Wal-Mart: An E-Business Success Story

Possibly the single greatest success story of e-business and B2B implementation is that of the rise to dominance by Wal-Mart in the North American retail market. Love them or hate them, you have to hand it to Wal-Mart for their impressive growth in such a short time span. And arguably the single most important factor in this rise was their harnessing of the power of e-business, e-procurement, and the adjustment of internal processes to maximize this advantage.

More than any other company, Wal-Mart has revolutionized supply chain management by using a “pull” model where customer demands drive the suppliers. Inventory control is finely honed and purchasing trends are available to suppliers, whom now must be able to quickly respond to the needs of millions of customers. The business decision to decentralize the procurement process means that front-line staff in every store can immediately order the appropriate stock electronically, which will in turn require rapid turnout of product from the suppliers. This rapid replenishment system, coupled with accurate purchasing forecasting, helps Wal-Mart reduce overall costs.

While not always good for suppliers in general, Wal-Mart’s power as a giant in business has helped in establishing new standards for B2B e-commerce. Wal-Mart’s mindset of cutting costs at all costs resulted in them deploying EDI over the Internet to eliminate the costly VAN altogether. EDI over the Internet (EDI-INT) uses a new standard called AS2, a communication protocol that attempts to make EDI communications over the Internet both secure and reliable. By mandating their suppliers to use AS2, Wal-Mart leads the way in creating a demand for a new generation of EDI, and in turn drives the whole world of e-business forward.

iTeam specializes in implementing the same technologies that has made Wal-Mart successful. Talk to us today about how we can help advance your business.