class： F201102 The autumn term of 2021

Course paper of
《Management Information System》

Title：Management information system and its uses in Walmart

Student ID： F20110208
Name： MD SHAFEQUL ISLAM
Teacher： Zhai Danni

Score：

Overseas Education College, NUPT

2021.11.04

Management information system and its uses in Walmart

A management information system (MIS) is a system or process that delivers information

needed to efficiently manage businesses. It provides business managers with the data they
need to make decisions. Early business computers were used for simple activities with
minimal detail or structure, such as tracking inventory, billing, sales, or payroll data, but
modern techniques such as ERP, EPM, SCM, and SAP have since replaced them.
Management information systems differ from normal information systems in that they are
used to evaluate other information systems that are employed in the organization's operational
activities. The ultimate purpose of using a management information system in a corporate
setting is to raise the company's value and profitability. This is accomplished by giving
managers with timely and relevant information, allowing them to make more effective
decisions in less time.

Managers of business departments that use information systems should be familiar with the
basics of information technology, data analytics, and business intelligence technologies. All of
these skills are used in management information systems in a way that is customized to
managerial and executive decision-making. Managers can also benefit from information
systems tailored to certain business operations that affect their department or role. Managers
rely on marketing information systems, product subsystems, sales forecasting, and product
design systems to generate data.

A great example for use of Management information system or MIS in business is Walmart,
It is one of the most successful companies in the world because of it’s adaptability of
technology into its day to day business and long term business strategy. Walmart continues to
advance the way it uses data and content through synchronization. This ensures data is
accurate, consistent, and accessible—facilitating product point discovery for customers and
manufacturers and stakeholders. This integration allows Walmart to spend less time and
resources hunting down accurate product data and more time catering to the customer
experience. And an efficient supply chain that reduces shipping and operational costs unlocks
new business profits—on and offline. We will discuss how Walmart uses MIS to make
decisions and operate their business below. We will also discuss about DSS, GIS, or
artificial intelligence technology uses at Walmart.

Sam Walton, an ARKANASAS businessman, began his professional career in the retail
industry on June 3, 1940. He opened the first Walmart cheap city shop in ARKANASAS on
July 2, 1962. But Walmart generated revenues of about 141.67 billion U.S. dollars in the
fourth quarter of 2020. Currently, Walmart is one of the most technologically advanced
companies in the world, and one of the reasons for this is the availability of accurate and up-
to-date data, which serves as the foundation for its market expansion. And, in order to collect
accurate information on time, management must review the data on a regular basis, which is
only achievable with an integrated management system. Walmart was one of the first retail
corporations to implement modern Management information system in their business.
The main strategy Walmart uses to remain cost-competitive is cost leadership, which means
they offer products at lower prices than their competitors. They keep their prices low to
attract more customers and maintain a favorable market position. Despite its large size and
dominant market share, one of the challenges Walmart faces is maintaining this position while
still delivering good customer service and keeping costs low enough to turn a profit. In order
to do that they uses MIS to maintain a very good decision making process to minimize their
cost and increasing their revenue.

Walmart reported a net profit of $15.4 billion on $422 billion in revenue for the fiscal year
ending January 31, 2011, with a gross profit margin of 24.7 percent. International operations
accounted for $109.2 billion in sales, or 26.1 percent of overall revenue. According to the
Forbes Global 2000 ranking, it is the world's 18th largest public corporation and the largest
public corporation by revenue. Every year, Walmart hires approximately 10,000 new
employees, with 300 new staff hired for each store opening. Their sales are their primary
source of income, and the majority of their expenses are spent on new shop construction and
personnel salaries.

Walmart has what is regarded as the most advanced distribution system in the retail industry,
named Retail Link. This system links each store to headquarters and over 2,000 suppliers,
ensuring that they never run out of goods or have too much. Wal-Mart rotates its inventory
faster than any other retailer. Supplying their international outlets is currently a concern,
especially since this is an area where they are focusing on expansion. Wal-Mart has formed a
Customs Brokering division to handle its global procurement in order to become more
effective internationally. This saves them money on brokering and freight forwarding fees
while also giving them greater control. They've also begun to "demand" that their suppliers be
physically based in the nations where Wal-Mart will be able to best serve them.

Walmart is a bulk purchaser who uses a centralized purchasing method, which means the
corporation buys goods directly from producers, bypassing any brokers and middlemen. This
is necessary in order to cut costs and provide the best pricing. They will first identify a
potential supplier, and then, after gathering quotes from everyone, they will make their
decision based on the cost structure of the offer. To successfully manage this information,
Walmart employs the EDI model (electronic data interchange), which is essentially a
computer-based system in which suppliers and vendors' computers are linked to Walmart's.
EDI allows suppliers to download purchase orders as well as store-to-store sales data for their
products, such as the number of units sold and the number of units received. As soon as the
supplier received information regarding product sales, the supplier dispatched the appropriate
goods to various Walmart distribution centers. Basically, it's a high-speed integration
mechanism between the supplier and Walmart that makes the process much faster and more
efficient.

Wal-Mart made significant investments in information technology and communication

systems in order to properly track sales and item inventories in shops across the country. This
business requires a strong communication infrastructure. In addition, Walmart employs the
PRETTY DARN QUICK DISPLAY (PDQ) TECHNIQUE. The corporation used this strategy
by requesting that its suppliers send goods inshore-ready displays known as pretty darn fast
(PDQ) displays. The merchandise was packed in PDQ displays that arrived at the retailers
ready to be placed on the racks. Instead than replenishing each and every item on the racks,
WalMart personnel may simply replace the empty racks with fully loaded racks.

Wal-Mart was one of the first retailers in the world to centralize its distribution system in the
early 1970s, pioneering the retail hub-and-spoke system. Goods were centrally ordered,
assembled at a vast warehouse known as a distribution center (hub), and then delivered to
individual stores under the system (spoke). Wal-Mart was able to generate significant cost
savings by centralizing the purchase of large quantities of commodities using the hub and
spoke system. Also employed is RFID (radio frequency identification) technology, which is
used to replace bar coding and increase staff efficiency because employees are no longer
required to physically scan the bar code, resulting in increased efficiency and fewer stock
outs.

Wal-Mart developed an automatic reordering system that connected computers at Procter &
Gamble ("P&G") with Wal-stores Mart's and delivery centers. A store's computer system
sends a signal to P&G indicating that an item is running short in stock. It then transmits a
resupply order to the nearest P&G facility via satellite, which distributes the item to a Wal-
Mart distribution center or directly to the shop. This collaboration between Wal-Mart and
P&G is a win-win situation because P&G can cut costs by better coordinating its operations
and passing some of the savings on to Wal-Mart. As a result, Walmart is effectively utilizing
MIS to achieve efficiency and cost reduction.

Walmart Marketing activities are focused on developing, promoting, and selling goods and
services in order to meet the needs of customers as well as the organization's goals. Marketing
information systems aid in the formulation of marketing mix decisions. These are some of
them: 1, 2, 3, and 4 Product Price Promotional Location Data and information sources for
marketing: Subsystems for boundary-spanning and transaction processing A marketing
information system is significantly more reliant on external data than other organizational
information systems. It has two subsystems for crossing boundaries and bringing data and
knowledge about the market inside the organization. The goal of marketing research is to
gather information on current and potential consumers, also known as prospects. The
identification of the customer's needs is a critical first step in overall quality management
(TQM). The ease with which statistics on actual customer behavior may be compiled thanks
to electronic commerce on the internet. The statistical analysis of data is supported by
marketing research software. It allows the company to link customer behavior to extremely
specific geographic, demographic, and psychographic data. Marketing (competitive)
intelligence is in charge of acquiring and interpreting data on a company's competitors, as
well as disseminating such knowledge to the right users. The majority of the competition data
originates from business annual reports, media tracking services, and reports purchased from
third-party vendors, such as on-line database services. The Internet has grown in importance
as a source of competitive intelligence.

The product subsystem aids in the planning of new product introductions. In today's
competitive world of rapid change, bringing new items to market on a regular basis is critical.
Despite the fact that decisions on the introduction of new products are unstructured,
information technologies aid this process in a number of ways: Designers benefit from
professional support systems in their knowledge work. DSSs are used to assess new product
proposals. A marketing manager can use a DSS to assess the desirability of a new product.
Electronic meeting systems assist in bringing the expertise of people who are geographically
and temporally separated to bear on the problem. In analyzing new product concepts, data
obtained from marketing intelligence and research is critical. And The place subsystem aids
decision makers in ensuring that the product is offered to customers at the right time and in
the right place. The location subsystem aids in the planning and monitoring of product
distribution networks. The introduction of information technology has greatly expanded the
 availability of product movement information in the distribution channel.

Wal-Mart is the world's largest non-government employer. They understand that retail has a
high turnover rate, but that their colleagues are one of their most valuable assets. "They are
urged to uphold the greatest levels of honesty, integrity, and business ethics," their stated
policy states regarding associates. To be employed as a Wal-Mart associate, candidates must
complete a multiple-choice test and select what are regarded proper "Wal-Mart" responses.
Wal-Mart does not give high compensation since they seek to keep their costs low. Wal-Mart
is the world's largest private-sector employer. They understand that while retail has a high
turnover rate, their employees are one of their most valuable assets. "They are urged to uphold
the greatest levels of honesty, integrity, and business ethics," according to their written policy
addressing associates. To be employed as a Wal-Mart associate, candidates must pass a
multiple-choice test and choose the acceptable "Wal-Mart" responses. Wal-Mart does not
provide high pay since it aims to keep costs low.

Now let’s talk in details about Walmart’s use of Ai, DSS and GIS in their business.

The first question is what is Ai or artificial intelligence? Artificial intelligence is the

simulation of human intelligence processes by machines, especially computer systems.
Specific applications of AI include expert systems, natural language processing, and speech
recognition and machine vision. By deploying the right AI technology, a business may gain an
ability to: save time and money by automating and optimizing routine processes and
tasks. increase productivity and operational efficiencies. make faster business decisions based
on outputs from cognitive technologies.

Walmart uses Deep learning system AI to consider hundreds of variables — size, type, brand,
price, aggregate shopper data, individual customer preference, current inventory and more –
in real time to determine the best next available item. Walmart claims that its item substitution
solution incorporates deep-learning AI that evaluates hundreds of variables like:

 Brand and price

 Individual customer preferences

 Current inventory levels

 Aggregate shopper demand

The solution then communicates in real-time with the customer, asking them to approve or
reject the item substitution. If the customer turns the substitution down, they are prompted to
provide a reason. These data are then fed back into the solution’s dataset and used to inform its
algorithms and improve future recommendations. The solution also helps Walmart’s associates.
Its AI delivers informed substitutions to Personal Shoppers as they navigate Walmart’s stores to
complete shoppers’ orders, and it also tells them just where to find the item in the store, making
their order fulfillment more efficient. After implementing this AI-enabled substitution solution,
Walmart claims that customer acceptance of substitutions has increased to over 95% and
estimates that this purported improvement of acceptance will help to improve Walmart’s
customer satisfaction, and help the firm to maintain market share. Walmart doesn’t list the
before-and-after acceptance rate of substitutions. Also, Walmart is experimenting with Ai based
cameras for their retail stores where the Ai-cameras will not be used to determine which items
customers are buying in order to automatically charge them. It still has traditional checkout
stations. Instead, the cameras will monitor inventory levels to determine, for example, if staff
needs to bring out more meat from the back-room refrigerators to restock the shelves, or if some
fresh items have been sitting too long on the shelf and need to be pulled. The idea is that the AI
will help the store associates know more precisely where and when to restock products. And this,
in turn, means customers will know the produce and meat is always fresh and in stock when they
arrive. In some stores, there are robots that facilitate certain tasks to support the Walmart
technology strategy. These include restocking shelves, tracking overstock items and
ensuring updated prices. The robots operate with AI and machine learning. This Walmart
technology strategy improves inventory accuracy.

In the 1970s, a number of businesses began to develop information systems that were distinct
from traditional management information systems. Decision support systems (DSS) were
small, interactive information systems that used data and models to address semi-structured and
unstructured situations. Individual decision-making DSS installations were expanded to groups
and entire organizations in the 1980s.

A decision support system (DSS) analyzes and synthesizes large volumes of data to assist
decision-making in organizations. It generates reports based on this data that can be used to
forecast revenue, sales, or inventory management. A DSS can provide a variety of various
outputs based on the company's previous data and current inputs by integrating several
variables. DSS is primarily intended to assist middle and senior management and planning, and
it enables you to make more informed decisions even in the face of ambiguity and a fast
changing environment. DSS is now seen not only as a decision-making tool, but also, first and
foremost, as a way to improve the efficiency of business process management in general.

In Walmart, DSSs provides support for pricing decisions, as well as access to databases that
include industry prices. These highly ad hoc judgments are made in order to meet the company's
pricing goals. Earnings maximization to foregoing a portion of profit in order to grow market
share are examples of general tactics. Information systems enable finer segmentation of client
groups and the charging of varied pricing based on the combination of items and services given,
as well as the circumstances of the sale transaction.

Geographic information system or geographical information system (GIS) is a system

designed to capture, store, manipulate, analyze, manage, and present all types of spatial or
geographical data. This provides a foundation for mapping and analysis that is used in science
and almost every industry. GIS helps users understand patterns, relationships, and geographic
context. The benefits include improved communication and efficiency as well as better
management and decision making. Walmart also uses GIS anytime the multi-hundred-billion-
dollar company wants to expand into a new area, it overlays spatial information with its other
market research to determine optimal locations for placing a store or buying land. And for
managing its supply chain, Walmart uses GIS to track the distance and number of steps between
the dock and the store. This allows the company to optimize routes to the shipping dock and
track the number of times a product gets touched along the way to the customer. Further,
Walmart uses geospatial data to analyze transportation routes for its fleets of trucks, helping it
keep transportation costs down and best schedule driver times.

So we can say that the success of Walmart had huge influence by proper use of Management
information system in it’s business. In order to run their huge and complex business they have
adopted the necessary technology and gathered the correct information’s to still being in the
business after so long and in a competitive market.

In conclusion, to deliver accurate information to individuals in charge of making decisions,

Management information systems must be established. The facts would help and improve the
overall decision-making process, allowing for more precise and timely strategic judgments. The
Management Information System improves the accessibility and dissemination of accurate and
high-quality data to end users. To be effective, the Management Information System must
include a thoroughly thought-out, planned, and implemented database to connect the changed
decisions. The management information system of the company must be in line with the
company's administrative and tactical goals. The company's top management should be actively
involved in improving the Information System and contributing effectively to its design. It
should also play a key role in persuading other employees to use the system and exchange
information in order to capitalize on their knowledge and experience.