Walmart Smart Inventory System

I live close to a walmart in Burtonsville MD, so I decided to write this Paper on their Inventory System. Wal-mart, the wholesale retail monopoly, focused on developing an RFID-based electronic product code, or EPC. The electronic code would allow businesses to track shipments and inventory automatically through a system of tags and sensors. It was a potential replacement for the manual scanning of bar codes, a technology that itself revolutionized retail two decades earlier.

Given the nearly non-existent cost of bar codes relative to RFID, several in the industry said, the EPC was a solution in search of a problem. Wal-Mart view RFID technology in their SMART system as a means to further enhance its much-envied logistical prowess. Those in the field expected adoption to ultimately be “narrow and deep,” primarily in the area of supply chain management.

The inventory system is called S.M.A.R.T which is not an Acronym but simply a tracking system This system keeps track of all of Wal-Mart's inventory, the on-hand counts, and can automatically detect and record product that is low in stock or sold-out not in stock. The most interaction with the SMART system is through the Telxon. The Telxon is a 900 MHz wireless handheld terminal equipped with a barcode scanner.

When a barcode is scanned, almost instantly the item number, description of the product and amount on order are displayed. The technicalities of this system are a bit too complicated for me but I can only assume that the Telxon is linking to the SMART database to retrieve all of products in the stock database information. All from a simple thing like a barcode which is just a set of numbers that are unique, like a primary key.

A brief history of the Telxon, The Telxon handheld unit, first deployed five years ago, is Wal-Mart's Swiss army knife. Equipped with a keypad, bar-code scanner, a 16-line character display, and radio frequency communications with the in-store servers, it is what is now called a network computer.

No modifications have been made since they were first purchased, though Wal-Mart may replace the units with pen-based computers if the return on investment can be demonstrated. With the Telxon, price changes for each item can be implemented only three times a day with the current system and processes. Wal-Mart is testing LCD shelf tags from NCR that are powered and controlled by infrared light units on the ceiling and can be changed in real time, concurrent with changes at the point-of-sale registers.

The Strengths of The SMART Inventory System are, the actual database has to be enormous. There are so many products that the Wal-Mart keeps track of. All of which must be in the same database because products they don't carry will still scan and give all the detailed information of those Products. This is helpful because it allows people to return products from a "Mega Wal-Mart" that carries a much larger stock than a regular Wal-Mart. Other Strengths are that the SMART system is linked to the cash registers. When a product is sold, inventory is updated automatically. On hand counts are updated and on some products they are reordered automatically, depending on how many are left. With in addition to the RFID technology.

Wal-mart uses smart tag sensors on garments to track better inventory controls, Wal-Mart workers will be able to quickly learn, which size of a particular brand product is missing, with the aim of ensuring shelves are optimally stocked and inventory tightly watched. If successful, the radio-frequency ID tags will be rolled out on other products at Wal-Mart’s more than 3,750 U.S. stores.

While the smart tags can be removed from clothing and packages, another flaw in using these tags, is that they can’t be turned off, and they are traceable. This raises Some privacy issues that criminals will be able to drive by consumers’ homes and scan their garbage to discover what they have recently purchased. Privacy advocates worry that retailers will be able to scan customers who carry new types of personal ID cards as they walk through a store, without their knowledge.

Several states, including Washington and New York, have begun issuing enhanced driver’s licenses that contain radio- frequency tags with unique ID numbers, to make border crossings easier for frequent travelers. Some privacy advocates contend that retailers could theoretically scan people with such licenses as they make purchases, combine the info with their credit card data, and then know the person’s identity the next time they stepped into the store.

Wal-Mart System can only be used By their Company because it was Specifically designed for them and They patented it. This makes no other company to be able to copy their design. Wal-Mart embraced The technology to become an innovator in the way stores track inventory and restock their shelves, cutting costs and passing the savings along to customers. In the process the company became synonymous with the concept of successful supply chain management.

The main disadvantage of Wal-Mart SMART inventory system. is that everything has to be coded with barcodes. Which can lead to additional cost but the main key to an effective barcode system is to get as close as possible to the barcode data source. It will show you up to a 4 years of Inventory Data on some products that are in the inventory. Wal-Mart treats its retail suppliers as partners by giving them access to its data warehouse. Wal-Mart also uses it to keep tabs on supplier performance.

Wal-Mart monitors vendors' ability to meet orders, the lead time required, and the price of their products. Wal-Mart’s approach of cooperation among stores, distribution centers and suppliers and less centralized control. Furthermore, the company’s supply chain, by tracking customer purchases and demand, allows consumers to effectively pull merchandise to stores rather than having the company push goods onto shelves. Wal-Mart reaps the benefits of its supply chain management in the time saved, faster inventory turnover, increased warehouse space and accurate forecasting of inventory levels.

BIBLOGRAPHY

  • traub, todd. "Wal-Mart Used Technology to Become Supply Chain Leader."http://www.arkansasbusiness.com. N.p.. Web. 13 Apr 2013.
  • malone, matthew. "Did Wal-Mart love RFID to death?."http://www.smartplanet.com/. N.p.. Web. 13 Apr 2013.
  • "Wal-Mart to Use Smart RFID Tags to Track Inventory."http://livingdigitalshow.com/. N.p., 23 07 2010. Web. 13 Apr 2013.

The project in this course is to investigate an information system in an existing company. You will interview the information management official (They have various titles.) from a company of your choice. It will be a large enough company to support a formal information management system, with development, maintenance, and life cycle plan. Questions to ask may include information flow, equipment, software, and how information is obtained, captured, processed, and disseminated. Keep in mind systems theory (input, process, output, feedback.) A critical question you can ask is what future developments in information management may evolve in that particular environment.

Based on your learning and research during the semester, critically analyze and evaluate the system you investigate for durability, flexibility, and overall effectiveness. Write a minimum five (5) page paper on that system. The paper will contain a cover page (project title, student name, course title) to be followed by three (3) type-written double-spaced pages in the body of the report, to be followed by a bibliography. Include the name of the company and individual you interviewed.