MANAGEMENT INFORMATION SYSTEM IN WALMART
MANAGEMENT INFORMATION SYSTEM Definition of MIS management information information system (MIS) is a system system or process that provides information needed to manage organizations effectively
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Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities activities in the organization.
OBJECTIVES
To
improve the management decision-making.
By providing accurate and up-to-date information about the key aspects of organizational performance
CHARACTERSTICS 1.Management
oriented :The system is designed form the top to work downwards.
2. Management directed : Management orientation of MIS, it is necessary that management should continuously make reviews. 3. Integrated : The word 'integration' 'integration' means that system has to cover cover of all the functional areas of an organization so as to produce more meaningful management information. 4.Common data flows : common data flow concept avoids avoids repetition and overlapping overlapping in data collection and storage 5. Heavy element : A management information system cannot be established overnight. It takes almost 2 to 4 years to establish it successfully in an organization.
FUNCTIONS 1.Data
processing : It includes the collection, transmission, storage, processing processing and output of data.
2.Function 2.Function of prediction : It predicts the future situation by applying modern mathematics, statistics or simulation. 3. Function Function of plan : It arranges reasonably the plans of each functional department . 4. Function Function of control : It monitors and inspects the operation of o f plans and comprises with the differences between operation and plan. 5. Function Function of assistance : It derives instantly the best answers of related problems problems by applying to various of mathematics' mode and analyzing a plentiful data stored in computers .
HISTORY OF WAL-MART ´
Sam Walton, a businessman from Arkansas, began his retail career when he started star ted work work on June 3, 1940,
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He opened a new Ben Franklin franchise in Bentonville, Arkansas but called it "Walton's Five and Dime.´
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On July 2, 1962, Walton Walton opened the first Wal-Mart Discount City store located in Rogers, Arkansas.
WAL-MART'S SUPPLY CHAIN MANAGEMENT TECHNIQUE
The
importance impor tance of supply chain management and logistics in modern day business.
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Wal-Mart's Wal-Mart's success is solely due to their efficiency eff iciency in supply chain management and logistics.
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Wal-Mart Wal-Mart turns over their inventory inventory on a weekly basis.
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K-Mart turns over over their inventory inventory on an average of three to four times a year.
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Both companies have have the same set-up and concept.
RFID SYSTEM
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Wal-Mart Wal-Mart stores and 36 Sam's Clubs, the company company has installed 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 s hipped to the stores with RFID tags, Wal-Mart records their arrival arr ival by reading the tag on each case and then reads the tags again before before the cases are brought out to the sales s ales floor. 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 par ticular item that are sold to customers from the number of cases brought out to the sales floor.
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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 par t of the store to another with a 98% 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
Insufficient work without the information provided from Retail Link,.
accurately forecast, Use Retail Link to view the historical sales of your product.
Wal Wal -Marts -Mar ts Retail Link extranet, extranet, it has begun to integrate integrate RFID process, radio frequency identification identification data, to the original 7 Wal-Mart stores in Texas.
This
technology gives an accurate reading on what items have have been replenished, r eplenished, therefore not relying on people to record the information.
By using this technology it will reduce out-of-stocks by by providing 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.
WAL-MART SUPPLY CHAIN
Using the RFID tags, shipments are automatically automatically entered into into their system, and each department depar tment 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
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Paper manufacture
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Packaging
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P & G or other manufacture
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Third
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Wal-mart al-mar t store
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Customer
party DC
WAL-MART INTERNATIONAL
COMPETITIVE ADVANTAGE FROM INFORMATION TECHNOLOGY ´
Point-of-sale system : A compute computerized rized syst system em that identifies identifies each item sold, finds its price in a computerized computerized database, creates an accurate sales receipt for the customer, customer, and stores this item-by-item item-by-item sales information for use in analyzing sales and reordering inventory. Aside from handling information efficiently, effective use of this information information helps Wal-Mart Wal-Mart avoid overstocking overstocking by by learning what merchandise is selling slowly.
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Over one 5 year period, Wal-Mart invested over $ 600 million in informat information ion systems. systems.
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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. 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. Only 10% of the floor space in Wal-Mart stores is used as an invent inventory ory area, compared to the 25% average for the industry.
BAR CODE SCANNNG ´
The
idea of bar code scanning required that industry industr y develop develop a universal product code (UPC) system, a standard standa rd method method for identifying products with numbers and coding those numbers as the type of bar code shown in the photo.
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The
use of bar code scanners scanner s made it unnecessary unnecessar y to stamp stamp the price on every item (except in states that still require this for consumer protection). protection). This reduced costs but also eliminated jobs of some of the clerks who formerly did the stamping.
CROSS DOCKING ´
Wal-Mar Wal-Martt has invested heavily heavily in its unique cross-docking inventory inventory system. Cross docking has enabled Wal-Mart Wal-Mart to achieve achieve economies of scale, which reduces its costs of sales. With this system, goods are continuously delivered to to stores within 48 hours and often of ten without having to inventory inventory them. The system reduced the handling and storage of finished goods, virtually eliminating the role of the distribution centers centers and stores. The
manufacturer directly forwarded the goods to a place called the ´staging area.µ
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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 gives the individual managers more control at the store level.
TRANSPO TRA NSPORT RTA ATIO TION N SYSTE SYSTEM M ´
company owned transpor transportation tation 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. A
Wal-Mar Wal-Martt owns the largest and most sophisticated computer computer system in the private private sector. sector. It uses a MPP (massively parallel processor) computer computer system to track stock and movement which keeps it abreast of fast changes in the market . Information related to to sales sa les and inventory is disseminated via its advanced satellite communications system.
HUB
& SPOKE SYSTEM
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In the early 1970s, Wal-Mart became one of the first retailing companies in the world to centralize its distribution system, pioneering the retail hub-andspoke system.
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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).
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The
hub and spoke system enabled Wal-Mart Wal-Mart to achieve achieve significant cost advantages by the centralized purchasing of goods in huge quantities.. «
and distributing them through its own logistics infrastructure to the retail stores spread across the U.S.
WITH VENDORS.. ´
Wal-Mart spends a significant amount of time meeting vendors and understanding their cost structure.
By making the process transparent, the retailer can be certain that the manufacturers are doing their best to cut down costs. ´ Wal-Mart finalizes a purchase deal only when it is fully confident that the products being bought is not available else where at a lower lower price. ´
MAGIC WANDS.. ´
Employees at the stores had the ´Magic Wand,µ a hand-held computer which was linked to instore terminals terminals through a radio frequency network.
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These
helped them to keep track of the inventory in stores, deliveries, and backup merchandise in stock at the distribution centers.
VOICE-B ASED ORDER FILLING (VOF) ´
In 1998, Wal-Mart installed a voice-based order filling (VOF) system in all its grocery distribution centers.
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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.
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They
were guided by the voice to item locations in the distribution centers.
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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.)
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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 affixe af fixed d on the goods.
INVENTORY MANAGEMENT« PRETT Y DARN DARN QUICK DISPLA D ISPLAYS YS (PRETTY ´
The
company asked its suppliers to ship goods in store-ready displays called pretty darn quick (PDQ) displays.
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Goods were packed in PDQ displays that arrived at the stores ready to be boarded on the racks.
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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 in 1983. ´ 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, WalMart made full use of its IT capabilities to make more inventories inventories available in the case cas e of items that customers wanted most, while reducing the overall inventor inventoryy levels.
REORDERING SYSTEM ´
Wal-Mart built an automated reordering system linking computers between Procter & Gamble ("P&G") and its stores and distribution centers. 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 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) Interchange) network with an extranet, accessible to Wal-Mart·s thousands of suppliers.
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The
suppliers could find out how their product was performing vis-à-vis competitors· competitors· products in a particular par ticular product category.
MPP ´
The
company used Massively Parallel Processor (MPP) computer system system to track the movement of goods and stock levels.
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All
information related to sales and a nd inventories inventories was passed on through an advanced satellite communication system.
CPFR ´
By the mid 1990s, Retail Link had emerged into an Internetenabled SCM system whose functions were not confined to inventory inventory management alone, a lone, but also covered collaborative planning, forecasting and replenishment (CPFR).
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In CPFR, Wal-Mart worked together together with its key suppliers on a real-time basis by using the Internet to jointly determine determine product-wise demand forecast.
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CPFR is defined as a business practice for business partners partner s to share forecasts and results data through the Internet, in order to reduce inventory inventory costs while at the same time, enhancing enha ncing product availability availability across the supply chain.
CPFR: H ARD
TO IMPLEMENT
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Though
CPFR was a promising supply chain initiative aimed at a mutually beneficial collaboration between Wal-Mar Wal-Mar t and its suppliers, its actual implementation implementation required huge investments in time t ime and money mon ey..
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few 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.
DECISIONS ´
Smaller retailers Primarily dollar stores, such as Family Dollar and Dollar General, have been able to find a small niche market and compete successfully against Wal-Mart for home consumer sales. sales. In In 2004, Wal-Mart responded by testing its own dollar store concept, a subsection of some stores called Pennies-n-Cents.
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In China, Wal-Mart hoped to succeed by adapting and doing things preferable to Chinese citizens.
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For example, it found that Chinese consumers preferred to select their own live fish and seafood; stores began displaying the meat uncovered and installed fish tanks, leading to higher sales.
Experiment Experiment with a massive Hyper-mart, encompassing encompassing more than 230,000 square feet in size failed. Customers complained that the produce was not fresh or well-presented well-presented and that it was difficult dif ficult to find things in a store so big that inventory clerks had to wear roller skates. A
revised concept was launched- The Super-center, Super-center, a combination combination discount and grocery store that was smaller than the Hyper-mart.
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one-stop shopping destination, Super-centers would have the full array of general merchandise found in traditional Wal-Mart Wal-Mart stores, as well as a full-scale supermarket, delicatessen, fresh bakery, and other specialty shops like like hair salons, portrait por trait studios, dry cleaners, and optical wear departments.
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Super-centers would measure 125,000 to 150,000 square feet, and target locations where sales per store of $30 to $50 million annually were feasible and it was a success this time round.
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