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Thursday, December 16, 2004
Wal-Mart Stores Inc.'s I.T. team is just a couple of weeks away from the first wave of suppliers participating in its ambitious radio-frequency identification project. When RFID-tagged pallets and cases begin moving en masse into three distribution centers in Texas, and data begins to flow from them into Wal-Mart's Web-based supplier-collaboration system, it will be the start of a revolution in supply-chain management. Executive VP and CIO Linda Dillman and some 2,400 people who make up Wal-Mart's Information Systems Division can take credit for leading the charge that already has expanded far beyond the retailer's four walls. A couple of years ago, Wal-Mart was involved with MIT's Auto-ID Center doing field studies on RFID. It was perfect research work, but too fragmented an effort to drive industrywide adoption, Dillman says. "You couldn't try RFID in all the scenarios," she says. So Wal-Mart picked one approach--tagging cases and pallets--and issued an edict to have its top 100 suppliers focus on that for a January 2005 deployment, in the process driving commitment from some major, but hesitant, tech vendors. "That was critical to make the technology work," Dillman says.
Within Wal-Mart, a team of four RFID pioneers (later expanded to eight people) headed by Simon Langford, manager of global RFID strategy, did a lot of the heavy lifting. But both Dillman and Langford point out that the project was possible only because of the support of Wal-Mart's entire Information Systems Division. "There's no sense of pride to solve something yourself," says Dillman, a 12-year Wal-Mart veteran who joined the retailer when it acquired the Wholesale Club in Indianapolis, Ind., where she had been a senior systems analyst. "There is strength in numbers, in reaching out to others."
In the last year, collaboration in the division has fueled some 2,500 projects, from the RFID deployment to rolling out global financial systems that make it easier for stores to more quickly close their books each month, as well as adding features to point-of-sale systems that help Wal-Mart's approximately 1,360 discount stores, 76 Neighborhood Markets, 1,062 Supercenters, and 550 Sam's Clubs nationwide comply with local labor laws.
Indeed, collaboration is critical for speed, efficiency, and innovation. The company has more than $250 billion in yearly revenue and a below-the-industry-average IT budget, relies on homegrown software to run its business, eschews outsourcing, and requires systems to be available for global use. "The [application] development isn't successful if the infrastructure team that builds the physical system isn't successful," says Dillman, 48, whose career at the retailer included manager, director, and VP positions in application development before she became VP of international systems. "The infrastructure team isn't successful if the operations team doesn't know how to measure the system. They all are measured in their success based on the final impact to the business." That shouldn't be a surprise, given that the Wal-Mart culture is to consider every employee a merchant first, and each one's goal is to serve the customer.
"The fun part about working with Wal-Mart [Information Systems Division] is we're treated as business enablers, not computer nerds," says Dan Phillips, VP of operations, data warehousing, databases, large systems, and communications, who was Dillman's first manager at Wal-Mart.In 2005, Wal-Mart's U.S. IT staff is expected to grow between 5% and 6%, and creativity is a core requirement for those who make the cut. Some of that creativity comes out in the company's annual VPI (Volume Producing Item) contest, where various teams within Wal-Mart each pick a product and compete to promote its sales. The totals are tallied in December, and this year, the Information Systems Division has two products in the top 10; for 2005's contest, Dillman is considering choosing Wal-Mart's private-label Great Value powered-drink mix. Some of the division's secrets for boosting its picks: programming messages promoting the items at price scanners located throughout stores and at the bottom of register receipts. "It's part of the way I can prove our technology works," says Dillman, whose likeness in a cardboard figure at retail stores is promoting a contest pick--in her case, Members Mart Detergent at Sam's Clubs.
Typically, the best project leaders get promoted to managers, and Dillman's goal is to foster within those ranks "executives who manage people who manage projects." So Dillman has implemented twice-weekly team-building meetings for her division's senior executives and directors, to promote the idea that "a constant sense of accomplishment means multiple people collaborating in the project from start to finish." Dillman also has added to Wal-Mart's training opportunities a project-management course she believes could generate significant payback by improving developer productivity. |
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