Assignment Sample on Operations Management of Walmart
Introduction and Background
Sam Walton born in 1918, in the state of Oklahoma, was the founder of the company, Walmart. He was employed by the famous salesman- JC Penney in 1940. Walton resigned and decided to start his own trade business and acquired a franchise business in Arkansas. He succeeded in achieving a meaningful price reduction and opened a second outlet three years later. By 1969, Walton had opened more than fifteen Walmart stores. In the late 1970s, the retail chain opened a pharmacy and car service-center. Walmart has met the huge needs of customers in smaller towns. Walmart offers low prices, a guarantee of customer satisfaction, and time which fits the customers’.
Walmart failed when Walton died in 1992. But its rise continued into the late 1990s and concentrated abroad. Walmart continues to focus on customer needs and save costs through smart “supply-chain-management” strategies, which highlights this unprecedented growth. In the early 1970s, Walmart was the world’s earliest retailer, integrating its distribution system by introducing innovative hubs and radio systems. As a “hub”, they transmit from there to various stores (broadcast). The hub-and-spoke system enables Walmart to source a large number of products from a central location, thereby obtaining significant cost advantages, Reduced procurement costs and quotations, Unbeatable prices for buyers. The company buys products directly from manufacturers and bypasses all intermediaries(Carpio-Aguilar, et, al. 2019).
Operations and Supply Chain Management
Supply chain management defines the management of goods & services flow, inclusive of the conversion processes of raw supplies into finalized produces. This includes dynamically optimizing the company’s procurement events to heighten consumer benefits and achieve a competitive benefit in the market. It is a work carried out by suppliers to design and implement the most effective and cost-effective supply chain, from manufacturing to development of products and information systems necessary to perform these tasks. Walmart Supply Chain Management (SCM) is an advanced management method that captures the comprehensive experience of all companies that produce goods and services from suppliers to manufacturers, wholesalers, retailers and identified consumers. The assembly and logistics system management assumes that all companies involved in delivering goods to consumers are part of the supply chain, conveyor or agreement(Rincón-Moreno, et, al. 2019).
It includes everything needed to make consumers contented, as well as the design of the product they will purchase. The supply chain concept of the product manufacturing and the product transportation ensures that customers get the required products at the correct time, at the best price, and at the preferred location.
The creation process of goods and services is mainly based on the value creation in each process of management of operations. The 4 V’s related to operations management of the company are as follows-
- Volume- It denotes the quantity of a specific item needed to meet one’s needs. Small batch operations are often less repetitive, employees multitask, and large batch operations will lead to repeated procedures, and can be automated. Large batches can easily meet greater demands due to the manufacturing procedure can be accelerated through
- Variation- It denotes the extent of the change due to demand over the course of time because of external factors. However, change prediction is difficult due to several factors.
- Variety- It refers to various goods/services provided to customers. The diverse products can provide the business great elasticity in producing goods/services that meet consumer Diversity is related to quantity, the greater the diversity, the fewer the number of goods/ services.
- Visibility- This refers to how much customer experience is part of the business process. The service industry has a high reputation, and the manufacturing industry is almost invisible to its customers. Some companies use both(Elder and S.D., 2019).
The five performance objectives of the company are-
- Quality- It is an optical indication of execution status of any It is a constant pointer of consumer-employee expectations. Quality can create the potential for improved services or products, and can reduce expenses in long term through more satisfied consumers.
- Speed- It is the response time in between a consumer requesting a product and/or service followed by its When any organization provides goods/ services within time, customers are satisfied more with their experience. Speedy delivery followed cost management.
- Dependability- It shows that the clients can depend upon the employer to get hold of their products or essentials as and while Dependability is vital in presenting the dependable shipping of provider and products.
- Flexibility- It is a way to alter operations according to consumer requirements. It might include altering the way the transaction works or the way the service personalizes the work, such as varying quantities and different delivery
- Cost- It is a vital factor for businesses that straight away compete with tariffs. The lesser the company’s manufacturing expenses, the lesser the price for customers(Rajan, 2020.).
Issues and Respective Strategies
The continuous expansion of antagonism, complexity and business scope has led to the expansion of business scope, and the continuous change of PC functions makes it possible to optimize the performance of the supply chain. E-mail and the Internet have changed the way of communication, making it easier to exchange important information between companies in the supply chain. Walmart announced an increase in catalog sales, a decrease in outages, and a shortened exchange cycle from weeks to days or even hours. A basic assumption about Walmart’s supply chain management is that the system of facilities, milestones, and personnel will purchase raw materials, upgrade them to products, and ultimately assign them to customers as a chain rather than a set of departments. But there are some unified tasks. The importance of this participation cannot be emphasized enough, because the links in the chain are a means to an end. Every company has a supply chain, but not every company has gained a tactical advantage in managing its own chain of supply(Chan, 2019).
Walmart’s division of supply chain management process integrates information systems, procedures, trials and recommendations into all functions of the entire supply chain distribution point. The possibility of using external resources for purposes such as collection and packaging is also another option in the chain. Regardless of compliance with supply chain management, Walmart’s core mission remains the same. Suppliers must continue to deliver materials, continue to create production, continue to deliver sales, and customers must continue to buy. The obvious difference between companies that manage the supply chain is that their focus has shifted from what happens in each link to the links between the links. Any interruption in the supply chain will affect the entire supply chain(Muñoz and C.B., 2017).
In this example, one can see the incredible effect of the snowball supply chain. On-time delivery, private quality delivery makes it difficult to deliver to any of the customers. Due to the unavailability of component circuit boards, computer manufacturers were forced to shut down their production lines. As a result, the computer shipment to Walmart was delayed. Customers went to Walmart to buy a new computer, but they couldn’t find the brand they wanted. In anger, the buyer is satisfied with the purchase of the opponent’s product. Please also consider the time required to complete this process. The delivery time may have occurred before the customer actually owns the computer, which is a real confirmation of the poor quality of silicon(Chang, et, al. 2020).
Many events in the Walmart supply chain are inherently unstable. Traders can transport goods late or early. Consumers can add, reduce or even cancel parcels. New consumers can place large orders. Transportation may collapse. Employees may get sick, go on strike and refuse supplier deliveries or industrial products. In the past, Walmart practiced uncertainty and improved customer satisfaction by increasing inventory. This is no longer a suitable solution. High inventory levels are interpreted as increased maintenance costs and obsolescence risks, which may limit Walmart’s flexibility(Gupta and A.K., 2018).
In the supply chain, the matrix is usually created and maintained at many points. Part of the inventory can be reduced or destroyed at any time. Walmart cuts costs and increases productivity. Reduce the time required from one link in the chain to the next link, and also shorten the cycle time of the entire chain, thereby improving competitiveness and customer satisfaction. Low-cost strategy heads are based on Walmart’s ability to manufacture and sell high-quality goods at a lower cost. The cost leadership strategy goes far beyond the company’s cost-reduction measures that have attracted much attention during the company’s strategic planning and evaluation process(Mazouni, 2018).
Walmart uses its competent cost structure to protect its market from competitors’ attacks and responds to competitors’ claims in the market by lowering prices. The reaction of Lu reaction made Walmart stand out, especially internally. An improved way to obtain Walmart’s tactical cost advantage is to escalate market-share by shifting to a low-cost supplier from a low-cost manufacturer. The growing market share gives the company a good understanding of the effects of economies of scale and the planned fixed cost reduction measures. The more aggressive the space occupied, it also indicates that more opponents are removed, the more operational the scale economies, the higher the cost savings. If Walmart can turn cost-cutting measures into customer value, then it can be said that the company is pursuing a strategy of low-cost leadership(Harsono, 2017).
Walmart is a business that constantly strives for cost reduction and appears on market as a supplier of low-priced goods. In this way, Walmart locked the market, eliminated competitors and increased sales and shares. Economies of all scales and competition are at the base of Walmart’s strategy. To pursue budget leadership, Walmart measures every impact in the value chain of its competitors and strives to surpass its competitors. The process increases rather than artifacts. Businesses following budget leadership strategies aim at existing products to the mass market. Transfer bloodthirsty high-quality products at low prices, and transfer some discounts to customers. They rarely undermine the value proposition to consumers. If one attract potential customers from the bedroom segment, this is an emerging field that may provide another opportunity to reduce costs(KUMAR and BHARDWAJ 2018).
When Walmart evaluates their value proposition offered by it and the features that consumers truly value, it can open up new horizons and opportunities. Such research can reveal certain characteristics that companies can afford high costs, and customers can also afford them. One doesn’t have to worry about cumbersome aspects or installation. Trimming these ornaments can help improve one’s bottom line. However, the reduction in transaction volume and the decline in the company’s products below customer expectations provide a rare opportunity for financial prudence and customer value. Customers from the outside world to the current market can represent a niche market(Tan, et, al. 2018).
The most popular frugal strategy is Walmart, whose head is based on the satisfaction of the customer base that meets this requirement. All sources agree that the basic method of supply chain management starts with accepting customers, customers, their values and commitments. Walmart’s internal customers and end customers. Walmart needs to accurately understand customer expectations for products or services, and then focus on meeting those expectations.. Even performance measurement needs to be customer-centric, because the behavior of the end user ultimately drives the complete activity of the supply chain. Another requirement is better information flow is that Walmart needs to invest in technology to get as much information as possible. Information enables faster exchange of goods and enables all links in the chain to respond quickly to any changes. Information supports decision-making in the supply chain, such as the evaluation and investigation of better options. Information flow is a solution to the problem of product visibility throughout the chain of supply(Chen, et, al. 2021).
The flexibility and required modifications are often difficult for Walmart and its employees. However, the ability to bring about major changes allows companies to benefit from supply chain management. Mart recommends systemization to make changes. One needs to foresee the confrontation and be prepared for it. This will help create the concept of supply chain management. In addition, as with any organizational change, new ideas must be encouraged and supported at all levels of Walmart’s management(Li and Liu, 2018).
Self-service machines provide customers with a mechanism that allows retailers to pay for their purchases without the need for their employees to constantly use this method. They use cashiers instead of regular payments. Stores can usually intelligently manage two to six self-checkout counters that usually have cashiers. Some customers appreciate the opportunity not to do business with anyone. Self-service assistants can track customer progress on all computers through a separate workstation called RAP (Remote Attendant Position). The customer pays and sends the receipt to the cash register of the self-service kiosk. The combination of high barriers to entry and infrequent customer purchase checks reduces the theft of these services, which directs random customers to a special checkout process and scan their purchases in the usual way(Pham, 2018).
Conclusion
It is true that not every company has fast resources and budgets at Walmart, but many things can be learnt to advance supply chain management. Walmart has performed well in three main areas:
- Association
The age of data sharing between retailers and suppliers was unpopular has gone, and we are very grateful to Walmart. They did not look back after starting to study this method in the 1980s.
- IT Investment
Walmart has started to prepare to invest in IT to support its chain of supply. From the in-store mobile devices to analytics software for improvement of the collaboration, Walmart has changed long-term retail practices at low prices.
- Modernization
Walmart faces fierce competition: retailers like Amazon, who advertise with low prices and fast shipping, must find a way to compete with essentially perfect customer service. Earlier this year, Walmart expanded its e-service to thirty new markets. Walmart is always looking for new ways to generate new revenue and adjust its supply chain accordingly. There is a lot of knowledge that can be learned in e-commerce, which can help promote the growth of this field(Song, 2018).
References
Song, X., 2018, June. A study on management model of human resources in multinational companies based on cultural differences–taking walmart as an example. In 2018 International Conference on Sports, Arts, Education and Management Engineering (SAEME 2018) (pp. 292-295). Atlantis Press.
Pham, H., 2018. The impact of Blockchain Technology on the improvement of Food Supply Chain Management: Transparency and Traceability: A case study of Walmart and Atria.
Li, C. and Liu, M., 2018. Overcoming collective action problems facing Chinese workers: Lessons from four protests against Walmart. ILR Review, 71(5), pp.1078-1105.
Tan, B., Yan, J., Chen, S. and Liu, X., 2018, December. The impact of blockchain on food supply chain: The case of walmart. In International Conference on Smart Blockchain (pp. 167-177). Springer, Cham.
KUMAR, N. and BHARDWAJ, S., 2018. Amazon and Walmart on collision course.
Harsono, A., 2017. How walmart enhances supply chain management with CPFR initiatives.
Mazouni, M., 2018. The Effect of Global Investment Decisions and Financial Risk on Multinational Corporations: Walmart Corporation Case Study. Available at SSRN 3257136.
Gupta, A.K., 2018. Walmart: a roadmap for globalisation. The Business & Management Collection.
Harrison, V., 2019. Legitimizing private legal systems through CSR communication: a Walmart case study. Corporate Communications: An International Journal.
Chang, Y. and Hu, J., 2020. Analysis on the Mode of Multinational Retail Enterprises Entering Chinese Market—Take Walmart, Carrefour and Metro as Examples. Modern Economy, 11(01), p.17.
Muñoz, C.B., 2017. Building power from below: Chilean workers take on Walmart. Cornell University Press.
Carpio-Aguilar, J.C., Rincón-Moreno, J. and Franco-García, M.L., 2019. Potential of Carbon Footprint Reduction within Retailers: Food Waste at Walmart in Mexico. In Sustainable Development Goals and Sustainable Supply Chains in the Post-global Economy (pp. 225-240). Springer, Cham.
Chan, A. ed., 2019. Walmart in China. Cornell University Press.
Rajan, T., 2020. The Flipkart Story in India: From the Start to Walmart. Asian Journal of Management Cases, p.0972820120914526.
Elder, S.D., 2019. The impact of supermarket supply chain governance on smallholder farmer cooperatives: the case of Walmart in Nicaragua. Agriculture and human values, 36(2), pp.213-224.
Rincón-Moreno, J., Franco-García, M.L., Carpio-Aguilar, J.C. and Hernández-Sarabia, M., 2019. Share, Optimise, Closed-Loop for Food Waste (SOL4FoodWaste): The Case of Walmart-Mexico. In Towards Zero Waste (pp. 165-190). Springer, Cham.
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