Verma 1

Case Study: How Walmart could solve its inventory problems and
Improve Earnings

1. Define /Describe the problems or challenges (Issues)

Ans: Walmart lost over $ 3 billion dollars in 2013 sales due to out of
stock items and the fact that its inventory grew at a faster rate than its
sales. It realized that it had an inventory management problem which
contributed to its lower earnings.
2. What recommendations do you have in terms of analysis to help
define the problem?
Ans: I recommend that walmart consider relooking into ways to manage
their inventory problem. Since other retailers have started looking into the
RFID technology it looks like a natural solution to their backroom
problems. The problem here is a way to find the required product when
needed and the amount of payroll hours used for allocating space.
3. What solutions were put in place?
Ans: Walmart hoped to add more payroll hours to solve their inventory
problem. They didnt look into the RFID technology that they implemented
in their supply chain earlier in 2003.
4. What Solutions do you recommend?
Ans: I would recommend walmart to give a second look at the RFID
technology. Especially implement readers created by Impinj called
speedway Xarray which have the wide range capabilities (upto 40 foot in
diameter). Since Tag prices have already dropped to reasonable levels,
companies like walmart could use these readers to tackle their backroom
problems. This would result in improved inventory visibility and reduced
inventory investment.
5. What is overall reaction of the article?
Ans: I think that this article addresses a serious problem in inventory
management and that huge retailers like walmart are losing a lot of their
revenue because of it. This article also provides us with the solutions to
solve this problem and to cut down on inventory related costs. Also this
article tries to emphasize on the incredible value that specialty retailers
would accrue by implementing new RFID related technologies created by
companies like Impinj.

Verma 1