Wal-Mart has achieved supply chain efficiency through various technologies and techniques: 1) RFID is used to track inventory in stores and share updates with suppliers. 2) Retail Link provides vendors with sales data to forecast demand. 3) A hub and spoke distribution system and company-owned transportation allows replenishing stores within 48 hours.

1. Study of
MIS Being Employed
by Wal Mart

2. WAL-MART'S SUPPLY CHAIN MANAGEMENT TECHNIQUE
Wal-Mart's success is solely due to their efficiency in supply chain management and
logistics. Wal-Mart turns over their inventory on a weekly basis.
K-Mart turns over their inventory on an average of three to four times a year. Both companies
have the same set-up and concept
RFID SYSTEM
104 Wal-Mart stores and 36 Sam's Clubs, the company has installed RIFD. RFID readers at
the receiving docks at the back of the building, near the trash compactors and between the
back room and the retail floor.
For the cases of goods that are shipped to the stores with RIFD tags, Wal-Mart records their
arrival by reading the tag on each case and then reads the tags again before the cases are
brought out to the sales floor.
By using sales data from its existing point-of-sales system, which is not using RFID, Wal-
Mart subtracts the number of cases of a particular item that are sold to customers from the
number of cases brought out to the sales floor.
When a case is brought out to the sales floor, the system records that it's being put out on the
shelves.
When the case is read at the trash compactor, the status within the system is changed to "on
shelf."
Suppliers can get updates on the location of their goods within 30 minutes of the goods·
movement from one part of the store to another with a98%read rate.
WAL-MARTS SUPPLY CHAIN MANAGEMENT TECHNIQUE
- RETAIL LINK
Wal-Mart uses Retail Link to provide vendors with the information needed to forecast
demand for their products.
Product is the Roll-on Insulator Kit, to accurately forecast, Use Retail Link to view the
historical sales of your product.
Insufficient work without the information provided from Retail Link, Wal -Marts Retail Link
extranet, it has begun to integrate RFID process, radio frequency identification data, to the
original 7 Wal-Mart stores in Texas.
This technology gives an accurate reading on what items have been replenished, therefore not
relying on people to record the information.
By using this technology it will reduce out-of-stocks by providing the location of goods with
RFID tags.
It helps the retailer by sharing its data with the suppliers automatically notifying when items
are on the shelves.

3. WAL-MART SUPPLY CHAIN
Using the RFID tags, shipments are automatically entered into their system, and each
department has a handheld "Telxon”.
Every tag on the shelves is scanned to get on-hands and when an item is purchased at the
register, it is automatically taken out of their system.
STAGES OF SUPPLY CHAIN MANAGEMENT
´ Timber company
´ Paper manufacture
´ Packaging
´ P & G or other manufacture
´ Third party DC
´ Wal-mart store
´ Customer
COMPETITIVE ADVANTAGE FROM INFORMATION
TECHNOLOGY
Point-of-sale system: A computerized system that identifies each item sold, finds its price
in a computerized database, creates an accurate sales receipt for the customer, and stores this
item-by-item sales information for use in analyzing sales and reordering inventory. Aside from
handling information efficiently, effective use of this information helps Wal-Mart avoid
overstocking by learning what merchandise is selling
slowly.
Over one 5 year period, Wal-Mart invested over $600 million in information systems.
Telecommunications
Wal-Mart use telecommunications to link directly from its stores to its central computer
system and from that system to its supplier's computers. This allows automatic reordering and
better coordination. Knowing exactly what is selling well and coordinating closely with
suppliers permits Wal-Mart to tie up less money in inventory than many of their competitors.
At its computerized warehouses, many goods arrive and leave without ever sitting on a shelf.

4. Only10% of the floor space in Wal-Mart stores is used as an inventory area, compared to the
25% average for the industry.
BAR CODE SCANNNG
The idea of bar code scanning required that industry develop a universal product code (UPC)
system, a standard method for identifying products with numbers and coding those numbers
as the type of bar code shown in the photo.
The use of bar code scanners made it unnecessary to stamp the price on every item (except in
states that still require this for consumer protection).This reduced costs but also eliminated
jobs of some of the clerks who formerly did the stamping
CROSS DOCKING
Wal-Mart has invested heavily in its unique cross-docking inventory system. Cross docking
has enabled Wal-Mart to achieve economies of scale, which reduces its costs of sales.
With this system, goods are continuously delivered to stores within 48 hours and often
without having to inventory them.
The system reduced the handling and storage of finished goods, virtually eliminating the role
of the distribution centers and stores.
The manufacturer directly forwarded the goods to a place called the staging area. The goods
are packed here according to the orders received from different stores and then directly sent
to the respective customers.
Lower prices also eliminate the expense of frequent sales promotions and sales are more
predictable.
Cross docking gives the individual managers more control at the store level
TRANSPORTATION SYSTEM
A company owned transportation system also assists Wal-Mart in shipping goods from
warehouse to store in less than 48 hours. This allows Wal-Mart to replenish the shelves 4
times faster than its competition.
Wal-Mart owns the largest and most sophisticated computer system in the private sector. It
uses a MPP (massively parallel processor) computer system to track stock and movement
which keeps it abreast of fast changes in the market. Information related to sales and
inventory is disseminated via its advanced satellite communications system.
HUB & SPOKE SYSTEM
In the early1970s, Wal-Mart became one of the first retailing companies in the world to
centralize its distribution system, pioneering the retail hub-and- spoke system. Under the
system, goods were centrally ordered, assembled at a massive warehouse, known as
distribution center· (hub), from where they were dispatched to the individual stores (spoke).
The hub and spoke system enabled Wal-Mart to achieve significant cost advantages by the

5. centralized purchasing of goods in huge quantities and distributing them through its own
logistics infrastructure to the retail stores spread across the U.S.
MAGIC WANDS
Employees at the stores had the ´Magic Wand, a hand-held computer which was linked to in-
store terminals through a radio frequency network.
These helped them to keep track of the inventory in stores, deliveries, and backup
merchandise in stock at the distribution centers.
VOICE-BASED ORDER FILLING (VOF)
In1998, Wal-Mart installed a voice-based order filling (VOF) system in all its grocery
distribution centers.
Each person responsible for order picking was provided with a microphone/speaker headset,
connected to the portable (VOF) system that could be worn on waist belt.
They were guided by the voice to item locations in the distribution centers. The VOF system
also verified quantities picked, and could respond to a variety of requests such as providing
product detail (type, price, barcode number, etc.)
By installing the VOF system, Wal-Mart eliminated mispicks and product labeling costs
since the system did not require paper lists and labels to be affixed on the goods.
INVENTORY MANAGEMENT
(PRETTY DARN QUICK DISPLAYS)
The company asked its suppliers to ship goods in store-ready displays called pretty darn
quick (PDQ) displays.
Goods were packed in PDQ displays that arrived at the stores ready to be boarded on the
racks.
Wal-Mart’s employees could directly replace the empty racks at the stores with fully packed
racks, instead of refilling each and every item at the racks
INVENTORY MANAGEMENT
With the rapid expansion, it was essential to have a good communication system. Hence, Wal-
Mart set up its own satellite communication system in19 83.
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.
Instead of cutting the 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 levels.
REORDERING SYSTEM

6. Wal-Mart built an automated reordering system linking computers between Procter &
Gamble ("P&G") and its stores and distribution centers. The computer system sends a signal
from a store to P&G identifying an item low in stock. It then sends a resupply order, via
satellite, to the nearest P&G factory, which then ships the item to a Wal-Mart distribution
center or directly to the store. This interaction between Wal-Mart and P&G is a win-win
proposition because with better coordination, P&G can lower its costs and pass some of the
savings on to Wal-Mart.
EDI
Retail Link connected Wal-Mart’s EDI (Electronic Data Interchange) network with an
extranet, accessible to Wal-Mart’s thousands of suppliers. The suppliers could find out how
their product was performing vis-à-vis competitors· products in a particular product category.
MPP
The company used Massively Parallel Processor (MPP) computer system to track the
movement of goods and stock levels. All information related to sales and inventories was
passed on through an advanced satellite communication system
CPFR
By the mid19 90s, Retail Link had emerged into an Internet-enabled SCM system whose
functions were not confined to inventory management alone, but also covered collaborative
planning, forecasting and replenishment (CPFR).
In CPFR, Wal-Mart worked together with its key suppliers on a real-time basis by using
the Internet to jointly determine product-wise demand forecast.
CPFR is defined as a business practice for business partners to share forecasts and results
data through the Internet, in order to reduce inventory costs while at the same time,
enhancing product availability across the supply chain
CPFR: HARD TO IMPLEMENT
Though CPFR was a promising supply chain initiative aimed at a mutually beneficial
collaboration between Wal-Mart and its suppliers, its actual implementation required huge
investments in time and money.
A few suppliers with whom Wal-Mart tried to implement CPFR complained that a
significant amount of time had to be spent on developing forecasts and analyzing sales data.