The Overall Impact of Information Technology on Business
Data warehousing is used to study sales trends and track inventory as well as tying in to Wal-Mart's Retail Link decision-support system that suppliers use to study item-level inventory and sales information (Whiting 2004).
Another business that has maximized use of advanced technology to improve its operations is QVC. QVC has capitalized on the benefits of virtual warehousing and innovative transport strategies such as cross-docking. The virtual reality warehouse that QVC's internet shopping arm (iQVC) uses has reduced operating costs and made fulfilling orders much faster than ever before. Whereas items stocked in a physical warehouse must be stacked on pallets or shelves and picked for shipping when a customer places an order, in a virtual warehouse, products are available electronically from suppliers rather than being physically stocked (Roussel-Dupre 2001). A virtual warehouse looks at its various distribution centers as a network; their location is not an issue as long as the products can be delivered to the customer on time. iQVC communicates with drop-ship suppliers through a fulfillment hub system instead of value-added networks (VANS) and realizes 25% lower labor costs, half the number of backorders, and 20% lower vendor order confirmation time (Roussel-Dupre 2001). This inventive approach allows iQVC to receive orders 24 hours a day, 7 days a week from anywhere in the world, making previous stocking and transport systems inadequate (Roussel-Dupre 2001).
In an operation like QVC's, fulfillment is critical. QVC's customers expect rapid delivery of products, and QVC has gone beyond traditional shipping approaches to achieve that quick turnaround. One of the strategies used is crossdocking, in which shipments from different sources can be consolidated to reduce the cost of outbound transportation and eliminate the inventory-holding function of a warehouse ('Crossdocking')