Walmart in China

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The Beginning of Walmart Logistic………………………………………………………… 3 Magic of the stripes………………………………………………………………………………. 3 Walmart’s Cross Docking……………………………………………………………………….. 5 Downfall of Barcode System…………………………………………………………………… 6 Power to the RIFD………………………………………………………………………………….. 7 Walmart’s RFID Influence in China………………………………………………………….. 9 The Chinese RFID investment…………………………………………………………………. 10 Chinese market potential………………………………………………………………………… 11 Conclusion………………………………………………………………………………………………. 12

The Beginning of Walmart Logistic
Wal-Mart as we all know it, it is an American multination corporation that operation in a largest chain discount stores in the world. Sam Walton, the successful business man from Arkansas began his retail store in 1940, worked at J.C. Penney and later on started a small retail chain store called “Ben Franklin”. It wasn’t till 1962; Mr. Walton opened the first Walmart store. In the beginning, Walton had his strategy set to low income families and offered a considerably lower cost than his competitors, the low price strategy allowed Walton to steer forward with his real goal to become the supply chain logistics giant. By 1987, Walton have led the store into a growing rampage, Walmart had 1,198 nationwide, sales in the 15.9 billion and had 200,000 associates (Walmart, http://walmartstores.com/aboutus/7603.aspx, 2011), In the same year the company also became the largest private satellite net work in the country and implemented the first distribution monitoring system, it is a linked satellite system that offers two ways data , voice and one way video communication between Walmart’s driver and distribution center which increases inventory accuracy and ability to quickly restock store inventories (Wailgum, 2007).

Magic of the stripes
In addition to the satellite system, Walmart has guided the way to other ground-breaking technologies that had other retailers follow. In 1988, Walmart was the first retail company who used the barcode system as the universal labeling system (Walmart, http://walmartstores.com/aboutus/7603.aspx, 2011). The efficiently of the barcode system gave Walmart the capability to reduce store inventories and the cost of keeping items in warehouse. The barcode system also makes it possible for Walmart to record sales of each item for more accurate sales analysis, because the barcode system worked so well, 99 percent of Walmart stores adapted this technology(Walmart, http://walmartstores.com/aboutus/7603.aspx, 2011). But it also created another problem for Walmart suppliers. One of the key pieces of the barcode system is the Universal Product Code (UPC), the UPC is a stamp with black and white stripes and numbers on the bottom that allows a barcode scanner to scan the product. Getting the UPC code isn’t as easy as print it on the box and ships it out to Walmart. First, Walmart requires all their potential suppliers to file an evaluation with Dun & Bradstreet for an evaluation of the company’s financial standing, second, buy a membership from Uniform Code Council's GS1 that cost at least $750 plus an annual fee that bases on the company’s sales plus cost of each UPC on the product (Washingtonpost, 2007). Base on the cost, if you are large company like PepsiCo or Johnson & Johnson the fees are relatively small, but if you are a small mom and pop business the fees can eat up most of your sales revenue. However, Jon Lehman who was a Walmart Manager who managed six stores said during an interview with PBS.org(PBS.org, 2004) “you can track sales on specific items, specific weeks, specific days, specific hours of the day, when you sell merchandise the most. You can find out what size of toothpaste is your best seller, what times of the year you sell that toothpaste. You can track sales spikes during the year, during certain seasonal periods”. the benefit of the barcode system gives Walmart the leverage power to have all their suppliers include...
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