Walmart’s VMI System
Walmart employs a special kind of enterprise system called an inter-organizational information system it calls vendor-managed inventory (VMI) to improve product flow and lower its store inventories. Under this program, suppliers are responsible for managing the inventory of their products in Walmart’s warehouses. Suppliers are granted access to a Walmart database that contains item-level sales and inventory data for their products only, which help the vendors develop product demand projections using a collaborative planning, forecasting, replenishment process. Each link in the supply chain is interconnected using information technology that includes a central database, store-level-point-of-sale systems, and a satellite network for fast and reliable communications.
Review Questions
Do you think that the VMI software is off-the-shelf or proprietary software? Why?
Should Walmart allow the suppliers to take a major role in defining and customizing the features and capabilities of this system or should they insist on a “one size fits all” approach?
What special issues and considerations are likely to arise in the operation and support of an inter-organizational system?
Given the business criticality of this system, would it make sense for Walmart to consider moving this system into a public cloud environment? What would be the advantages and disadvantage of such a move?