Brine Shrimp Wal-Mart Stores Inc.

Brine Shrimp

Wal-Mart Stores Inc. has been selected for discussion in this paper. Wal-Mart is currently the largest retailer in global market. The retail industry is the second largest in the U.S. It employs approximately 23 million workers either on a full-time or part time bases. (Toombs and Williams-Harold, 2004) This industry generates about three trillion dollars in sales, annually. The use of technology, especially, information technology in the retail industry has changed the competitive advantages that the players in this industry have enjoyed over the years. Globalization and the integration of the global supply chain in addition to the improvements in transportation and logistical planning is making it easier to ship products from different facilities and warehouses to any outlet point around the world.

Wal-Mart spent considerable time and effort in identifying the variables that affected their return on investment -- they identified the positioning strategy as a dynamic and changing entity. They have made major continuous changes in the way they did business; they changed their logistic and warehousing systems; they also invested extensively in new technology and information systems. These were internal changes. They were implemented throughout the organization. Technology was used as an important variable in managing the supply chain of products in the organization. Centralized warehouses that supplied individual stores were considered as hubs, and inventory was shipped as needed to the various stores. Wal-Mart proposed low profit margins on the goods sold; they generated revenue by ensuring that they turned over inventory at a faster rate than any of their competitors.

Wal-Mart stores use electronic data interchange (EDI) systems and cross-docking strategy to maintain the required inventory levels. (Simchi-Levi, Kaminsky and Simchi-Levi, 2003) Thus, Wal-Mart is able to track all the resources that enter and leave the warehouse and the level of the turnover that is experienced in the system. Wal-Mart has used technology systems to introduce closer working relations with its various suppliers. Wal-Mart is often a major purchaser for any organization that does business with it. "Wal-Mart has a lot of clout because of their buying power. The demands they put on their suppliers go all the way down the line like a game of dominoes." (Simonsis, 2004)

Technology and common platforms for information transfer also require greater transparencies in operation from the supplier. In turn, this allows retailers greater knowledge of the operations and the costing offering them insights into the manner in which the supplier conduct their business and in some cases forcing some changes to better suit their own retailing operations. Wal-Mart mandates that all its suppliers ship their products with radio-frequency identification (RFID) tags on them to the three Wal-Mart distribution centers in the Dallas, Texas. Kerry Pauling, director of Wal-Mart Information Systems Division, pointed out that the new RFID tags would "determine simply if we have merchandise that is in the back room of a store, or if that merchandise has been moved out to the sales floor and what the status of that is. This would make it possible to capture the data without having to use line-of-sight technology, a process that is much slower and more labor-intensive." (Blanchard, 2004) RFID will also help retailers in being able to trace the products, "whether it be for product recalls or to thwart counterfeiting."

Wal-Mart uses high technology to effectively plan and schedule workers shifts. Currently, Wal-Mart boasts 1.2 million workers throughout the world and has been in existence for 43 years (Grant, 2005) HR departments at the different stores and the management constantly ensure that every store has the optimized number of employees to handle the transactions and sales in the store. In the past retailers had permanent employees. Now, Wal-Mart is increasingly employing part-time workers. As the number of stores increase, the number of employees required also increases. Tracking and managing payrolls over a centralized computer database system has proved to be very beneficial for the company.

Wal-Mart invests time and resources to identify products that are preferred by the customer and offering them at prices much below departmental and specialty stores. "Consumer information should be collected systematically and on a timely basis the recommended time between tracking is shortening as shifts in consumer behavior and erosion in brand loyalty accelerate." (Kardon, 1992) Technology and data mining operations have been used to identify market trends and advantages to ensure that the company does not miss opportunities. The increased use of technology to manage operations has also helped Wal-Mart better understand the variables and the impact that these variables have on the profits that can be generated by the company. Peter Drucker stated that markets are not passive entities beyond the control of the entrepreneur or organization; rather, they are very interlinked. Markets can also be influenced.