Walmart Stores: Implementing ERP System

Introduction

Write a brief background on Wal-Mart

Wal-Mart is a large worldwide discount trade chain. This company began operating in the 1940s when Sam Walton commenced his career in trading at J.C.Penny. In the year 1950, Sam Walton merged with the Butler Brothers, the owners of the trade chain Ben Franklin. In the same year, Sam Walton acquired a hoard from Luther Harrison in Bentonville and set up Walton’s 5 and 10. In 1962, he spent 95% of his funds in setting up the first Wal-Mart hoard. ERP is a technique that makes use of computer technology to relate various functions in a company. Examples of such functions include bookkeeping, inventory management and human resources (Soderquist, 2005 p. 188).

Discussion

What was the problem that Wal-Mart faced before implementing its ERP system?

The problem that Wal-Mart faced before implementing its ERP system is the lack of technological edge. Wal-Mart had in the past relied on home based systems that led to severe competition with other retailers. These early systems were complex and very costly and their execution was time consuming.

What type of ERP system does Wal-Mart use? And why it uses it?

The type of ERP system used by Wal-Mart is SAP® ERP Financials. SAP is the top provider of business programmes in the world. Wal-Mart chose this type of system for its capability to sustain the company’s worldwide growth and effectively react to changes in trade and regulatory landscape. It uses this type of ERP since it enables it to maintain growth and steer developing business and regulatory landscape. SAP also enhances the company’s fiscal position. Wal-Mart trusts that SAP’s experience in assisting International corporations with their fiscal systems will result to more elasticity and scalability in their company (Monk& Wagner, 2009).

What are the benefits for Wal-Mart in using its ERP system?

The benefits achieved by Wal-Mart for using its ERP system is that it has helped it to attain its objectives for leadership and development, leading to competitive advantage with happier customers and lower business expenditures. SAP has also helped this company by offering top rated answers that address complicated needs of the business. Through SAP, Wal-Mart is able to enhance consumer relationships, improve partner alliance and generate competence across its business processes. The ERP system in Wal-Mart is also used to predict product demand, order the required raw materials, develop production schedules and allocate expenses (Monk& Wagner, 2009).

How long did it take Wal-Mart to implement its ERP system?

Wal-Mart planned to implement its ERP system in a period of four years. It executed this ERP system internationally in phases. The first phase was completed by the year 2010 (Soderquist, 2005 p. 188).

What is the size of the system?

Paula Rosenblum asserts that the SAP contract is a good move for the company. He asserts that this software should not be too large to amalgamate with its subsisting systems. He further adds that this system is of the right size and scope.

How much money did Wal-Mart spent for its ERP system? How much did Wal-Mart spend on consultant? How much did Wal-Mart spend on training its employees how to use the new ERP system?

It is hard to say exactly how much Wal-Mart spent for its ERP system, that is, on consultation and employee training. This is because the company is mum about the financial particulars of its operations. Looking at what we know about the SAP ERP Financials for most large companies, with Wal-Mart having global revenue of over 350B and running over 6000 stores with 2m employees, then it is right to say that it spent hundreds of millions in its ERP system (Soderquist, 2005 p. 188).

References

Monk, F., & Wagner, J. (2009).Concepts in Enterprise Resource Planning. Australia: Cengage Learning. Web.

Soderquist, D. (2005). The Wal-Mart way: the inside story of the success of the world’s largest company. Nashville: T. Nelson. Web.