Inventory management system of Wal Mart

Wal Mart, a largest retailer, with more than 2.1 million employees made a sales of $405 billion in 2010 which is a leading position that helped it to get the top rank in Fortune Magazine 2010. So this was possible through good inventory management. Large companies use different inventory software mainly which can print bar code labels, payment receipts, receive lists, purchase orders, and create invoice and much more. Finding out the warehouse status, inventory levels and safety stock are also done by this software. (IM, 2003-2011)

Wal Mart does same with these tools to ensure efficient inventory management. (Chandran P.M, 2003) In this case Wal Mart determines the customers demand and manage the inventory through IT infrastructure. (Chandran P.M, 2003) Moreover, Wal Mart maintains Just in Time technology to estimate the needs of inventory from suppliers maintaining collaboration with P&G through an automated re ordering system and thus built a satellite communication system. So P&G can distribute directly to concerned stores. (Chandran P.M, 2003). The most privilege for Wal Mart is that it needs not to order frequently to P&G rather P&G supplies directly and can lowers cost. (Chandran P.M, 2003). Employees at the stores had the Magic Wand, a hand-held computer which was linked to in-store terminals through a radio frequency network. Benefits from that these helped them to keep track of the inventory in stores, deliveries, and back up merchandise in stock at the distribution centres. (Chandran P.M, 2003)

They use Point of Sales system, Sophisticated Algorithm System for forecasting exact quantities. Then also use a Centralized Inventory Data System to find out the level of inventories. (Chandran P.M, 2003). Through radio frequency technology and bar code technology to ensure accurate distribution of goods and to manage inventories, and Massive Parallel Processor Computer System to track the movement of stock and goods level is used by Wal Mart. So we can evaluate that IT system is making benefits through improving performance, cost savings, faster turnover of inventory and finally better customer service.