Wal-Mart Satellite Communication System

When Wal-Mart introduced its 24 million dollar satellite communication system in 1987, it was ruled the worlds largest private satellite communication network. This contemporary emerging technology, although not as technologically advanced as some satellite systems today, made a vast difference in the performance of an emerging organization. This network allows the instantaneous transfer of data between headquarters, distribution centers, suppliers and stores. Moreover, this vast networking system allows for management to communicate effectively with all employees, or even better, to hold meetings with the managers from each store to get direct feedback as quickly as possible. Wal-Mart implemented this new technological resource to create just-in-time ordering with many of its key suppliers. Essentially, what this means is that when the stock of certain products hit a reordering point, an automated response is sent out instantaneously via satellite to the supplier of that product, purchasing more units, automatically shipping the units to its stores, and paying for the new units electronically all in the blink of an eye. This form of payment and restocking vastly decreases the amount of time it would normally take, thus saving time and money. The network itself uses a Ku-band satellite transmission with voice and computer data streaming between headquarters at Bentonville, Arkansas and all other locations. Moreover, video signals can be broadcasted from headquarters to all stores and other facilities. This ability, while acting as a communications tool between HQ and management, also was used, and continues to be used as a marketing ploy as well by the cunning commercial supergiant. On November 17, 1999, Wal-Mart broadcasted an exclusive Garth Brooks concert via satellite into all of its stores just as holiday season was beginning, obviously boosting sales dramatically. A Wal-Mart spokesman commented on the satellite transmission, stating it was, “proof of how retail shopping is evolving to reflect the demands of customers who want more than just to buy merchandise at a low price.”
This satellite system clearly exemplifies the time old saying that time is money. One of the greatest benefits of Wal-Mart’s satellite network is its ability to cut costs by saving time and effort. With this system, computer data and voice transmissions can be sent at 56 kilobits per second, as comparative to 12 or 24 kilobits per second via telephone lines. Credit card authorizations are faster and more accurate, speeding up checkout services at stores nationwide, boosting customer morale. The network cuts telephone costs by about 20 to 30 percent, while simultaneously offering high speed communications. Training videos can be sent out instantly by transferring the master video to stores as opposed to physically mailing videos to each of its stores. Essentially, the pros for this technology can be summed up in that everything is instantaneous and everything is connected. This saves a lot of time, saves a lot of money, and consequently Wal-Mart benefits.
There are really very few cons to this technological implementation. One of the only real substantial negative impact of this networking system is that all the jobs required pre-networking to do physical tasks, such as mailing out training videos for example, are now gone. This means that lots of people lose their jobs, which is unfortunate, but ultimately a part of business. Besides that, the networking system is much more effective and beneficial than the old system. Wal-Mart’s sales in 1985, 2 years before the launch of its satellite network, were $8.4 billion. By 1995, they reached $93.6 billion, and currently that number is still larger yet.

Sources:

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http://findarticles.com/p/articles/mi_m3374/is_4_21/ai_54082881

http://www.blonnet.com/2005/07/17/stories/2005071700141600.htm

http://findarticles.com/p/articles/mi_m4153/is_n1_v54/ai_19224868