Week 2 Assignment Operation Excellence- ITS 631

Week 2

                                                                        Assignment

Operation Excellence- ITS 631

Company overview

For this assignment I have chosen Walmart as my company. Walmart is an American multinational retail corporation that operates a chain of hypermarkets, discount departments stores and grocery stores. Walmart was founded by Sam Walton in 1962 and currently has 8446 retail units under 55 different banners in 15 countries. It has employee more than 2.1 million people all over the world. The starting slogan of Walmart was “Always Low Prices” but hey have changed it now and new slogan states “Save Money Live Better”. Walmart provides general merchandise: family apparel, health and beauty aids, household needs, electronics, toys fabrics, crafts, lawn and garden, jewelry and shoes, pharmacy, tire and lubes and photo processing center.

Situation/ Problem

Walmart’s operations management covers the approaches that are focused on managing supply chain, inventory and sales performance. The huge success of company is partly based on effective performance in operations in operations management. But the markets are changing and competitors are growing day by day. Customer all over the world are going online to purchase the products and it seems that Walmart is not doing good enough to step up in online markets. Companies like Amazon and Best Buy are taking lead in online sales but Walmart is trying to find ways to compete. With Amazon posting web sales of $61 billion compared to $7.7 for Walmart, it seems Walmart has lost valuable market share to its competitors. It seems strange that a company as large as Walmart has not been able to more competitive in ecommerce. The other challenges Walmart faces includes warehouses overstocked with seasonal items making difficult to fulfill of sales of everyday products. Seasonal items such as electronics, toys and clothing items are stocking up in inventory which makes difficult in managing everyday sales items.

Recommendations

With massive fleet of stores across the country Walmart can really step up in the online markets.  Let’s discuss how the strategic role of operations function help Walmart to achieve its goals. The three attributes of operations strategy are implementing, supporting and driving. By opening warehouse in existing stores, Walmart can easily attract new customers. With all items racked up in stores, Walmart does not have to invest much more in day to day products. On the basis of its customer needs and the customer buying pattern Walmart can easily differentiate the popular products from the low selling products. This increase sales in one hands and also help in inventory management system by reducing seasonal low selling items from the inventory.

Walmart should focus on its competitive factors such as low price, high quality, fast delivery, innovative products and services, reliable delivery and wide range of products and services.  Walmart really needs to work on the thought of ordering an item online and receiving it the same day. With technology becoming more integrated and the demand for instant gratification same day delivery seems to be achievable.

Walmart is doing a better job of having fresh food in stock, the retailer now needs to focus on improving the quality of the items on its shelves. Improving quality includes training employees to recognize which items needs to be replaced and which items needs to put first. Grocery accounts for more than half of Walmart’s U.S sales and is facing immense competition from stores like Target and Amazon Whole foods.

Recommendation II

Through efficiency, innovation, quality, responsiveness to customer and other factors Walmart has always been able to successfully build a competitive advantage. Product and service innovation includes significant improvements in technical specification, components and materials, incorporated software, user friendliness or other functional characteristics. Competing Amazon on this global market specially to boost online sales Walmart has to integrate all the department efforts and focus on diverse workforce into its organization to keep pace with changing consumer needs. Innovation whether incremental or revolutionary is the engine that keeps organization moving forward. At the heart of innovation is collaboration and integration of systems, designing and updating new technology and constant improvements and implementation.

With mobile technology regarding smartphones and wearables is becoming more prevalent within the retail landscape, Walmart should initiate to serve a more in this comprehensive market allowing anyone with these technologies to participate. The other thing Walmart should consider doing is leveraging their greatest assets ‘associates’ to get online orders to customer’s doors. This will eventually help in cutting shipping cost and increase efficiency as well as help packages to get their destination faster.

References

Wal-Mart In The Global Retail Market: Its... (PDF Download Available). Available from: https://www.researchgate.net/publication/228477402_Wal-Mart_In_The_Global_Retail_Market_Its_Growth_And_Challenges [accessed May 20 2018].

Walmart sparks SMS innovation to transform in store product search. (n.d). Retreived from https://www.retaildive.com/ex/mobilecommercedaily/walmart-tech-competition-sparks-sms-innovation-transforming-in-store-product-search [accessed May 20 2018].

Stevenson, W. and Sum, C. (2007). Operations management. 9^th ed.[Singapore]: McGraw-Hill Education (Asia).

Slack, N., Brandon-Jones, A. and Johnson, R. (2016). Operations management 8^th ed. Harlow, UK: Pearson Educational Limited.

Eroglu, C., Williams, B. D., & Waller, M. A. (2013). The backroom effect in retail operations. Production and Operations Management, 22(4), 915-923.