Running head: OPERATIONS MANAGEMENT 1

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OPERATIONS MANAGEMENT 2

Introduction

After plan establishment, a firm must decide the way through which management would

work to achieve the completion of those plans. These plans include operational plans that should

be derived from the strategy like resource allocation, time management and competency of an

organization's workforce (Jacobs, Chase and Lummus, 2014). Operational plans at the bottom

line of the organization have narrowed scope and are established to cater to short-term

requirements (Stevenson, Hojati and Cao, 2007). Wal-Mart's strategic objective, provision of

high-quality products at reasonably low prices to its customers, is a good example of this. The

major aim behind their operational plans is to achieve efficient logistics, which needs advanced

technology and good stock management, to lower their costs. The organization first develops the

tactical plans from which it derives the operational plans, the purpose of which is to achieve few

or more operational objectives of the organization (Smithson, 2017). The task administration of

Wal-Mart covers an assortment of methodologies that are centered on dealing with the

production network and stock and deals with execution. The prosperity of the organization is

mostly in light of viable execution in activities administration. In particular, the greater part of

the 10 choice zones of activities administration is covered by Wal-Mart’s administration

(Smithson, 2017). Issues and worries faced by the supervisor’s look once a day are related to

these choice regions. Wal-Mart's use of the 10 choices of tasks administration mirrors directors'

prioritization of business targets. Thus, this prioritization demonstrates the key criticalness of the

distinctive choice regions of tasks administration in Wal-Mart's business.

Methodology

The technology of process mapping is a valuable instrument that could be utilized for

operational management of the business. It evaluates the prevailing operational procedures of the
 OPERATIONS MANAGEMENT 3

firm, facilitates the management in identifying the needs and performance of various sections of

the firm and in bringing effective reforms in the operational procedures.

This document will explain the process map to identify various kinds of processes

through which it became easy to define the process mapping. It will also facilitate the process of

problem identification and the ways to solve them. By using supply chain operations model, the

document will evaluate the significant issues related to the process mapping. The issues

identified are related to the supply chain that could negatively affect the process mapping and

various operations of the firm.

Furthermore, it will utilize the instruments of supply chain risk management and cost

leadership model to provide some valuable suggestions. Based on the notions of capacity

management, operations and sales management and decision-making framework, this problem

will be evaluated and suggestions will be provided.

Process Map

Purchase Data is The date is Previous day Cross-docking Shelves are

Delivery
made by captured transferred sales are is used for restocked
made to the
the to Inv. used for loading with new
by the store
Mgmt. in generating merchandising merchandise
customer point-of-
warehouses orders
sale system

Data is Real-time and Shipment of

transmitted to historical data is merchandise
the supplier used for producing is made to
through
merchandise the
retailers
warehouse

Wal-Mart’s Operation Management

The supply chain management (SCM) is an extended overseeing center of the Walmart

that thinks about the incorporated impression of the organizations charmed in the formation of

merchandise and ventures, from providers to producers to the wholesalers to the retailers to the
OPERATIONS MANAGEMENT 4

unequivocal shoppers as well as an isolated place for dumping and reusing (Smithson, 2017).

This method to deal with supervision gathering and coordination's frameworks deductions for all

the organizations occupied of conveying merchandise to customers are a course of an action,

conductor, or store network. It integrates everything needed to make clients satisfied and

incorporates molding which things they will purchase, how to create them and method to

transport them. The store network reasoning verifies the given items at an acceptable cost and in

the favored area are acquired by the clients (Lu, 2014).

The mounting opposition, complexity, and geological degree in the world of business

have encouraged this extended reach and proceeding up degrees in the abilities of the Personal

Computers have formed the advancement of the store network performance reasonable.

Electronic mail, as well as Internet, have transfigured collaboration and trade of information, by

encouraging the vital stream of the data amid the organizations within the inventory network

(Lu, 2014).

Wal-Mart is a retail company that always aims to reduce its costs and in the market, they

represent the products of their suppliers in terms of dollars. This is the way Wal-Mart gets a

competitive edge over their competitors and gets more and more market share and revenues.

Wal-Mart has implemented its strategy around two major things: economies of scale and market

intelligence (Mittal, n.d). Wal-Mart has been pursuing cost leadership for long and that is why

they have implemented the strategy throughout the value chain they have. Wal-Mart’s innovation

is more focused on the augmentation of the process rather than the artifacts such as the

development of new products. Most of the companies that pursue cost leadership go for

economies of scale and they target mass markets for which they make use of established

products (Mittal, n.d).

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Problem Analysis

The large companies serving as market leaders always miss one important aspect of the

business. They are found passing on such products to the market that is of bloodthirsty quality.

They offer them at low rates so that the value proposition of their customers is dismembered.

This is a prospective area of growth for a business that will work to magnetize customers from a

specific target market of such businesses.

To know about such characteristics of their business that are given more importance by

the customers, Walmart evaluates it businesses on a regular basis. What they get from the

evaluation is useful insights as well as opportunities, which Walmart can achieve during the

course of their business. Such an evaluation might also reveal such characteristics of the business

on which the organization depends but maybe the customers do not care much about it. Dealing

with such issues require careful consideration as you have to keep a balance between the

expectations of the customers and the vital factors of a business (Befriend, 2012). What drives a

business is the expectations of the customers, if a business is able to cater to the needs and

expectations of their customer then they can easily reap considerable profits. Walmart has always

been making their strategies in alliance with their customers expect from them.

Recommendations

Wal-Mart should give more focus to their supply chain management, which will start by

accepting who their customers are, what is their worth, and what are the obligations of the

company towards them. This includes the consumers as well as the internal customers such as

employees of Wal-Mart. Wal-Mart must take measures to know what their customers expect

from their products or the services they provide. Then they must take measures in order to meet

those expectations of the customers. The supplies should come in the buying behavior of the
OPERATIONS MANAGEMENT 6

consumers. The company should adopt at such levels to their customers that their functional

measurements should also be driven by the customers. The reason behind all this that the final

customer has the ultimate control of the supply chain and they tend to get what they want (Tang

and Musa, 2011). This means if they do not like your product, services of functional activities,

your demand goes down.

Another important area for Wal-Mart to improve is their flow of information. Wal-Mart

should spend more to get the right tools for gathering information. In today’s era, data and

information is everything needed for the success of a business (Tang and Musa, 2011).

Information makes the changes and trends in the market more visible and predictable as such

changes could upset the companies at times where they do not see some factors coming yet they

get hit by them. The information assists a company makes timely decisions in a right manner.

Information illuminates the whole supply chain and makes it easy for the decisions makers to

deal with any problem arising in the flow.

For Wal-Mart most of the time, the elasticity, and modification required from them are

complex and it becomes a challenge for the employees to deal with such issues. However being

flexible has its fruits as it allows companies to make their supply chain much more efficient. The

supply chain is considered to be rigorous however Wal-Mart should take measures to systemize

the changes. They must foresee changes in the market and they should be able to adapt to those

changes. In an organization, all levels of management should be encouraged to show creativity at

their levels.

Wal-Mart should implement the system of self-checkout machines. It will allow the

customers to make procurements and then pay for it without having to require any staff of the

store. It makes the selling automated and the human resources are replaced by automatic
OPERATIONS MANAGEMENT 7

machines which reduces cost as well as the time required for selling products to a customer on

average (Fox, 2012). Some customers prefer not to be interrupted by any salesman while they

shop in a store, such customers will be more than happy to have automated selling machines.

Although there could be issues of anonymity and confidentiality yet they sales could still be

supervised. The system used for such sales are known as Remote Attendant Post which are

separate workstations made for this purpose (Fox, 2012).

Supply chain Risks

Wal-Mart faced a variety of issues in its supply chain that increases the uncertainty. Their

supplies could reach before or after the time, not on time. The number of customers can increase,

decrease or they may face the return of products. Novel consumers can give considerably large

orders. There could be barriers to the transportation of consignments (Fox, 2012). They may face

a number of issues regarding their workforce. Problems could arise regarding the value of

rejected shipment of suppliers or manufactured goods. Previously, to remove the customers'

insecurity and to increase their level of satisfaction Wal-Mart has expanded its inventory levels

but that was not a reliable solution in long-term. High level of inventory increase the storage cost

and carries a risk of product obsoleteness (Fox, 2012).

Cumulative Impact of supply chain issues

Any disturbance in the network of supply chain impacts the entire system of

supply. An example of the cumulative impact of supply chain incredibility is the consignment of

bad condition silicon received by a manufacturer of assimilated circuit boards. As his business

depends on the quality and on-time delivery of consignment from his supplier, the flawed quality

consignment delayed his order fulfillment to one of his customers, a computer manufacturer. The

computer manufacturer has to close his line of business because he is unable to access the circuit
OPERATIONS MANAGEMENT 8

boards, an integral part of his product (Robinson, 2015). Thus the computer consignment which

has to be delivered to Wal-Mart is delayed. As a result of all this, when the consumer goes to

Wal-Mart, they would be unable to find their required brand of computer. It would motivate the

customers to consider and purchase the product of another company. The time required for all

this is also worth considering. As the manufacturing and transportation take time, an accurate

identification of the bad quality silicon could take place a few months before the consumer

purchase a computer (Robinson, 2015).

Recommendations

 Wall-Mart can generate the array in its supply chain and can place it in many locations.

Any part of that inventory can be reduced or eliminated at any time so Wal-Mart could

reduce its storage cost and can increase its productivity performance. By reducing the

time period to transfer the product from one place of the supply chain to another will

reduce the overall cycle time and will enhance the customer satisfaction and Wal-Mart’s

competitiveness (Heikkilä, 2002).

 Wal-Mart can adopt the low-cost strategy due to is capacity to produce and distribute a

high-quality stock by incurring lower expenses. But cost leadership does not only

indicates the lowering of cost but also to increase the competence of the organization.

Wal-Mart can utilize its competitive cost structure to protect its market share from the

rivals who try to capture its market share through low prices.

 Wal-Mart can position itself as a cost-saving expert and can increase its market share by

translating its cost savings into lower prices. In this way, the cost savings of Wal-Mart

could also benefit its customers. Wal-Mart can also enhance its market share through

utilizing its ability to impact economies of scale (as a number of unit increases, cost per
OPERATIONS MANAGEMENT 9

unit decreases) coupled with other cost reduction techniques that Wal-Mart has the plan

to achieve (Heikkilä, 2002). As Wal-Mart increases its market share by reducing the level

of competition it would be better able to take advantage of economies of scale and it will

further reduce the cost. When Wal-Mart became able to translate the cost savings into

lower prices for its customers it could claim the pursuit of low-cost leadership strategy.

Conclusion

Wal-Mart is able to sustain a highly effective operations management. The strategies that

company followed to sustain its supply management that helped it to attain several competitive

advantage such as reduced inventory carrying costs, lower product costs, highly competitive

pricing and improved in-store variety and selection. The major reason behind the market

leadership of Wal-Mart is its strategy of providing high-quality products at fewer prices. Wal-

Mart has enhanced its purchasing power, increase its scope of operations and achieve high-cost

savings as its major competitive advantages by utilizing efficient logistics management strategy

that is based on innovative technology and proficient inventory management system. The major

weakness of Wal-Mart is diminishing prices and shrinking profit margins. As its competitors also

achieved operation level efficiencies and the US market is almost saturated with imports from

China, Wal-Mart is now exposed to price competition that decreases its profitability in some

product categories. The company is able to become a dominant force in the global market

through these strategies. Technology has played a great role in bringing the innovation to the

systems and processes and enhancing its supply chain.

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References

Befriend,S. (2012). Walmart vs. Union-Backed OUR Walmart. Retrieved from

https://www.bloomberg.com/news/articles/2012-12-13/walmart-vs-dot-union-backed-

our-walmart

Fox, E. J. (2012). Wal-Mart warns workers on Black Friday strike. Retrieved from

https://money.cnn.com/2012/11/18/news/walmart-strike-black-friday/index.html

Heikkilä, J. (2002). From supply to demand chain management: efficiency and customer

satisfaction. Journal of operations management, 20(6), 747-767.

Jacobs, F. R., Chase, R. B., & Lummus, R. R. (2014). Operations and supply chain

management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.

Lu, C. (2014). Walmart's successful supply chain management. Retrieved from

https://www.tradegecko.com/blog/incredibly-successful-supply-chain-management-

walmart

Mittal, A. Wal-Mart’s Operations and Success Strategies in International Markets: A Case

Study. Birla Institute of Technology,(Deemed University, Mesra, Ranchi) A-7, sector-1,

Noida, UP-201301.

Robinson, A. (2015). Walmart: 3 Keys to Successful Supply Chain Management any Business

Can Follow. Retrieved from https://cerasis.com/2015/05/13/supply-chain-management/

Smithson, N. (2017). Walmart: Operations Management 10 Decisions, Productivity. Retrieved

from http://panmore.com/walmart-operations-management-10-decisions-areas-

productivity-case-study-analysis

Stevenson, W. J., Hojati, M., & Cao, J. (2007). Operations management (Vol. 8). Boston:
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McGraw-Hill/Irwin.

Tang, O., & Musa, S. N. (2011). Identifying risk issues and research advancements in supply

chain risk management. International journal of production economics, 133(1), 25-34.