Page 33 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes 9. Restore the Wal-Mart spirit of company founder Sam Walton, of being a decent
neighbour and good employer.
Today’s Wal-Mart is not the Wal-Mart of Sam Walton. Today’s Wal-Mart may be a sales
leader, but has lost its moral compass. Wal-Mart must restore the integrity and respect for
the individual that were the hallmarks of Sam Walton’s values.
Technology
At the core of Wal-Mart’s principles is a commitment to low prices. Managing its inventory
is critical to keeping costs down and is especially important to a large enterprise like
Wal-Mart, which has thousands of stores and tens of thousands of suppliers.

Wal-Mart requires up-to-date sales information as well as good communication with its
suppliers.
Wal-Mart turned to technology in the early 1980s-first for collecting and analyzing sales
data, then for transmitting orders to suppliers through electronic data exchange. By the
1990s, Wal-Mart was collaborating electronically with thousands of suppliers using its
own applications, known collectively as Retail Link.
Although Retail Link elevated Wal-Mart to a new level of efficiency, the company was
saddled with the task of sending the necessary software to vendors, making sure the
vendors had the proper versions, and maintaining a bank of dial-up modems.
Wal-Mart is also strongly committed to effective employee communications. But with
more than a million employees, the company found it difficult to keep staff informed and
connected to one another. Such a connection is especially important to Wal-Mart: Founder
Sam Walton believed that store associates should be thoroughly knowledgeable about
their corner of the business. When employees have important information to share, they
need to know where to send it.
Challenge
To keep costs down, Wal-Mart needed to build on the success of its Retail Link application,
while making the inventory management system easier for vendors to use and for the
company to administer and manage. It also needed to increase productivity by improving
communication among employees.
These challenges were complicated by the fact that Wal-Mart has tens of thousands of
suppliers-all using their own disparate computer systems and technologies. It also has
more than 1 million employees spread out among approximately 4,000 stores, clubs, and
super-centres worldwide.

Solution
Wal-Mart partnered Cisco Systems to transform Retail Link from a traditional dial-in
network to an Internet application and to create-Pipeline, its company-wide intranet.

Vendors can learn how their products are selling, create what-if scenarios, and then work
with Wal-Mart on sell-through and pricing. Password protection provides varying levels
of access to information.
The Cisco solution provided immediate benefits to Wal-Mart:
The system is easier for vendors to use because they need only a Web browser,

rather than specialized software, to access the network.
It is simpler and less expensive to maintain.

Contd...

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