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or the past year, B2B exchanges have been appearing across the industrial and retail landscape like weeds in an unkempt garden. As strong as some of these alliances appear to be, analysts predict that as many as 75% will not make it through 2001.

To some observers, Wal-Mart Stores Inc. has been conspicuous by its absence among the rosters of the B2B exchanges formed to unite food, CPG and retail segments.

However, since 1991, Wal-Mart has been front-and-center in the business-to-business sector with Retail Link, its technologically enhanced supply-chain infrastructure. Retail Link integrates the company's electronic data interchange (EDI) networks with an extranet used by Wal-Mart buyers and some 10,000 suppliers to gather and disseminate information about sales and inventory levels in every store.

This year, as various B2B exchanges were in the process of ramping up, Wal-Mart undertook the enormous task of evolving its business-to-business strategy to another level. Where Retail Link unites about 90% of Wal-Mart's suppliers in global sourcing and collaborative business processes, the new extended system creates a private exchange to link Wal-Mart with only its most strategic suppliers for its most critical transactions.

"It's a major issue for us to find suppliers to handle our volume worldwide," says Kevin Turner, senior vice president and CIO, Wal-Mart. "This will allow us to go broader and deeper."

The new business-to-business dynamic is being enabled via the next generation of software technology from Atlas Commerce, Malvern, Pa.

"Retail Link allows Wal-Mart suppliers and merchants to view, manipulate and access 104 weeks of online, real-time, item-level data that is kept at the lowest level of detail," Turner says. "Our work with Atlas Commerce will extend and accelerate Retail Link's capabilities and help us work more closely with our suppliers to better serve our customers."

However, this business-to-business strategy is just one of the sectors in which Wal-Mart has developed, enhanced or utilized technology that has changed or redefined the face of retail IT.

"Obviously, it's a pretty daunting and complex task. But it is one that many people, myself included, believe we can achieve," Turner says. "What's the alternative? Doing nothing and taking what we already get? That is not an option. Efficiencies are very important in our corporate business model."

big part of Wal-Mart's IT strength has been its ability to identify future needs and put standards into place. As the technology emerges and becomes more cost-effective, the company is ready to enact them, Turner says.

"We are continually striving to develop our information systems to work more efficiently and cost effectively for our associates and with our suppliers, with the end goal always being to better serve our customers," Turner says. "We are very fortunate to work in a company that believes information systems should be a competitive advantage, and to have wonderful associates who work very hard to develop and implement our systems."

Key to Wal-Mart's willingness to set standards in retail technology is the fact that its leadership has had an extensive hands-on role in developing the company's IT and distribution networks.

Turner, who was named to his current position in February, joined Wal-Mart's information systems division in 1989 and has since held various technical and management positions. In 1995, at the age of 29, Turner became the youngest corporate officer at Wal-Mart when he was promoted to vice president of application development. There, he helped drive the systems conversion for several mergers and acquisitions for Wal-Mart. In 1997, Turner had worldwide responsibility for all application development and support, corporate help desk and telecommunications.

"As long as the technology can help our store and club associates better do their jobs by helping customers check out, enabling them to order merchandise faster or whatever the function may be, the company believes in that investment," Turner says. "Wal-Mart has made those investments over the years."

CEO and President H. Lee Scott also has had a crucial part in building Wal-Mart's IT systems over the past 20 years. Since joining the company, he has served in such capacities as director of transportation, vice president of transportation, vice president of distribution and senior vice president of logistics. In 1995, he was appointed executive vice president of merchandise for the Wal-Mart Stores division. Three years later, he was named president and CEO of the Wal-Mart Stores division, where he was responsible for overseeing merchandising and operations for more than 2,300 Wal-Mart stores.

"We view the CIO role at Wal-Mart as extremely important," Scott says. "Systems and logistics have always been two things we've had a leadership position in.

"First of all, it is critical we spend enough. Second, it is critical that with the money we do spend, we know we will get a return on it," he says. "It has meaning to this role we play in providing value to the customer. It is not just something that is nice to have."

The challenges being faced by Wal-Mart in supply chain management are directly linked to the company's aggressive IT division. And that means not only staying ahead of the retail technology curve, but, in many ways, defining it.

"Probably our single biggest challenge with the supply chain issue, with the growth we have going on today and when you look out five years, is to make sure that the infrastructure of logistics keeps up with our store growth," says Doug Degn, executive vice president, food, Wal-Mart Stores. "It's an incredible challenge when you look at our projected Supercenter growth over the next three to five years and what that's going to mean to food."

As Wal-Mart drives its everyday low-price (EDLP) concept, one objective is to have a structure that allows the company to bring EDLP to the food side of the business. That means flexibility in distribution is going to be a big part of the future, Degn says.

"Customers drive assortments, and we have to figure out logistically how to service those stores and those different customer bases. You cannot have a one-size-fits-all type of distribution mentality when you look out to the future," he says.

Retail Link has been a great tool for Wal-Mart in terms of collaboration with suppliers. And as the company's customer base changes, Retail Link continues to evolve, he says.

"What Retail Link has facilitated is our ability to go out and look at different markets and different stores, and to tailor our assortments against those individual stores," Degn says. "When we first put it out, there were a lot of questions about what the power of this information would be. As we've sorted through it for the last couple of years, it's become an incredible tool in servicing our customers."

al-Mart is also evolving via its Walmart.com Web site, which operates as a separate company, headquartered in Palo Alto, Calif., under the auspices of CEO Jeanne Jackson. The site has gone through several incarnations, including a major re-launch in November.

"The whole focus is to make the site as usable as possible," Jackson says. "Wal-Mart never is caught flat-footed."

As such, her team has agonized over such decisions as the number of products that should be available to online consumers (which at one point prior to the re-launch was 600,000) and which services should be provided. For Walmart.com, that includes offering for sale such large-ticket items as patio furniture and appliances, and providing lists of real-time inventories from brick-and-mortar stores.

"We care about the numbers, but the primary concern has got to be customer service and establishing a base that you can build on in the future," Scott says. "Our goal here is to grow our market through the Internet, not cannibalize the existing Wal-Mart customer base."

Retail Link plays a vital role in the dot-com strategy as well. Whether it comes to maintaining inventory in-store or online, supply chain management is essential to customer service.

"One of the things that people are now starting to get involved in is this whole market-basket analysis. That's going to be a big part of the Retail Link development over the next couple of years," Degn says. "Essentially, one of the factors that goes back to distribution is the further collaboration on how you source goods, how you keep the forecasts and everything in the supply chain real tight so that you're driving the mentality of absolutely everyday lowest costs out there in the marketplace."

Previously, Retail Link was regarded as the domain of Wal-Mart's merchandising staff, buyers and salespeople for suppliers. However, that has changed in the last couple of years, he says.

"There has been more interaction that occurs behind the scenes among the company's basic inventory management, forecasting and replenishment groups and the supply chain staff at our suppliers," Degn says. "That has really stepped up. We have a very strong program relative to that collaboration. When we look to the future about how important it is, we'll continue to aggressively drive that."

As Wal-Mart continues to push boundaries and focus on becoming a global retailer, Retail Link and IT support systems become increasingly important to supply chain dynamics, overall cost efficiency and customer satisfaction.

"I think in the next 10 years you're going to see a customer come into a Wal-Mart store with their own piece of relationship technology, which would be part Palm Pilot, part cell phone, part pager, part Internet browser—a device you could fit in a pocket or purse," Turner says. "They'll be able to scan merchandise, order it online, use e-mail from the sales floor or make a phone call.

"Has IT been exploited to its fullest potential? Probably not. That's what we're committed to try to achieve," he says.