INSTITUT SINARAN

MKT 233- E-COMMERCE

Task : Group Assignment

Students Name : Amanda Lim Pui Sze (13DM244)
Nabeela Binti Zainal (13DM239)
Ng Jing En (13DM233)
Tahnee Tsen Tze Ting (13DM256)

Program : Diploma in Commerce

Lecturers Name : Mr Sam Yet Huat

Due Date : 13 October 2014

2


Q1: Why Wal-Mart is concentrating on Supply Chain Projects?

This is because Wal-Mart feels that this is an area of strength and being efficiency in this
area can lead to greater profit. Wal-Mart is investing heavily to improve their supply chain
management constantly as it will allow them to lower their overall costs and to increase
profit margin. To illustrate this, prior to the efforts on supply chain management in 2002,
they generated a return of 3% on the sales of $218B. In 2011, their revenue doubled and
their profit margin increased to 6.1%. By constantly upgrading the management of product
through the various distribution channels and the process in which consumers receive
products, time and money can be saved by Wal-Mart which in turn benefits the consumer.
In order for Wal-Mart to remain successful on a global level, being competitive is the key.
In order to maintain Wal-Mart value proposition, it must always be aware of bigger and
better ways to get things done.

RFID technology has risen to become a revolutionary element in supply chain
management. ( RFID Arena Guest, 2013) It is not just a replacement for barcodes. RFID
ensures that the right goods are available in the right place with no discrepancies and zero
errors. ( RFID Arena Guest, 2013) It makes the supply chain considerably more precise
and improves the efficiency and reliability of the entire chain. As real-time information is
made available also administration and planning processes can be significantly improved.
( RFID Arena Guest, 2013)

Wal-Mart installing RFID technology in its stores because it allows the retailer to better
collaborate with suppliers that need to monitor the flow of inventory and respond to
problems or spikes in demand. (Songini, 2007) Store personnel can better use the
technology to keep the shelves full of merchandise and reduce the number of products out
of stock at each store. When we set out on this journey, we really focused on the
collaborative benefits; we wanted what was going to drive sales for our suppliers and to
get product on the shelf, where it needs to be for our customers to buy. (Songini, 2007)


3


Next, Wal-Mart has used radio frequency identification tags (RFID), which use numerical
codes because it can be scanned from a distance to track pallets of merchandise moving
along the supply chain. (Blogger, 2013 ) As inventory must be handled by both Wal-Mart
and its suppliers, Wal-Mart has encouraged its suppliers to use RFID technology as well.
Even more recently, the company has begun using smart tags, read by a handheld
scanner, that allow employees to quickly learn which items need to be replaced so that
shelves are consistently stocked and inventory is closely watched. (Blogger, 2013 )

According to researchers at the University of Arkansas, there was a 16% reduction in out-
of-stocks since Wal-Mart introduced RFID technology into its supply chain. (Blogger, 2013
) The researchers also pointed out that the products using an electronic product code
were replenished three times as fast as items that only used bar code technology. This is
one of the reasons why Wal-Mart is concentration on its supply chain management
especially in RFID. (Blogger, 2013 )

In addition, Wal-Mart can also network its suppliers through computers. It entered into
collaboration with P&G for maintaining the inventory in its stores and built an automated
re-ordering system, which linked all computers between P&G factory through a satellite
communication system. P&G then delivered the item either to Wal-Mart distribution center
or directly to the concerned stores. (Blogger, 2013 )

Furthermore, Wal-Marts supply chain management strategy has provided the company
with several sustainable competitive advantages, including lower product costs, reduced
inventory carrying costs, improved in-store variety and selection, and highly competitive
pricing for the consumer. (Blogger, 2013 ) This strategy has helped Wal-Mart become a
dominant force in a competitive global market. As technology evolves, Wal-Mart continues
to focus on innovative processes and systems to improve its supply chain and achieve
greater efficiency. (Blogger, 2013 )

By utilizing RFID tags and readers, Wal-Marts products can be counted in seconds. This
is due to the fact that RFID tags can be automatically scanned without being in the line-of-

4


sight of an RFID scanner and multiple tags can be scanned simultaneously. (Blogger,
2013 ) For manufacturers this translates directly into cost reductions as labor intensive
tasks can be carried out faster and more accurately. (Blogger, 2013 )

In addition to faster authentication of produced goods, manufacturers can also benefit
from increased information gathered with the help of RFID technology. RFID tags can
store far more information than conventional barcode labels. (Blogger, 2013 ) This
information can be used to optimize production processes. Accurate knowledge of the
real-time movements of raw materials and the time needed for specific production steps
can be integrated into efficient production planning. (Blogger, 2013 )

With the help of RFID, manufacturers can also benefit from increased information in
regards to repair and maintenance of their machines and equipment. (Blogger, 2013 ) This
allows manufacturers to have visibility into valuable data such as: which machine has
been repaired or undergone maintenance and when has this been done? This information
helps to plan maintenance schedules. Hence, maintenance can become part of production
planning and help to prevent costly production breaks. RFID in manufacturing processes
means less manual work, less costs, improved visibility, improved planning. (Blogger,
2013 )

Implementation of RFID technology can also add advantages to distribution processes.
Usage of RFID will greatly accelerate the speed of delivery management, improve
efficiency, and increase accuracy in selection and distribution processes. It will also
reduce distribution costs. (Blogger, 2013 ) When products embedded with RFID tags enter
a distribution center, the RFID read-write equipment at the entry gate can register the
RFID tags, and send the information to the distribution centers' backend system. This
information can be used to put the cartons in proper places, sort them quickly and
efficiently, and dispatch the cartons to the retailing centers in less time with improved
accuracy. Usage of RFID also ensures accurate inventory control. (Blogger, 2013 )


5


RFID in distribution processes able to accelerate the speed of delivery improves
efficiency, increases accuracy, and reduces distribution costs. (Blogger, 2013 )
Over the last few years, more and more companies are integrating RFID technology into
their strategic planning, since it provides significant advantages to supply chain
performance. There are far more benefits gained by RFID implementation into supply
chain and logistics operations than just improving identification of products, shipments,
and assets. Nevertheless already the most common benefits prove that RFID is worth the
investment. (Blogger, 2013 )

One of the larger benefits why Wal-Mart is concentrating on RFID (and the EPC network)
is associated with a couple of issues that have been plaguing the retail and consumer
goods industries for decades. That is, theft and product counterfeiting. Theft, in the form of
shoplifting as well as larger scale theft occurring during transport and storage, is costing
retailers and suppliers billions of dollars each year. On top of that, product counterfeiting is
costing suppliers billions more. (Piasecki, 2012)

The costs of theft are not limited to the product loss alone. When theft is an ongoing
problem (as with shoplifting), planning systems are crippled because the inventory
numbers are always suspected. In addition, shortages created by theft often result in lost
sales because consumers cant buy what is not on the shelf. The obvious use of RFID
would be to have readers at the exits (as is currently used for higher priced products) to
catch shoplifters. But, even if you dont do that (or shoplifters find a way to disable the
chips) the ability to utilize a smart shelf or other in-store RFID reading technology to tell
you that the product is no longer on the shelf allows you to plan correctly and avoid the out
of stock condition (as well as the frequent physical inventory counts currently necessary).
(Piasecki, 2012)

The ability to quickly perform detailed reads of cargo as it moves through the supply chain
is another way RFID could help to prevent theft. This would allow you to more easily
narrow down the source of the theft (to a physical location). In addition, it would make it

6


much more difficult to sell the stolen product since it could be more easily identified (since
each product would have a unique ID). (Piasecki, 2012)

Similarly, counterfeit products would be easier to identify. If counterfeit products make
their way into a legitimate retailers inventory (as is sometimes the case) the EPC network
database would be able to identify them. In addition, all you would need is a portable
computer and an RFID reader, and you could walk down the aisles of a suspect retailer
and ID counterfeit or stolen merchandise. (Piasecki, 2012)























7


Q2: Wal-Mart mandates RFID tags from all its large suppliers. Why are some
suppliers not in compliance?

Radio Frequency Identification (RFID) refers to devices attached to objects that store data
and are able to transmit that data to an RFID receiver. (Piasecki, RFID Update: The
Basics, The Wal-Mart Mandate, EPC, Privacy Concerns, and More., 2012) These devices
can be large pieces of hardware the size of a small book, such as those attached to ocean
containers, or they can be very small devices inserted into a label on a package which is
commonly known as smart labels. (Piasecki, RFID Update: The Basics, The Wal-Mart
Mandate, EPC, Privacy Concerns, and More., 2012)
Some suppliers had difficulty modernizing their own operation to accommodate this. There
are several reasons why some suppliers are not in compliance with Wal-Marts RFID
policy. The first being that the use of RFID tags can raise privacy issues. If a product is
tagged with a RFID, consumers feel they can be traced after they purchase a product.
According to Gillette Vice President Dick Cantwell, at this point in time, the tag is useless
beyond the store shelf. There is no value and no harm in the tag outside the distribution
channel. There is no way it can be read or that (the) data would be at all meaningful to
anyone". (McCullagh, 2003)

At the time of this statement, it was believed that RFID tags were no threat unless the
process becomes widespread. RFID tags are now common in payment cards, retail stores,
transportation services and many retailers, Wal-Mart included. As well, there is a risk that
the consumers personal information can be compromised by combining RFID enhanced
drivers licenses with credit card data at the check-out. (Bustillo, 2010) In order to avoid
conflict with privacy issues, some of Wal-Marts suppliers opt out of installing RFID tags,





8


which results in a penalty imposed by Wal-Mart of $2 per pallet or case for untagged
merchandise.

One of the reasons why some suppliers are not in compliance with the mandate is due
solely to the cost of implementing RFID into their business. The cost depends on the
application, the size of the installation, the type of system and many other factors. Active
tags are at least $25 each and passive tags cost from 7 to 15 cents and can be more if the
tag is embedded with a thermal transfer label on which a bar code can be printed. In
addition to tag and reader costs, companies might need to purchase middleware to filter
RFID data. (Violino, 2014) They will likely need to hire a systems integrator and upgrade
enterprise applications, such as warehouse management systems. (Violino, 2014) They
might also need to upgrade networks within facilities. (Violino, 2014) And they will need to
pay for the installation of the readers. Not only do the readers need to be mounted, they
need electrical power and to be connected to a corporate network. All of these factors are
different for each deployment, depending on the application, the environment and so on.
Companies implementing RFID to comply with Wal-Mart's mandate spent approximately
$500,000 each. This amount is costly especially for small companies.

Based on the behavior of customers, the history or record of the production including the
delivering is not the most important thing. Most consumers care about the price, expiration
date, or packing of the goods. In other words, although the RFID can enhance the
management of logistic, to embed the RFID technology into current system also cost a lot.
(Millsap, 2012) For example, one RFID tag for paste once (non-reusable) may cost $0.8.
However, a bottle of water may also cost about $1. Most consumers would not to pay
almost twice payment to obtain the information which they do not care about. Comparing
with barcode or 417-barcode, the RFID tag costs more than barcode or 417-barcode
which can be printed by a printer. In other words, to identify an object via RFID tag costs
more than using barcode. (Millsap, 2012)

In addition to the RFID card, various styles of RFID tag may be required by different
consumer. According to the environment, the RFID tag may be designed to anti-water or

9


anti-wet. (Jian & Wu, 2013) Some RFID tags need to be applied to the metal environment
such as containers. Due to the characteristics of RFID, suitable frequency of RFID
corresponding to the environment should be selected carefully. In other words, the cost of
different RFID may be also different according to the applications and environment.
Furthermore, different shapes of RFID tag also costs. For example, the cost of an RFID
tag embedded into a 3D toy is much more expensive than that embedded in a plastic
card. (Jian & Wu, 2013)

Linked to costs, RFID systems require lots of time and man hours, as well as other
investments like capital. RFID is complicated and so time should be invested in initial
research, planning and the design stages. (UK RFID, 2014) This is all before sourcing a
supplier, partner or source of RFID hard, soft and middle ware. The key thing to manage
here is ROI (return on investment) which will justify investment and the allocation of
resources, to save on future resources, or to optimize these. This also, is ongoing and
hard to budget for or calculate prior to installation. (UK RFID, 2014)

Since RFID systems make use of the electromagnetic spectrum (like Wi-Fi networks or
cellphones), they are relatively easy to jam using energy at the right frequency. Hence,
RFID systems can be easily disrupted. (Technovelgy.com, 2014) Although this would only
be an inconvenience for consumers in stores (longer waits at the checkout), it could be
disastrous in other environments where RFID is increasingly used, like hospitals or in the
military in the field. Also, active RFID tags (those that use a battery to increase the range
of the system) can be repeatedly interrogated to wear the battery down, disrupting the
system. (Technovelgy.com, 2014)

Lack of demand from business customers has been one major reason. Since the
technology demands large initial investments, little incentives exist for organizations that
see no customer demand for RFID. Another challenge to RFID adoption is the lack of
worldwide tag standards. (Vijayaraman, Osyk, & Chavada, 2008) The standards for RFID
technology are still evolving. EPC global, a non-profit organization, is working with
member organizations to establish standards for tags. Retailers such as Wal-Mart are

10


requiring suppliers to use the EPC standards. In the packaging industry itself, a number of
operational and technical concerns have been raised regarding the limitation of RFID
systems. (Vijayaraman, Osyk, & Chavada, 2008)

A third reason for not complying with the mandate could be due to RFID signals may have
problems with some materials. Metals and liquids can cause problems when trying to read
RFID tags. (Piasecki, RFID Update: The Basics, The Wal-Mart Mandate, EPC, Privacy
Concerns, and More., 2012) Tag placement is becoming a science in and of itself since
depending on the product even a case-level RFID tag may have to be placed in a
specific location on the case and cases stacked in a specific orientation to get a consistent
read. When you get back to the mixed-pallet scenario, it is unclear whether or not you can
be assured that you have read all the tags on the pallet. (Piasecki, RFID Update: The
Basics, The Wal-Mart Mandate, EPC, Privacy Concerns, and More., 2012)

The final reason to take into account is RFID tags can fail. The unique issue with RFID
failure is the automated nature of RFID optimized processes. (Piasecki, RFID Update:
The Basics, The Wal-Mart Mandate, EPC, Privacy Concerns, and More., 2012) If you
have a pallet of materials with RFID tags and one of the RFID tags is damaged, how will
you know that you did not read all the tags? And, what happened to your system data
when this occurred. (Piasecki, RFID Update: The Basics, The Wal-Mart Mandate, EPC,
Privacy Concerns, and More., 2012)


Q3: Investigate the options for international customers on the Wal-Mart Web site.

As of January 2014, Wal-Mart has started the international store that operates 6,337
stores and 800,000 workers outside the United States. Wal-Mart wholly owned stores in
Argentina, Brazil, Canada, Japan, China and United Kingdom. (Wikipedia, 2014)


11




Figure 1: A map showing locations labelled in blue colour are Wal-Marts stores
around the world.
Many of Wal-Mart customers expect to have access to Wal-Mart product with low prices
anytime and anywhere. Wal-Mart global e-commerce has leads all the online and mobile
innovation for Wal-Mart. Based in California Silicon Valleys, Wal-Mart run the e-
commerce with operations in Bangalore, India and San Paolo, Brazil. (Wal-Mart, 2014)
Wal-Mart mission is to combine technology and world class retailing to provide seamless
that let their customer shop anytime using online mobile, social and stores. Wal-Mart has
united and expands their stores platform where no one else could do. (Wal-Mart, 2014)

Wal-Mart mostly focuses on promoting their stores through international outside United
States and Wal-Mart also known as largest retail stores in the world. Wal-Mart introduces
their company to other country where Wal-Mart expand their stores for other Wal-Mart
customers who want to buy products from Wal-Mart. (Wal-Mart, 2014)

One of Wal-Mart strategy to promote their stores is through online stores. Wal-Mart
introduces their company what they sell through online where customer can buy products
anytime and anywhere whether using computer or mobile. Each international Wal-Mart

12


website has their own strategy how to sell their product, use their own method how to
deliver the products and payment for each of product purchases. (Wal-Mart, 2014)

Wal-Mart international sell the products where each of their products divided into several
parts according to the product department starting from grocery, clothes, automotive,
health, furniture and more. (Wal-Mart, 2014) The procedure is same as when customer
when to shop at Wal-Mart stores. Just with one click, Wal-Mart customer can buy product
they require in Wal-Mart website, proceed with the payments and the product been
purchase will be delivered to the address acquire. Picture below is one of Wal-Mart
website in Canada that shows how they arranged their product by each section and
alphabetically. (Wal-Mart, 2014)

Each Wal-Mart international product arrangement is the same as Wal-Mart U.S. except for
Wal-Mart in China where they did not show any product sold in their website. Wal-Mart
China website only shows that information about their company and promotions that
available in their stores. Thus, customers who want to buy things in Wal-Mart can only go
to their stores and Wal-Mart does not have any online product purchasing in China. (Wal-
MartChina)


13




Figure 2: Red arrow shows that each product separated by department and uses.

Each international Wal-Mart website only accepts a credit card payment transaction for
each of their product purchase by customer. Credit card use for payment transaction
includes MasterCard, Visa, Solo or American Express, Maestro, PayPal, Delta and Visa
Electron. (ASDA, 2014) Wal-Mart also introduces their company card called Wal-Mart
Rewards MasterCard and ASDA MasterCard. This card functions as credit card where
customer can use this card to purchase their product in the Wal-Mart website. One of the
examples is Wal-Mart in U.K., where Wal-Mart U.K. is called ASDA Direct and they
introduce ASDA MasterCard in their stores. Wal-Mart U.K. also allows customer to use
PayPal for purchasing their product. (ASDA, 2014)

A PayPal personal account is electronic commerce (e-commerce) where facilitates
payments between parties through online fund transfers. PayPal allows their customers to
establish on its website which is connected to a users credit card or checking card.
(Investopedia, 2014)


14




Figure 3: PayPal as one of customer option to purchase items in Wal-Mart website.

As for shipping their product, Wal-Mart uses standard shipping such as using their own
courier vehicles to delivered customer purchase product and also uses other courier
service. Wal-Mart also has an option for their customer where customers can pick up their
own purchase item. During the checkout process to purchase the item, Wal-Mart customer
can use whether they want to ship their purchase product to their home address or if the
purchase item is qualify to pick up, they can choose to pick up their item at nearest post
location. (Wal-MartCanada, 2014)

Wal-Mart shipping mission is to get their customer satisfies with the delivery and deliver
customer purchase product quickly. Customers orders are shipped based on size, service
level selected and geographic location. Wal-Mart offer two shipping option for their
customer: standard shipping and express shipping. Standard shipping will takes 2 to 8
days business days to be delivered plus processing time and express shipping take 1 to 8

15


days include processing time. As for the larger items, Wal-Mart use freight shipping that
takes 3 to 8 days includes processing time. (Wal-MartCanada, 2014)



Figure 4: Wal-Marts courier service.
Wal-Mart international only located in certain country where their product only can deliver
in certain places that nearest to their stores or nearest location that near the country that
has Wal-Mart stores. One of the examples is Wal-Mart in Canada where they ships their
product only in Canada. (Wal-MartCanada, 2014)

In conclusion, Wal-Mart has the biggest impact in their international website stores using
the Global e-commerce and it makes each of their customers easy to buy their product
using online stores anytime and anywhere. Wal-Mart also has made their company known
to the world and Wal-Mart made their customer to set Wal-Mart number one choice to
purchase product.


Q4: Compare walmart.com with target.com, costco.com, kmart.com, and other
direct competitors. Write a report.

16




Wal-Mart Target Costco Kmart
Information
of Company
Availability
Easy in
accessing
Story, History,
Global
Responsibility
and Investing
are listed in
full detail.
Moderate in
accessing
Responsibility
Section,
Chairman and
CEO Personal
Infos, and Stock
infos are
available.
Unable to be
found
Unable to be
found
Payment
Type
Wal-Mart
Credit Card,
PayPal,
Payment
Debit Card
The RED Card,
PayPal,
Payment Debit
Card
Costco Cash
Card, PayPal,
Payment Debit
Card
MoneyHub,
PayPal, Sears
Credit Card,
Payment Debit
Card, WU Pay
Membership
Card
Wal-Mart
Credit Card
The RED Card
Costco Cash
Card
MyKmart Card
Logistics
Service
Free delivery
and pick up
services

Pick up for free.
Free delivery for
orders $50+
Depending on
products. Free
pick up service
is available
Depending on
products. Free
pick up service
is available
Social
Networking
Access
Icons to
access
Facebook,
Google+,
Pinterest,
Twitter,
YouTube
Icons to access

Facebook,
Twitter,
Instagram,
Pinterest,
YouTube,
Google+
Icon to access
Facebook
None

17


Customer
Help
Services
- Help Centre
- Order
Tracker
- Associate
Discount
- Privacy &
Security
- California
Privacy Rights
- Contact via
email or
phone call
- Accessibility
- Track an order
- Store pickup
- Shipping
information
- Size charts
- Contact via
email or phone
call
- Membership
Orders
- Information
- Product
- Information
- Shipping
- Contact via
website or
phone call
- Order Status
- Availability to
contact via main
website or by
phone call
After Sales
Services
- Returns
Policy
- Item Return
- Product
Recalls
- Feedback

-Return an item
- Product recalls

- Returns
- Refunds
- Replacements

- Returns &
Exchanges
- Feedback
Supply
Chain
Management
RFID, with
concept of
cross
docking, fast
turnover
RFID, NTE,
Transportation
management
system (TMS),
Less-than-
truckload (LTL)
Disintermediatio
n, Vendor
managed
inventory, cross
docking,
RFID, Late
recognition of
cross docking,
slow turnover
Career
Availability
Available

Available

Available Available
Order Return
Policy
Easy in
Accessing
Returned
within 90 days
Easy in
Accessing As
stated in receipt,
online return is
Easy in
Accessing
Either to return
to nearest store
Easy in
Accessing
Different
product with

18


available. or via online different
conditions
Privacy and
Security
Yes Norton
Secured
Verification
Yes Norton
Secured
Verification
Yes Norton
Secured
Verification
Yes Norton
Secured
Verification

Table 1: A comparison table of Wal-Mart website, walmart.com and its major
competitors, target.com, costco.com, and kmart.com.

Wal-Mart is the main dominator among the retailing industry in terms of its sales revenue,
its customer base, and its ability to drive down the costs and delivering good values to
their customers. Inventory management is most known at Wal-Mart with its just-in-time
techniques that made the firm to known as one of the best supply chains in the world.
Wal-Mart not only transformed its own supply chain, it has also influenced other vendors
now throughout the world because the company has the economic clout to request
changes from its vendor partners and to receive them. Recognized for its ability to obtain
merchandises from global sources, Wal-Mart is also known as a pioneer at the strategy of
achieving high levels of growth and profitability through its precision control of
manufacturing, inventory, and distribution. Invalid source specified.

Its information systems is so efficient that is can analyse more than 10 million daily
transactions from point-of-sale data on a massive scale and distribute their analysis in real
time both internally to its managers and externally to Wal-Marts suppliers. Wal-Mart has
pioneered many innovations in the purchase and distribution processes of the products it
sells. Over 20 years ago, Wal-Mart has implemented UPC bar codes throughout the retail
industries and also implemented the use of electronic data interchange (EDI) for
computerized ordering from vendors. Invalid source specified.


19


Wal-Mart developed the concept of cross docking, which direct transfers from inbound or
outbound truck trailers without having overload or extra storage in real time. The
companys truck fleet and corps of non-unionized drivers continuously deliver goods to
distribution centers, where they are stored, repackaged and distributed without needing to
worry rotting in inventory. Through the use of cross-docking, which is one of its best-
known innovations, half the goods trucked to a distribution centre from suppliers ship to
stores only needed within 24 hours. The other half, called pull stock, is stored at the
distribution centre until needed at stores. Invalid source specified.

The differences between these websites are similar, what differentiates them are the
supply chain system that they are using. For Wal-Mart, it increases the speed of
merchandise from its distribution centres to its warehouses. Today the retail giant
continues to push the supply chain toward the greater and greater efficiency, prioritizing
customer needs while employing new technologies and greener way practices. One of the
early adopters of RFID technology to increase efficiency in its supply chain, Wal-Mart
discovered the value of balancing vision with technology maturity levels after mandating
its suppliers apply RFID tags to crates and pallets bound for its stores. Invalid source
specified.

Some companies thrived using the new technology of RFID. Others, including Wal-Mart
itself, ran into trouble. At the time of the mandate, RFID technology was in its infancy, and
costs for planning, hardware, software, and training were prohibitive for most suppliers.
The technology was so new that the industry lacked best practices for implementation.
Indeed, it lacked any examples that might help newcomers avoid pitfalls. Wal-Mart
repealed its edict, but continues to probe the usefulness of the technology of RFID.
Invalid source specified.

Costco on the other hand uses vender managed inventory. They use "ConnectionHub's
Drop-Ship Master application suite", which allows them to rapidly integrate new suppliers
into their existing system. This enables rapid orders based on Costco requirements. This
allows Costco to maintain efficient supply chain management without taking on any new

20


inventory or risk through orders. ConnectionHub provides Costco with a single point of
integration in which it can contact and interact with its suppliers directly and with ease.
Invalid source specified.

While Wal-Mart very early on focused on controlling costs by mastering its supply chain in
innovative ways that included sophisticated, pioneering use of product, consumer
behaviour, and sales performance tracking technology, Kmart was late to recognize that
such technology could be useful, and never really bought totally into the concept. As a
consequence, Kmart in the old days and today too often stocks higher-margin, but
higher-priced and slower-moving goods than either Wal-Mart or its other big rival, Target.
Thus, its inventories dont turn over nearly as fast and it produces significantly less
revenue per square-foot of store space. That, in turn, leads to weaker cash flows, less
growth, less investment in existing facilities and technology, higher operating costs, steady
erosion of brand value and, ultimately weak, or no profits. Invalid source specified.

Target Corporations manufactures, suppliers and vendors all abide by strict rules and
regulations set forth by Target. If Target were to lift some of the unnecessary policies and
regulations they could potentially gain more clients. Although Targets supply chain is very
efficient opening new doors to new prospects is always a step in the right direction. This
negative aspect of being too strict could be withholding Target from reaching its true
potential. Target Corporation is huge, from the first level of the supply chain down to the
third level. The supply chain at Target consists of numerous distribution centers and
import warehouses. It may be too complex. Invalid source specified.

Wal-Mart is consolidating its global sourcing. The new model focuses on increasing the
percentage of products purchased directly from suppliers and buying from global
merchandising centres rather than through individual countries. Third-party procurement
providers, who previously enjoyed a substantial business from the retail giant, will find
themselves increasingly bypassed in the supply chain. In addition to eliminating the cost of
a middleman, this effort may give Wal-Mart increased control over inbound freight. Better
control, in turn, can lower inventory costs. Thus Wal-Marts continuous use of innovations

21


leads to lower inventory and operating costs, which enables Wal-Mart to keep its lean
costs. Invalid source specified.

Other than its supply chain management system, its customer help services, privacy and
security, logistics services, payment type and after sales services are all closely similar.
For logistics, pick up is free for all, delivery is however different as only Wal-Mart provides
free delivery without taking prices or products into account. However, Wal-Mart offers
more information about themselves in their website more than the following competitors,
which are mainly the history behind Wal-Mart over the years. In overall, most of the
services of customer help and after-sales are mostly similar between the markets. Wal-
Marts main competitor can be confirmed to be Target, as Costco and Kmart is however
not as advanced as the level of Wal-Mart just yet.


Q5: Envision how transaction processing systems (TPSs) are used in Wal-Mart
stores. Go to Wal-Mart and pay with a check. How has EC improved the old way of
paying with checks?
Transaction processing systems are important example of operations support systems that
record and process data resulting from business transactions. (University of Nairobi, 2013)
They process transactions in two basic ways. In batch processing, transactions data are accu-
mulated over a period of time and processed periodically. (University of Nairobi, 2013) In
real-time (or online) processing, data are processed immediately after a transaction occurs.
Examples: sales and inventory processing and accounting systems. (University of Nairobi,
2013)

Every organization has many transaction processing systems (TPS). These systems
include order processing, inventory control, payroll, accounts payable, accounts
receivable, and the general ledger, to name just a few. (University of Nairobi, 2013) The
input to these systems includes basic business transactions, such as a customer placing
an order, an employee purchasing supplies, a customer payment, an employee signing on

22


and off at the start and end of a day. (University of Nairobi, 2013) The processing activities
include data collection, data editing, data correction, data manipulation, data storage, and
document production. (University of Nairobi, 2013) The result of processing business
transactions is that the organization's records are updated to reflect the status of the
operation at the time of the last processed transaction. (University of Nairobi, 2013) A TPS
also collects data which is input to other essential information systems - management
information systems, decision support systems, and other special-purpose information
system. (University of Nairobi, 2013) A transaction processing system serves as the
foundation for these other systems. (University of Nairobi, 2013) These higher-level
systems require the basic business transaction data captured by the TPS. (University of
Nairobi, 2013) Transaction processing systems support routine operations in the business.
The amount of support for decision making that a TPS directly provides managers and
workers is low. (University of Nairobi, 2013)

This information system ordinarily automates routine and repetitive tasks that are very
important to the operation of the Wal-Mart such as Point-of-Sale, preparing a
payroll, billing customers. (MISgroup, 2012) The input of TPS is raw data, the processing
involves with the summarizing, recording, and merging the data and the output is in the
form of report. (MISgroup, 2012) One example of TPS is Point-of-Sale when you check-
out the product at the supermarket, the cashier has to scan the product with the bar
code that the input of system; The idea of bar code scanning required that industry
develop a universal product code (UPC) system, a could be a standard method for
identifying products with numbers and coding those numbers as the type of bar code
shown in the photo. (MISgroup, 2012) Point-of-sale terminals record the bar code of each
item passing the checkout counter and send a purchase transaction directly to a central
computer at Wal-Mart headquarters. (MISgroup, 2012) And it had many benefits found out
by Wal-Mart, and they are ensuring accurate pricing, improving efficiency, reducing
Shrinkage and improving communications. (MISgroup, 2012)
The use of bar code scanners made it easier were its unnecessary to put a price on
every item (but still important for consumer protection).This reduced costs so much.

23


The process involve with the calculating number of product multiple with the price
of product and the output is in the form of receipt. (MISgroup, 2012)
As technology advanced so did the transaction processing speed, reliability, and security.
With the introduction of debit cards, money could be transferred instantly to Wal-Marts
account and this creates instant cash flow and decreased losses. To decrease the
transaction processing time, Wal-Mart recently introduced self-serve checkout stations.
These stations allow the consumer to process their own transaction by electronically
scanning the bar code on their products and after completing the scanning they would
select their form of payment and pay. This eliminates the need for additional staff thus
reducing costs.
Wal-Mart accepts personal checks as long as its check verification machine accepts the
check and valid identification is presented. (Ask.com, 2014) The check verification
process makes sure there are sufficient funds in the account to cover the amount of the
check. The machine prints the name of the store as the payee and the amount, you sign
the check, and in seconds the check is validated, your bank account is debited, and you
are out of the store with your merchandise. Besides that, Photo identification, such as a
driver's license, is required to pay with a personal check. (Ask.com, 2014)
The machine that Wal-Mart uses is The TeleCheck Electronic Check Acceptance
(ECA). It provides service to convert a paper check into an electronic item at the point of
sale. (TeleCheck, 2014) The ECA service allows retailers to accept checks as quickly,
safely and easily as they accept credit cards. Think of it as a check without the paper. Its
process will be explained as below. (TeleCheck, 2014)
When you present your check to the sales clerk, your check is authorized through a
specially-designed, secure TeleCheck system that captures banking information and the
amount of the check. (TeleCheck, 2014) Once the check is approved, you'll receive a
receipt of the electronic transaction to sign. (TeleCheck, 2014) When you sign the receipt,
you will receive a copy for your records along with your check to keep. It's that simple.
(TeleCheck, 2014)

24


TeleCheck sees a lot of checks, and the data TeleCheck derives from these checks
provides tremendous analytical opportunity to fight fraud. One of the methods is Debt
verification. (TeleCheck, 2014) TeleCheck maintains a live database comprised of check
and bank account debt records reported by hundreds of thousands of merchants.
(TeleCheck, 2014) TeleCheck can verify the presence or lack of unpaid debt related to a
check writer in response to subscribing merchants queries and provide check acceptance
decisions based on what it finds. (TeleCheck, 2014)
Another method is Risk-based decisioning. TeleCheck has also examined historical check
data and identified patterns by analyzing and comparing the characteristics of valid check
transactions vs. invalid (fraudulent) check transactions. (TeleCheck, 2014) From the
knowledge it has gathered, TeleCheck has built statistical profiles of what a solid check
transaction looks like and what a fraudulent one may look like, too. (TeleCheck, 2014)
Using these analytical profiles as backdrops, TeleCheck can also provide predictive risk
decisioning to its merchants to augment its base line debt verification services.
(TeleCheck, 2014)
Together, check verification and risk-based decisioning work as invaluable weapons to
combat commercial losses associated with check fraud. (TeleCheck, 2014) For merchants,
risk decisioning helps control and reduce financial loss. (TeleCheck, 2014) Merchants can
accept checks with greater confidence that the checks are reliable. (TeleCheck, 2014)
TeleCheck alerts consumers as well as merchants to fraud -- a TeleCheck acceptance
decision is often the first warning a consumer receives of their accounts compromise.
(TeleCheck, 2014) TeleCheck provides consumer convenience, as risk decisioning lets
merchants continue to offer check writing as a payment option. And, above all, risk
decisioning results in lower prices for consumers because the merchant has been able to
reduce losses areas associated with check fraud. (TeleCheck, 2014)
When a consumer writes a check to a TeleCheck subscribing merchant, the merchant first
submits the check to TeleCheck for analysis before accepting it. (TeleCheck, 2014) The
merchant does this by either manually or electronically feeding the checks MICR
information and often the check writers ID number to TeleCheck. (TeleCheck, 2014)

25


When TeleCheck receives these pieces of identifying data, it first looks for matches of
the identifying data within its database of transactions, reviewing for evidence of unpaid
check or account debt on checking accounts known to be held or used by that check
writer. (TeleCheck, 2014) Then, TeleCheck analyzes the transaction against one of its
many risk models. The model looks for fraudulent characteristics and good
characteristics and provides risk decisioning accordingly If the transaction is above the
applicable threshold of acceptable risk, TeleCheck will flag it and issue a single-digit code
a 3 -- back to the merchant. (TeleCheck, 2014) This Code does not tell the merchant
the check is not good or that the customer does not have enough money in their account
to cover the check. This Code 3 is telling the merchant that the transaction contains a
significant level of risk markers. (TeleCheck, 2014)
These models are very effective in reducing fraud-- but they are only predictive, based on
information obtained at the point-of-sale and historical data. (TeleCheck, 2014) They
cannot predict with 100% accuracy which check transactions will complete or return.
However, through this predictive risk decisioning, TeleCheck aids retailers in saving
billions of dollars that might otherwise be lost to fraudulent activity -- the kind of financial
loss that is rarely recouped. Signing the ECA receipt is similar to signing a credit card slip.
(TeleCheck, 2014) Signature on the receipt authorizes TeleCheck to present the check to
the bank electronically and deposit the funds into the business account. (TeleCheck, 2014)
An ECA transaction takes the same amount of time to be presented to the bank as a
paper check, usually within one to two business days. (TeleCheck, 2014) The ECA
transaction appears on the bank statement in the same area as ATM transactions and
direct deposit payroll checks. (TeleCheck, 2014) The transaction will reflect the date the
check cleared the account, the check number, the amount and the place where the check
was presented. (TeleCheck, 2014)
Not only does Wal-Mart accept personal checks to pay for purchases, it also provides
cash back. (Ask.com, 2014) If a check is written for an amount higher than the amount of
the purchase, the cashier gives the customer cash back after verifying the validity of the

26


check. Wal-Mart also accepts cash, all major credit cards and the Wal-Mart line of credit.
(Ask.com, 2014)

Electronic commerce (EC) has improved the transaction process at Wal-Mart in many
different ways. The traditional transaction process for many years included cash, check,
credit card, or money order. Up to approximately 8 years ago in Canada it was common
for customers to pay by check. The process of paying by check was time consuming as
each check had to have management authorization. This process was streamlined in later
years inputting a few commands through the computer a store clerk is able to approve
checks directly at the till. Keep in mind that a drivers license and credit card information is
still needed in order to authenticate the check which still required time. It was also
customary for a business to wait for up to a week for personal checks to clear processing
and there was always a risk of the customer's checks being returned for insufficient funds.
If only 0.005% of the $400 billion revenue were paid with dishonored checks this would
equate to a $20 million dollar loss for Wal-Mart.
Therefore, Electronic commerce (EC) has improved the way of paying check. It gives the
opportunity for increased efficiency, reduced risk and higher productivity, all of which
eventually benefit youthe consumer.
The level of transaction speed becomes higher. The transaction speed of a payment can
be very fast using DCPS. (Wiki, 2014) The main reason is that there is no need to go
physically the bank or saving bank to initiate a payment transaction. (Wiki, 2014) Only an
electronical device with an accordant software or app is needed. In the case of Wal-Mart,
only ID and photo identification and a machine is needed to process the check. (Wiki,
2014)
Besides that, EC also improve the processing efficiency to a higher level. There is a high
level of processing efficiency due to a high level of automatication. (Wiki, 2014) A high
level of automatication caused higher speed and lower cost in comparison to mature non
electronical payment systems. (Wiki, 2014)

27


Other improvements made are it has the ability to conduct bank transactions, yet are safe
enough to use on the Internet, and fraud losses for all parties are reduced.
As a conclusion, with Wal-Marts heavy investment into their supply chain RFID system
they are able to track their large quantities of inventory in a timelier basis and this in turn
gave suppliers a real-time update on stock levels required. By streamlining their e-
commerce payment system, by using debit, credit, cash or check gives Wal-Mart instant
access to cash flow and reduces wait times and errors at the check-out. With Wal-Mart
being pioneers and leaders in the industry it will be exciting to see what new and
innovative ideas they will come up with next.













28


Bibliography

Asokan, G. (2012, November 3). Costco Supply Chain Study. Retrieved October 6, 2014,
from SlideShare: http://www.slideshare.net/GaneshAsokan/cost-co-a-supply-chain-
study

(n.d.). Retrieved from How Walmart Uses E-Commerce in Its Supply Chain:
http://www.termpaperwarehouse.com/essay-on/How-Walmart-Uses-E-Commerce-
In-Its/153482

RFID Arena Guest. (2013, November 14). Benefits of implementing RFID in Supply Chain
Management. Retrieved October 9, 2014, from RFID Arena:
http://www.rfidarena.com/2013/11/14/benefits-of-implementing-rfid-in-supply-chain-
management.aspx

RFID News: Will WalMart get RFID Right this Time? (2010 , July 28). Retrieved from
scdigest: http://www.scdigest.com/assets/On_Target/10-07-28-1.php?cid=3609
Wal-Mart. (2014). Retrieved from http://corporate.walmart.com/our-story/our-
business/global-ecommerce.

Wikipedia. (2014). Retrieved from http://en.wikipedia.org/wiki/Walmart.

ASDA. (2014). ASDAdirect. Retrieved October 12, 2014, from ASDA:
http://direct.asda.com/M116_EDITORIAL_CONTENT_PAYMENT_OPTIONS/M116
_EDITORIAL_CONTENT_PAYMENT_OPTIONS,default,pg.html

Ask.com. (2014). Does Walmart accept personal checks? Retrieved October 5, 2014,
from Ask.com: http://www.ask.com/business-finance/walmart-accept-personal-
checks-11995a09a23feaa6#

B. S. Vijayaraman (1), B. A. (n.d.). An Exploratory Study of RFID Adoption in the
Paperboard Packaging Industry. Retrieved from scielo:
http://www.scielo.cl/scielo.php?pid=S0718-27242008000200008&script=sci_arttext

Blogger, R. A. (2013 , November 14). Benefits of implementing RFID in Supply Chain
Management. Retrieved from RFID Arena:
http://www.rfidarena.com/2013/11/14/benefits-of-implementing-rfid-in-supply-chain-
management.aspx

Bustillo, M. (2010, July 23). Wal-Mart Radio Tags to Track Clothing. Retrieved October 4,
2014, from The Wall Street Journal:
http://online.wsj.com/article/SB10001424052748704421304575383213061198090.
html?mod=WSJ_hpp_LEFTTopStories

Chunlin Du, Y. F. (2012, December 18). Supply Chain Analysis Project Target
Corporation. Retrieved October 6, 2014, from

29


https://www.google.com.my/url?sa=t&rct=j&q=&esrc=s&source=web&cd=11&cad=r
ja&uact=8&sqi=2&ved=0CFMQFjAK&url=http%3A%2F%2Ftannerbflatness.com%2
Fwp-
content%2Fuploads%2F2014%2F03%2FSupplyChainAnalysisProjectTargetCorpor
ation.docx&ei=pv40VLCGN8aeugTs8oCgBg&usg

Dhruv Grewal, M. L. (2013, Jan 12). WalMart Pioneer in Supply Chain. Retrieved 10 6,
2014, from Inkling: https://www.inkling.com/read/marketing-dhruv-grewal-michael-
levy-3rd/chapter-15/walmart-pioneer-in-supply-chain

How Walmart Uses E-Commerce in Its Supply Chain. (n.d.). Retrieved from
termpaperwarehouse: http://www.termpaperwarehouse.com/essay-on/How-
Walmart-Uses-E-Commerce-In-Its/153482

Investopedia. (2014). PayPal. Retrieved October 10, 2014, from
www.investopedia.com/terms/p/paypal.asp:
www.investopedia.com/terms/p/paypal.asp

Jian, M.-S., & Wu, J.-S. (2013, June 5). RFID Applications and Challenges. Retrieved
October 12, 2014, from INTECH: http://www.intechopen.com/books/radio-
frequency-identification-from-system-to-applications/rfid-applications-and-
challenges

Lu, C. (2014, May 7). Incredibly Successful Supply Chain Management: How Does
Walmart Do It? Retrieved from tradegecko: http://blog.tradegecko.com/incredibly-
successful-supply-chain-management-walmart/

McCullagh, D. (2003, january 13). Perspective: RFID tags: Big Brother in small packages.
Retrieved October 5, 2014, from CNET: http://news.cnet.com/2100-1069_3-
980325.html

Millsap, D. (2012). WAL-MART'S USE OF RFID IN GLOBAL SUPPLY CHAIN
MANAGEMENT. Retrieved October 12, 2014, from Daniel Millsap :
http://www.danielmillsap.com/research/rfid-in-wal-mart-global-supply-chain-
management.html

MISgroup. (2012). Information Systems: Information systems used in Wal-Mart. Retrieved
October 11, 2014, from Blogger: http://wal-m.blogspot.com/p/information-
systems.html

Piasecki, D. (2012). RFID Update: The Basics, The Wal-Mart Mandate, EPC, Privacy
Concerns, and More. Retrieved October 4, 2014, from InventoryOps.com :
http://www.inventoryops.com/RFIDupdate.htm


30


Piasecki, D. (n.d.). RFID Update: The Basics, The Wal-Mart Mandate, EPC, Privacy
Concerns, and More. Retrieved from inventoryops:
http://www.inventoryops.com/RFIDupdate.htm

RFID Technology Boosts Walmarts Supply Chain Management. (n.d.). Retrieved from
usanfranonline.: http://www.usanfranonline.com/resources/supply-chain-
management/rfid-technology-boosts-walmarts-supply-chain-
management/#.VDlPcVfyajc

Sanford, R. (2013, December 30). App Tricity. Retrieved October 6, 2014, from Kmart vs
Wal-Mart A Study in Supply Chain Approaches: http://www.apptricity.com/kmart-vs-
wal-mart-a-study-in-supply-chain-approaches/

Songini, M. L. (2007, Feb 26). Wal-Mart Shifts RFID Plans. Retrieved from computerworld:
http://www.computerworld.com/article/2553166/mobile-wireless/wal-mart-shifts-rfid-
plans.html

Technovelgy. (2014). Problems With RFID. Retrieved October 11, 2014, from
technovelgy: http://www.technovelgy.com/ct/Technology-Article.asp?ArtNum=20

Technovelgy.com. (2014). Problems With RFID. Retrieved October 12, 2014, from
Technovelgy.com: http://www.technovelgy.com/ct/Technology-
Article.asp?ArtNum=20

TeleCheck. (2014). How TeleCheck Works. Retrieved October 11, 2014, from FIRST
DATA: http://www.firstdata.com/telecheck/telecheck-works.htm

TermPaper Warehouse. (2013, April). How Walmart Uses E-Commerce in Its Supply
Chain. Retrieved October 9, 2014, from TermPaper Warehouse: How Walmart
Uses E-Commerce in Its Supply Chain

Traub, T. (2012, July 2). Arkansas Business. Retrieved October 6, 2014, from Wal-mart
Used Technology to Become Supply Chain Leader:
http://www.arkansasbusiness.com/article/85508/wal-mart-used-technology-to-
become-supply-chain-leader?page=all

UK RFID. (2014). RFID DISADVANTAGES. Retrieved October 12, 2014, from UK RFID:
http://ukrfid.innoware.co.uk/business_of_RFID/rfid_disadvantages

University of Nairobi. (2013, April 30). Index of /courses/DIS511/document. Retrieved
October 12, 2014, from Multimedia Portal University of Nairobi:
https://learning.uonbi.ac.ke/courses/DIS511/document/DIS511_JAN-
APRIL_2013_INFORMATION_SYSTEMS.doc

Vijayaraman, B. S., Osyk, B. A., & Chavada, D. (2008). An Exploratory Study of RFID
Adoption in the Paperboard Packaging Industry. Retrieved October 11, 2014, from

31


Scielo: http://www.scielo.cl/scielo.php?pid=S0718-
27242008000200008&script=sci_arttext

Violino, B. (2014). RFID System Components and Costs. Retrieved October 5, 2014, from
RFID Journal: http://www.rfidjournal.com/articles/view?1336/2

Walmart. (n.d.). Retrieved from
http://help.walmart.com/app/answers/detail/a_id/7/~/international-customers.

Wal-MartCanada. (2014). How can we help? Retrieved October 10, 2014, from Wal-
MartCanada: http://www.walmart.ca/en/help/

Wal-MartChina. (n.d.). Retrieved from http://www.wal-martchina.com/english/.

WAL-MART'S USE OF RFID IN GLOBAL SUPPLY CHAIN MANAGEMENT. (n.d.).
Retrieved from danielmillsap: http://www.danielmillsap.com/research/rfid-in-wal-
mart-global-supply-chain-management.html

Wiki, E.-C. (2014). Digital Checking Payment Systems. Retrieved October 12, 2014, from
E-Commerce Wiki:
http://en.ecommercewiki.info/payment/electronic_options/digital_checking_payment
_systems

Wu, M.-S. J.-S. (n.d.). RFID Applications and Challenges. Retrieved from intechopen:
http://www.intechopen.com/books/radio-frequency-identification-from-system-to-
applications/rfid-applications-and-challenges