Case Study

Wal-Mart’s SMC System

Wal-Mart stores are big retail chains all over the world. They have the policy of selling quality goods at a cheaper price. For this they have a different strategy. One of them is by Electronic Data Interchange between Suppliers and Wal-Mart, which helps to save money. The use of EDI program between Supplier and Wal Mart not only saves time but also it will help to eliminate the cost of middleman. It will also facilitate for exchange of information quickly and easily. Wal-mart’s ERP Systems works on a integrated systems between stores. They constantly monitor their sales 24/7. They monitor the goods which sells and try to update those information with the suppliers so that the shelve wont be empty. So their ERP system not only works between the stores but it works in a coordinated manner with the warehouse, shipping facilities and between the suppliers. So it is very important for wal-mart to have a system that facilitates effective flow of information between all the parties. So Suppliers play a very important role in the overall success for these things. 
To be a supplier for wal-mart, suppliers need to meet certain criteria set by Wal-mart.

Wal-mart will work with suppliers to reduce prices on items that significantly reduce energy use for customers. They not only require sound and good financial position but also need who maintain certain ethical and environmental standards. The products exported from China are always subject to safety and environmental issues. , So Wal-mart requires that they meet certain key standards. Also they require the supplier to have Universal Product Code, which is easily read by machines. Also they require the suppliers to have applicable liability and workers compensation program.

Wal-Mart will consider the retailers

a. Have a good track record.

b. Have a unique product

c. Have a product line

d. Are able to meet Wal-Mart’s need

e. Are prepared to change the current system to a system compatible with that of Wal-Mart.

The supplier information program will start after the supplier has conducted a Supplier evaluation program. Then they have to submit the products online on the Wal-Mart’s stores. Besides that the supplier has to submit strong and solid financial statements.

“EDI has proven to be the most efficient way of conducting business with our product suppliers. This system of exchanging information-purchase orders, invoices,