A Management information system (MIS) is a system or process that provides information needed to manage organizations effectively. Management information system gives the business managers the information that they need to make decisions. Early business computers were used for simple operations such as tracking inventory, billing, sales, or payroll data, with little detail or structure but now days it has been replaced by the advanced techniques like ERP, EPM, SCM and SAP. Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization.
HISTORY OF WALLMART Sam Walton who is a businessman from ARKANASAS, begin his carrier with retail industry and started working on June 3, 1940. On July 2 1962 he opened first walmart discount city store located in ARKANASAS. Walmart is one of the most technically advanced companies in the world and reason behind this is availability of accurate and up to date information which intern a basis of its growth in the market. And for collecting the accurate information on time it is necessary that management should continuously review the information, which is possible only by an integrated management system. Walmart became one of the first companies in retail sector to use MIS.
MIS IN DIFFERENT FUNCTIONS OF THE ORGANISATION: 1.OPERATIONS: In the world of retailing, Wal-Mart has what is considered to be the most sophisticated distribution system called Retail Link. This system connects each store with headquarters and over 2,000 suppliers so that they will never run out of or have too much inventory. Wal-Mart turns over their inventory more than any other retail store.
The current challenge exists with supplying their overseas stores, especially while this is the area that they are concentrating on growing. In order to become more efficient overseas, Wal-Mart has started is on Customs Brokering division to take care of its global procurement, which saves them brokering and freight forwarding fees, and also gives them more control. They have also started to "request" strongly that their suppliers also be physically located in the countries where Wal-Mart is to better supply them.
APPLICATION OF MIS IN “OPERATIONAL” ACTIVITIES : Operational activities in retail industry are having following functions Procurement of material Transportation Inventory management Reordering
Procurement of material Walmart is a bulk purchaser and they follow centralised purchased system, so the company directly procure the materials from manufacturers thus eliminating all the intermediaries and middlemen. This is essential to reduce the cost and offer best pricing. They first find out the potential supplier and then after getting prices from everyone the will decide finally according to the cost structure of the offer. For efficiently managing this information wall mart uses EDI model(electronic data interchange) it is basically a computer based system of walmart in this system the computers of suppliers and vendors are connected with walmart.
EDI enables supplier to download purchase order along with store to store sales information related to their product like no of product sold, no. of product received. As supplier receives the information about sales of various products, the supplier shipped the required goods to different walmart distribution centres. Basically it is a high speed integration system between supplier and walmart and which is very helpful in making the process fast and efficient.
Transportation A company owned transportation system also assists Wal-Martin 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 visits advanced satellite communications system.
MPP is basically used to track the movement of goods and stock level and information for this is transmitted through advanced satellite communication system. So when the information about movement of goods is transmitted it automatically generate the information and pass it on to transportation department and from there the logistic facility is ensured.
Inventory management Wal-Mart invested heavily in IT & communication system to effectively track sales and merchandise inventories in stores across all the outlets in the country. For this company needs to have excellent communication system. And Walmart is using the technique of PRETTY DARN QUICK DISPLAY (PDQ) TECHNIQUE. In this technique the company asked its suppliers to ship goods inshore-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.WalMart’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. HUB AND SPOK 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-andspoke system.
Under the system, goods were centrally ordered, assembled at a massive warehouse, known as distribution centre· (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 centralized purchasing of goods in huge quantities. And also the used of RFID technology (radio frequency identification) this technique is used to replace the bar coding technique and increase the efficiency of employees because with this employees are no longer requires to physically scan the bar code thus it improve efficiency and reduce the stock outs.
Wal-Mart built an automated reordering system linking computers between Procter & Gamble ("P&G") and its stores and distribution centres. 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 centre 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. Thus walmart is efficiently using the MIS to achieve efficiency and cost minimization.
2. MARKETING FUNCTION (MIS) Marketing activities are directed toward planning, promoting, and selling goods and services to satisfy the needs of customers and the objectives of the organization. Marketing information systems support decision making regarding the marketing mix. These include: 1. 2. 3. 4. Product Price Place Promotion
Sources of Data and Information for Marketing: Boundary-Spanning and Transaction Processing Subsystems A marketing information system relies on external information to a far greater degree than other organizational information systems. It includes two subsystems designed for boundary spanning - bringing into the firm data and information about the marketplace.
The objective of marketing research is to collect data on the actual customers and the potential customers, known as prospects. The identification of the needs of the customer is a fundamental starting point for total quality management (TQM). Electronic commerce on the WEB makes it easy to compile statistics on actual buyer behaviour.
Marketing research software supports statistical analysis of data. It enables the firm to correlate buyer behaviour with very detailed geographic variables, demographic variables, and psychographic variables. Marketing (competitive) intelligence is responsible for the gathering and interpretation of data regarding the firm's competitors, and for the dissemination of the competitive information to the appropriate users.
Most of the competitor information comes from corporate annual reports, media-tracking services, and from reports purchased from external providers, including on-line database services. The Internet has become a major source of competitive intelligence.
Marketing Mix Subsystems The marketing mix subsystems support decision making regarding product introduction, pricing, promotion (advertising and personal selling), and distribution. These decisions are integrated into the sales forecast and marketing plans against which the ongoing sales results are compared. Marketing mix subsystems include: Product subsystem Place subsystem Promotion subsystem Price subsystem Sales forecasting
Product Subsystem The product subsystem helps to plan the introduction of new products. Continually bringing new products to market is vital in today's competitive environment of rapid change. Although decisions regarding the introduction of new products are unstructured, information systems support this process in several ways:
Professional support systems assist designers in their knowledge work DSSs are used to evaluate proposed new products With a DSS, a marketing manager can score the desirability of a new product. Electronic meeting systems help bring the expertise of people dispersed in space and time to bear on the problem Information derived from marketing intelligence and research is vital in evaluating new product ideas.
Place Subsystem The place subsystem assists the decision makers in making the product available to the customer at the right place at the right time. The place subsystem helps plan the distribution channels for the product and track their performance. The use of information technology has dramatically increased the availability of information on product movement in the distribution channel. Examples include: Bar-coded Universal Product Code (UPC) Point-of-sale (POS) scanning Electronic data interchange (EDI) Supports just-in-time product delivery and customized delivery
Promotion Subsystem The promotion subsystem is often the most elaborate in the marketing information system, since it supports both personal selling and advertising. Media selection packages assist in selecting a mix of avenues to persuade the potential purchaser, including direct mail, television, print media, and the electronic media such as the Internet and the WEB in particular.
The effectiveness of the selected media mix is monitored and its composition is continually adjusted. Database marketing relies on the accumulation and use of extensive databases to segment potential customers and reach team with personalized promotional information. The role of telemarketing, marketing over the telephone, has increased.
Telemarketing calls are well supported by information technology. Sales management is thoroughly supported with information technology. Customer profitability analysis helps identify high-profit and high-growth customers and target marketing efforts in order to retain and develop these accounts.
Sales force automation involves equipping salespeople with portable computers tied into the corporate information systems. This gives the salespeople instantaneous access to information and frees them from the reporting paperwork. This increases selling time and the level of performance. Access to corporate databases is sometimes accompanied by access to corporate expertise; either by being able to contact the experts or by using expert systems that help specifies the product meeting customer requirements.
Price Subsystem Pricing decisions find a degree of support from DSSs and access to databases that contain industry prices. These highly unstructured decisions are made in pursuit of the companies pricing objectives. General strategies range from profit maximization to forgoing a part of the profit in order to increase a market share. Information systems provide an opportunity to finely segment customer groups, and charge different prices depending on the combination of products and services provided, as well as the circumstances of the sale transaction.
Sales Forecasting Based on the planned marketing mix and outstanding orders, sales are forecast and a full marketing plan is developed. Sale forecasting is an area where any quantitative methods employed must be tempered with human insight and experience.
The actual sales will depend to a large degree on the dynamics of the environment. Qualitative techniques are generally used for environmental forecasting - an attempt to predict the social, economic, legal, and technological environment in which the company will try to realize its plans. Sales forecasting uses numerous techniques, which include: Group decision making techniques are used to elicit broad expert opinion Scenario analysis in which each scenario in this process is a plausible future environment Extrapolation of trends and cycles through a time-series analysis.
3.FINANCE For the fiscal year ending January 31, 2011, Wal-Mart reported a net income of $15.4 billion on $422 billion of revenue with a 24.7 percent gross profit margin. The corporation's international operations accounted for $109.2 billion, or 26.1 percent, of total sales. It is the world's 18th largest public corporation, according to the Forbes Global 2000 list, and the largest public corporation when ranked by revenue.
Walmart on an average hire about 10000 employees every year and on opening every single store Walmart employees 300 new employees. Their main source of funds is there sales and basic expenditure goes on building new stores and employees salary.
4.Human Resource Management Wal-Mart operates internationally in 4263 stores and 660000 workers with 15 countries outside. Information system is centralized Operations are decentralized Meetings provide opportunity to focus customer feedback Respect for individual, service to customer & striving for excellence and leadership Employee advancement programs Campus recruitment Good retention rate Training and development is regular Sams suggesting system.
Job Hierarchy at Wal-Mart
Wal-Mart is the largest non-government employer in the world. They realize that turnover is high in retail, but that their associates are one of their most important assets. Their written policy regarding associates is as follows: "they are encouraged to maintain the highest standards of honesty, morality, and business ethics". In order to become a Wal-Mart associate, candidates must take a multiple-choice test and select what are considered the appropriate "Wal-Mart" responses in order to be hired. Due to the fact that Wal-Mart strives to keep their costs low, they do not offer high wages.
They exist on many part-time and temporary workers, do not offer these employees benefits, and do not pay their employees enough to live on. Wal-Mart has a 20-30% cost advantage over competition, as their labor is not unionized. Besides facing current litigation for not paying employees for overtime there are and have been several cases regarding discrimination on the basis of gender (female) that females are often not hired or promoted to be managers.
Sociocultural Throughout the world there is a large shift in our demographics. There currently is a larger aging population than ever before, and at the same time the birth-rate in developed countries is decreasing, as it is increasing in underdeveloped countries. Due to advances in medicine individuals are living longer and longer, as it seems we can beat any disease. Health is becoming more and important to individuals as they exercise and eat better; everyone wants to stay healthy longer. At the same time in the United States in particular the population is getting fatter and fatter, preschool age children are being labelled as obese.
Shopping has turned into a favourite pastime for the whole family, and when buying big-ticket items, everyone has a say. Increasingly there are more single-parent households, which do not leave much disposable income. Most two-parent households have both parents working and earning more, living in bigger houses, taking more vacations, and owning more cars. On the other hand we are currently experiencing a great deal of the American public has been downsized, and may be unemployed, starting a new career, or back in school.
Technological Due to the current recession the government has been looking for any way possible to save money, and unfortunately research and development, nonmilitary that is, was one of the first things to go. However many of the suppliers to
retail are forced to continue their R&D programs as competition is stiff and their product line needs to continually be updated. Technology is growing at an incredibly rapid pace that no one can keep up with it. There have been amazing growths in the areas of health, consumer goods, and food due to technology. As consumers are used to the ever-growing technology they are not as wary of it as in the past, but do not buy the newest thing, as quickly because the item it replaces is less than a year old.
Production is becoming more and more automated which is pushing individuals out of jobs. The Internet is widely available in the United States, but that is not the case in the rest of the world. Even in parts of Europe many houses do not have computers much less access to the Internet. Telecommunications structures continue to be improved upon or even built.
Internal Environment Being the largest non-government employer and corporation in the world, WalMart is bound to have an interesting internal structure put in place. So what exactly is the method to all the madness? Let's look inside Wal-Mart's Internal Environment.
Corporate Structure Wal-Mart is a public corporation, however the majority of the stock is still held by Walton family members. Therefore, there is lots of family involvement at the top level. The headquarters are in Bentonville, Arkansas, along with the control and decision making ability of the organization. There is a very hierarchical structure in place which only fuels the "good 'ol boys club" for top management. The other unique element in Wal-Mart's corporate structure is a strong culture that is fueled by the Wal-Mart way of doing things, which as far as they are concerned is the only way.
Management The top management and most support functions are centralized at the headquarters in Arkansas. Most of the top management started by working their way up for a store manager and making a name for themselves. It is assumed that in order to be an effective executive the individual needs to have the experience from the store in order to know what they are talking about. The control also lies in Bentonville, each day the store managers in each and every store must submit reports and update the inventory, where the results are sent to headquarters and reviewed.
Wal-Mart Compensation and Benefits Wal-Mart has benefit packages that are available to employees and their families. The Health and Wellness Benefits include comprehensive medical coverage with no lifetime maximum. The medical coverage allows each member of the family to have an annual wellness check, pharmacy benefits, dental insurance, and short and long-term disability. There are also financial benefits, which include an Associate Stock Purchase Plan, Retirement Account Rollover, Associate Discounts, 401k savings plan, profit sharing plan, paid holidays, vacation and personal time.
5.Customer Relationship Management The primary goal of CRM systems is to increase the return on marketing expenditures by enabling the understanding of the complete history of a firm’s interactions with its customers. Customers, newly endowed with the power of market information, have much different expectations than before. Customers can easily move their business to another vendor with the click of a mouse. Customers now have almost unlimited ability for interactions with organizations through the Web in addition to the traditional phone and mail methods.
Company web sites facilitate information search, shopping and customer support. Customer Relationship Management Functions Better customer information enables more effective demand forecasting, product launches and marketing campaigns. CRM functions are sometimes referred to as the company’s “front office.” CRM functionality includes: 1. E-commerce support 2. Sales force automation 3. Telesales and call centre automation 4. Direct mail and catalogue sales 5. Email and e-newsletter response 6. Web sales and personalization 7. Analysis of Web generated data
8. Traditional customer support and service 9. On-line support and customer service 10. Mobile support through laptops, handheld devices. 11. Training Modern CRM systems are fully integrated with the “back office” elements of the enterprise resource planning (ERP) system such as accounting, manufacturing, project management, and human resources. This integration enables the sharing of customer information that can impact the operations of the enterprise and vice versa.
Common customer definitions, price lists, employee definitions, service requests, call histories, order histories, contracts, service level agreements are accessible by all who need them. Correspondingly, marketing can access information on items such as new product
development, product costs, order status, delivery dates and backorders. Speed in which this information can be collected, analysed and acted upon can provide real competitive advantage to the user. This information can be used to better serve customers, streamline a company’s operations, and develop better strategy. Some marketers use the data to better target advertising and marketing plans.
Others sell or trade the data with other Web sites. Unfortunately, guidelines for how this information is collected, how it may be used, and how it is to be protected are not widely accepted. Since most non-IS people use privacy, confidentiality and security interchangeable, it is important to clarify some definitions before moving on.
Privacy, as marketers define it, is the right not to be contacted or marketed to unless the customer has granted specific permission or “opted in.” Security means keeping unauthorized persons from gaining access by breaking into the information system. Confidentiality is defined as maintaining appropriate controls on information so that only those authorized can access or use it.
A marketer may respect customer’s privacy and only contact her after gaining permission, but they may have an insecure system that allows hackers to access credit card transaction data. Alternatively, a marketer may respect privacy rights and have a very secure system, but inadvertently releases patient’s health care record to the news media. In order to avoid these and other pitfalls, marketers must act to increase system security, establish confidentiality procedures and training, and implement privacy policies.