Use of Information Technology in Logistical Operations of Wal-Mart

Introduction

In line with its key objective of low consumer prices, Wal-Mart made aggressive investments in available information technology (IT) systems for the retail market earlier than its market rivals did. Notably, in the year 1969, Wal-Mart was amongst the first retailers to track their inventory with the assistance of computers. Subsequently, the company adopted the use of bar codes when making sales in the year 1980. The next technology that Wal-Mart utilized after the bar codes is the electronic data interchange (EDI) that improves  its coordination and data exchange procedure with its suppliers. The combination of these information technology devices, and introduction of wireless scanning guns into its data processing systems have been facilitating quick monitoring of sales at every store of the company. These massive investments in information technology have been significantly supportive to the company’s logistical operations as IT allows quick reduction of inventory and boosts both its labor productivity and capital.

Information Technology at Walmart

            It is arguable that Wal-Mart is always strategic when making investments in technological devices and applications. It mainly focuses on IT applications and devices that would directly assist it in achieving low consumer prices, which is its main value proposition. For instance, Wal-Mart made an investment in Retail link program, which is a program capable of directly capturing data on sales giving real-time stock quotations to vendors. Wal-Mart utilizes the efficiency and dependability of the Retail link program to increase sales in its various stores using micro merchandising. The Program also assists Wal-Mart to monitor its stocks efficiently and eliminates the chances of under-stocking in every store. A well-managed product stores and stocks ensures that the company’s logistical processes are up and going; hence, leading to consumer satisfaction.

Another important investment that Wal-Mart has made in information technology is establishment of an intricate satellite network. Wal-Mart’s satellite network provides a link that connects point of sales terminals in every store of the company. The principal concept behind the design of the satellite network was provision of information on inventory status and real-time sales information to the company’s sales force, customers, and managers. Manufacturers and suppliers in the company’s supply chain are able to synchronize the projections of their demands through a replenishment and forecasting scheme. With the help of the satellite network, a point of sale system at the store, and central database, it is possible to connect every link in Wal-Mart’s supply chain. The tracking of customer demands and purchases ensures that the supply chain offers the customers an opportunity to pull goods to stores instead of reliance on the company’s workforce to push them on the shelves.

  Wal-Mart has also been using radio frequency identification tags (RFID). RFID has numerical codes that after scanning from any distance, allows for tracking pallets of goods that are moving in the supply chain system. Wal-Mart has been encouraging its suppliers to utilize the RFID technology since both the suppliers and Wal-Mart must normally handle an inventory. Another information technology worth mentioning is the smart tags. Information on a smart tag is readable using a handled scanner. Wal-Mart’s employees use the smart tags in determining goods that need replacement thereby, ensuring an up-to-date inventory in all stores of Wal-Mart.

Therefore, it is palpable that Wal-Mart utilizes information technology efficiently in its logistical operations. The use of technology like RFID leads to quick scanning of product information that are moving along the supply chain even when they are distances away from the point of distribution. The linkage of point of sales in every store of the company makes it easier to process customer demands and quotations as well as efficient monitoring of stock. The use of technology to quicken and improve most activities is crucial to the general improvement of its supply chain.