Analysis of Walmart's Supply Chain Management System: A Case Study

This case study examines Walmart's supply chain management system, focusing on the application of Management Information Systems (MIS) to optimize operations. It provides an overview of Walmart's business, highlighting its global presence and commitment to efficiency. The study delves into key aspects of Walmart's SCM, including procurement, inventory management, voice-based order filling, quick replenishment strategies, and the Retail Link system. Furthermore, it explores the implementation of Collaborative Planning, Forecasting, and Replenishment (CPFR) and Radio Frequency Identification (RFID) technology. The analysis reveals how Walmart leverages MIS to reduce costs, improve responsiveness, and gain a competitive edge. The study concludes with recommendations for further improvements in Walmart's MIS to maintain its leadership position in the retail industry.

WALMART- Supply Chain Management System
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S t u d e n t N a m e :
S t u d e n t U n i v e r s i t y :
Case Study

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Contents
Introduction................................................................................................................................2
Overview of the company..........................................................................................................2
MIS in Supply Chain Management............................................................................................2
Use of MIS in SCM of Walmart................................................................................................4
Walmart’s Procurement.........................................................................................................4
Inventory Management..........................................................................................................4
Voice-based Order Filling (VOF)..........................................................................................5
Quick Replenishment.............................................................................................................5
Pretty Darn Quick (PDQ) displays.........................................................................................5
Retail link system...................................................................................................................5
Collaborative Planning, Forecasting, and Replenishment (CPFR)........................................6
Radio Frequency Identification (RFID) Technology.............................................................7
Conclusions and Recommendations..........................................................................................7
References..................................................................................................................................8

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Introduction
Management information system (MIS) is used for operations in the organizations to
collect data from various online systems, analysing information and secure decision-making
in business by data reporting through computer system consists of hardware and software to
improve results (Laudon & Laudon, 2016). The flow of goods and services including the
process of transforming raw materials in final products is known as supply chain
management (SCM) involving business activities related to supply for customer value
maximization and gaining competitive advantage in the market place (Pettit, et al., 2019). In
this report, the aim is to know the importance of MIS in supply chain management system of
Walmart by analysing its strengths and weaknesses. Various recommendations will be given
for Walmart to improve its MIS based on its strengths and weaknesses which will lead to
generating competitive advantage for the company.
Overview of the company
Walmart is a chain of departmental stores, hypermarkets and grocery stores operate as
an American global retail corporation formed by Sam Walton in 1962. They deliver to almost
265 million customers with 11,200 stores in 27 countries across the globe including e-
commerce websites in 10 countries. Walmart covers the workforce of nearly 2.2 million and
wants to be a leader of all time over the world (Walmart, 2019). The company aims at using
its strengths and work with others for transforming systems they are dependent on. It
advances goals and commitments at concerned areas to provide opportunity, teamwork, and
sustainability to benefit the bottom line of the business (Lascala, 2019). The company thinks
of creating values to share with customers and society. The approach of the company is to
make a global responsibility its core business looking towards its strengths and core
capabilities. They focus on teamwork with company’s partners, key stakeholders, and
suppliers by taking collective action.
MIS in Supply Chain Management
MIS plays a vital role in SCM by increasing the company’s ability to minimize costs
and increase the response of the supply chain. It is used to manage information between the
key stakeholders involved in the process of supply chain. The need for MIS is to analyse the
capabilities and benefits provided to organizations with the support from MIS substitutes in
the SCM. Moreover, the company can face risky and complex issues while decision-making

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to analyse and select an accurate solution or to make sure the systems implemented are
associated with the strategies of businesses (Fredendall, 2016). It is up to the capability of the
company for achieving the goals by providing multiple resources with functional
requirements, structure desired, and competitive strategies. The evaluation of various MIS is
done to reduce the complexity and examine the enabling of MIS in SCM knowing
organizational capabilities. The theories of competitive strategy, inter-organizational
information systems, and supply chain management are used to develop the models for
improvement and incorporation. SCM is all about incorporating practical information and
flow of materials with the process of demand and supply. The information system of SCM is
made to provide information processing capability for supporting the operations, functions
related to decision-making, strategy, and management analysis in the company’s network of
supply (Carter, et al., 2015).
MIS provides information flow from time to time, supreme quality, and relevancy for
supporting the decision-making effectively. It is used for capacity activation, sync in material
flows and inventory replenishment at all the levels of the supply chain. To design an efficient
system for SCM reach to failures sometimes even after putting an efforts but the primary
purpose is to identify the MIS of SCM with its characteristics, introduction, and factors to be
categorized critically for MIS of SCM and investigating the power by explaining CFFs
(critical failure factors) on the performance of the process of supply chain performed through
this system (Shiau, et al., 2015). MIS impact SCM on the processing of planning, delivering
and sourcing for handling the operations from company’s strategy. The relationship between
both is collapsed and different aiming to focus on enhancing performance in terms of
functioning of product, processes, and supply to reduce costs, increment at delivery and
reliability speed, and customer service improvisation. MIS is essential to manage the supply
chain through information and communication technologies (ICT) (Zhang, et al., 2016). This
makes it able to handle transactions, insight of management development and performing
communications and information exchange. ICT used as a tool in SCM introducing systems
like EDI (electronic data interchange) with the solutions of MRP (manufacturing resource
planning) and ERP (enterprise resource planning) for the development of complex supply
chains and support them for increment. In the organizations, the impact it has is related to the
technology aspects to deal with implementation, development, and execution of MIS in SCM
(Rosemary & Kiarie, 2018).

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Use of MIS in SCM of Walmart
MIS is different from other standard information system for analysing operational
activities in the organizations. It helps management in improving decision-making and
providing appropriate vital aspects to have information about the performance of the
company. Walmart performs various changes, especially in its logo. The company is focused
fulfilling the needs of the customer and efficiently work on cost reduction through supply
chain management practices (Ge, et al., 2019). Walmart is one of the first retailing industries
across the globe for distribution centralization with the innovating of retail “hub-and-spoke”
system. The company’s products were ordered centrally at the distribution center collectively
at a supreme warehouse known as hub and individually shipped to the stores meant as spoke.
Walmart uses this system for achieving the advantages in the centralization to the substantial
cost within its distributing system of logistics set-up in the retail stores range across the US.
Walmart’s Procurement
The company reduced the purchasing costs as needed for direct procurement by
manufacturers within the mediators. Walmart, after the confident about its products not being
available anywhere at a lesser price, finalized a purchase deal in the company. It was
essential to spend some amount of time for meeting with retailers and to understand the cost
structure. Moreover, company creating transparent process for the retailer confidence to make
sure manufacturers doing their best to cut down costs. The use of EDI in procurement is:
 Walmart’s suppliers are connected to its computer systems.
 Empowering suppliers for allowing EDI to download information related store-to-
store about sales of products sold and its purchase orders;
 To receive information linked to sales of multiple products and requirement of goods
shipped by suppliers to the distribution centers of Walmart (Ayers & Odegaard,
2017).
Inventory Management
Investment in communication systems and IT of Walmart stores to track products and
sales records effectively around the country. In 1983, Walmart had its satellite
communication system necessary for its quick expansion. The company is able to reduce
unproductive record of the company by permitting management of stocks, pack size
reduction in stores with multiple categories of product and prices reductions time-to-time.
Walmart started to make use of IT competencies rather than minimizing the record for

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making massive records availability considering items customers demand with the decrease
in overall record levels (Vanpoucke, et al., 2017). The employees thought of having “magic
wand” referred as hand-held computer at the stores linked to the areas of in-store frequency
of radio network. It helps them to know about the in-stores records, backup stock and
deliveries of the in stock at the distribution centers. The POS (point-of-sale) system is used to
implement products order management and store replacement with the help of computers.
This system makes possible to track and monitor products stock and sales levels in-store
(Waller, et al., 2015).
Voice-based Order Filling (VOF)
In the distribution channels of grocery, Walmart set-up the VOF system in 1998
where every individual is accountable for order picking connected to the portable VOF
system provided with speaker headset. The voice was being used as a guide to point locations
in the distribution centers (Kakhki & Gargeya, 2019). The picked-up quantities were also
verified through this system while responding various requests of providing detail of the
product. Walmart excluded costs of product labelling and mispicks after installation of VOF
system as not requiring the lists on paper and labels fixed on the products.
Quick Replenishment
Walmart store floor area wide-ranging from 40,000 to 200,000 sq. ft. with the
movement of goods which is crucial for logistics operations part (Walmart, 2019). The
company made essential investments in IT fir locating and restocking products at the stores
rapidly.
Pretty Darn Quick (PDQ) displays
It means to ask suppliers for shipping products in store-ready displays as per the
company. PDQ displays arrival of packed goods at the stores for getting ready for boarding
the shelves. The employees of Walmart directly replaced the empty shelves in-store with
packed shelves full of products rather than restocking.
Retail link system
To build a retail link system, Walmart devoted $4 billion approximately in 1991 with
more than 10,000 retail suppliers to monitor product sales at stores and restock records.
About 10 million everyday transactions per day were managed with details through this
system (Walmart, 2019). Walmart’s EDI network got connected with Retail Link with an

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extranet gaining access to thousands of suppliers for them to find outperformance of the
product against rivals’ products in a specific product kind (Rubin, 2018). Walmart is a private
company and possessed the most refined computer system using massive parallel processor
(MPP) with the responsibility of stock points and goods. An innovative satellite
communication system was to provide information linked to inventories and sales. The most
refined computer system was possessed by Walmart within the isolated segment. The use of
computer system named massive parallel processor (MPP) by the company shows the
inventory and products points in undertaking in which the facts are linked to the stock and
sales to be ahead as an innovative communication system named as satellite.
Collaborative Planning, Forecasting, and Replenishment (CPFR)
Retail Link was developed in an Internet-enabled SCM system for the non-confined
functioning to inventory management individually in the mid-1990s covering CPFR.
Walmart worked with its leading suppliers together in CPFR based on the actual time using
Internet to together examine the demand forecast product-wise. It meant as a business activity
for the indulging partners for sharing forecasts and outcomes data over the Internet to reduce
stock costs on the actual time with improvement of product availability through the supply
chain.
CPFR: Hard to implement
As it is a committed step of supply chain targeted at benefitting equally between the
teamwork of Walmart and its suppliers. The real execution has the utmost requirement of
investing in money and time. The complaints regarding the implementation of CPFR by
Walmart with its suppliers was the amount of time on the development of forecast and sales
data analyse (Sanders, 2016).
VAN EDI versus Web EDI
Walmart went through the 14,000 suppliers to turn on the existed VAN (value-added
networks) EDI to web-enabled EDI in 2002 (Rosemary & Kiarie, 2018). It works for routing
and management of EDI messages for its customers by executing web-EDI. The company
saved millions of dollars in the way of authorizing costs to the private VANs.

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Radio Frequency Identification (RFID) Technology
In 2003, the new technologies were executed to make efforts on cost reduction and
efficiency increment where Walmart approached to its top 100 suppliers for being RFID
obedient by 2005 (Shin & Eksioglu, 2015). The company planned for replacing bar-code
technology with RFID technology to make them believe about the SCM costs reduction
replacement and efficiency improvement. Walmart thought that RFID would cut the stock-
outs orders at the stores. There is no requirement of the employees for scanning the bar codes
on products after the implementation of RFID for entering into stores and distribution centers,
to save cost and time of the workforce.
Conclusions and Recommendations
Walmart’s ability to use and improve its IT tools efficiently discussed like EDI, VOF,
CPFR, and RFID. The company achieved the practice of cost reduction and competence.
Walmart needs to put efforts for setting a standard model to implement strategy of the
company for long-term. The company aims to provide success and MIS operations related to
SCM. Investing in IT tools comes out with world-wide competitiveness in the long-term by
reducing the operation costs for standardization. It is crucial to operating the MIS efficiently
and carefully for preventing failures. It is essential for Walmart to constrict the scope of
goods for appropriate tracking of inventories. RFID in the company helps in the efficiency
improvement and need to find better system to support RFID system for redefining products.

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