it develops the effective collaboration among the retailers, suppliers and the
customers for the creation of significant value.The major failure for organizations is
that the organizations do not keep proper records of the inventory and sometime it is
noticed that the organizations do not bother to track the performance of the company
after the completion of the project. Proper assessment of performance and
productivity helps the company to understand its flaws and invest in better strategies
to increase efficiency and productivity. Researches in the future can be based on
comparative analysis on the impact of ERP implementation on the performance of the
organization. This can be done by either considering ERP or by the adoption of SCM
system, or both the processes can be simultaneously considered.

Current practice analysis for BCO 6653 * Management of Information Technology 7
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