Sam Walton who is regarded as the entrepreneur of the century started Wal-Mart in Rogers Arkansas in 1962 and since then Wal-Mart has had amazing success and growth surpassing all other U.S department store retailers. Walton was known for always caring for customers and his employees, these Walton�s beliefs and philosophies are upheld by Wal-Mart stores today where their main value is customer service.
Wal-Mart became very successful land grew remarkably in the 1980�s with its sales increasing to $29 billion in 1989 from $1 billion in 1980. Also in this decade store wise, Wal-Mart increased its number of outlets to 1400 with the first warehouse club (SAM�S club) created in 1983 and the first super center consisting of a grocery department and 36 merchandise departments in 1988. By the end of the century Wal-Mart was named retailer of the century by discount store news.
Wal-Mart success can be tied its relentless focus on satisfying customer needs and innovative implementation of strategic management decisions. Walton emphasized the need for strong relationships between employees and suppliers, and also capitalizing on every possible cost saving opportunity with the overall goal of making quality goods accessible to customers when they needed them while maintaining a competitive price and absolute trustworthiness.
Based on their founder�s belief Wal-Mart created the everyday low prices slogan and to bring this to reality Wal-Mart started investing heavily in the latest technologies that could help it achieve this goal. An example of this is the Cross docking inventory system, in this system goods are constantly delivered to Wal-Mart warehouses where they are repacked and then sent to stores. With this method goods can be delivered to stores in 48 hours. Cross docking allows Wal-Mart to enjoy economies of scales that have resulted from buying goods in bulk while reducing storage and handling costs. This system reduces Wal-Mart�s sales costs by 2-3% and this makes it possible for Wal-Mart to maintain its low prices compared to its competitors. In adapting to this change in inventory Wal-Mart has had to change it managerial approach, Wal-Mart managers through the use of information systems now leave the task of deciding the products that will be sold and their prices to consumer demand.
The largest and most sophisticated computer system in the private sector is owned by Wal-Mart, this system a Massive Parallel Processor which allows Wal-Mart to track the movement of the goods it has in stock there by keeping it informed of market trends. This information on sales and inventory is sent through its satellite communication system to all Wal-Mart managers nationwide so they can make effective decisions on the goods to be put on the shelves. Wal-Mart also has it company owned trucking system which enables Wal-Mart to ship goods from warehouses to stores at a rate four times faster that its competition.
With suppliers Wal-Mart strives to negotiate the best prices while maintaining quality requirements and good business relationship with suppliers. With Procter & Gamble Wal-Mart has an automatic reordering system that identifies when items are low in stock and then sends a reorder to the Procter & Gamble factory. Also soon Wal-Mart will start using RFID (radio frequency identification) to help both its sales and its suppliers. These RFID tags contain silicon chips which have more detailed information than barcodes and will help in better stocking of shelves, reduce store theft, assist in product recalls, warranties and better product reordering amongst others.
In following Walton�s belief of respecting employees and satisfying customers needs Wal-Mart human resources system has come with programs like stock ownerships and profit sharing with the aim of making the employees more dedicated to their jobs and customers in general.
It is no doubt that Wal-Mart has surpassed all its competition to become the world�s largest company. However the factor the differentiates Wal-Mart form its competitors is that thought they all have the same rules for doing business Wal-Mart invests in technologies that will carry out these rules efficiently. Wal-Mart has come to show that technology cab be used to improve business.
References
http://www.walmart.com
http://www.walmartstores.com
http://www.informationweek..com
http://www.emich.edu