Operation Management Of Walmart

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able Of Contents Pages

1. Company overview and introduction 3

2. Design of Goods and Services 4-5
3. Inventory Management 6-7
4. Supply Chain Management 8-9
5. Layout Design 10-11
6. Quality Management 12-13
7. Location Selection 13-14
8. Conclusion 14
9. References 15
 Company Overview and Introduction

Walmart is an American multinational retail corporation that runs chains of hypermarkets,

(also called supercentres), discount department stores, grocery stores, and warehouse
stores in the United States, headquartered in Bentonville, Arkansas. The company was
founded by brothers Sam and James “Bud” Walton in Rogers, Arkansas in 1962 and
incorporated on October 31, 1969. Walmart is known for its “everyday low prices” and its
large variety of products including electronics, clothing, home goods, groceries, and
pharmacy items, etc. The company developed new retail formats, including Sam’s Club
discount warehouses in 1983 and Walmart Supercentre in 1988. Within a decade of opening
the combination grocery and merchandise Supercentre, Walmart had become one of the
largest grocers in the United States. An emphasis on customer attention, cost controls, and
efficiencies in its distribution networks helped Walmart become the largest retailer in the
United States in 1990.

As of October 31, 2022, Walmart has 10,586 stores and clubs in 24 countries, operating
under 46 different names. The company operates under the name Walmart in the United
States, including the 50 states and Puerto Rico. Mexico as Walmex, United Kingdom as Asda,
etc. It has wholly owned operations in Argentina, Brazil and Canada. Walmart is the largest
private employer in the world with more than two million employees also the largest retailer
in the world. Walmart remains a family-owned business, as the company is controlled by the
Walton family. It is also one of the world’s most valuable companies. The company publicly
traded on the New York Stock Exchange in 1972. Now Walmart is the most profitable retailer
in the United States.

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 Design of Goods and Services

Walmart is the largest grocer and the most profitable retailer in the United States, Walmart
have offered different types of goods and services. Walmart Supercentre offers a one-stop
shopping experience by combining a grocery store with fresh produce, a bakery, a deli and
dairy products with electronics, apparel, toys, home furnishing, books, shoes, art and crafts
and etc. The brands under Walmart have provided different types of goods and services.
Major brands under Walmart include Wonder Nation, K Alexander, Sam’s Choice, Great
Value, Equate, OI’ Roy, Special Kitty, Parent’s Choice, Play Day, etc. Customers can find
children’s clothing, shoes, and accessories at Wonder Nation and K Alexander. Sam’s Choice
is a retail brand in food and selected hard goods. Most of the Sam’s Choice beverage
products are manufactured for Walmart by Cott Beverages. Other products in the line,
including cookies, snack items, frozen meals, and similar grocery items are made by a variety
of agricultural and food manufacturers. Equate is a brand used by Walmart for consumable
pharmacy and health and beauty items, such as shaving cream, skin lotion, over-the-counter
medications, and pregnancy tests. OI’ Roy is Walmart’s brand of dog food created in 1983
and named after Sam Walton’s dog. It has become the number-one selling brand of dog food
in the United States. Special Kitty is Walmart’s brand of cat food and other cat care products,
such as litter and treats. Parent’s Choice is Walmart’s brand of diapers, formula, and
accessories. The Play Day is a wide-ranging brand of budget-priced children’s toys. Walmart
also provides a variety of services including retail goods, pharmacy, financial, wireless, and
photo lab services, etc. Walmart offers retail goods that customers can buy different types of
electronic products such as MP3 players, digital cameras, printers, laptops, and computers.
Walmart also offers music downloads, movies, books, and jewellery. In-home addition to
home furnishings, Walmart also offers baby products, sporting goods, and grocery items.
Walmart offers photo lab services inside stores and online. Customers can drop off their
photographs for development via a store kiosk. They can also upload their digital photos via
the corporate website and pick them up at the store location or send them to their home
address. In 2006, Walmart Pharmacy began offering customers prescriptions for a mere $4.
Walmart offers monthly prescriptions for pickup in-store or mail-order services for long-term
medications. The savings are due in large part to Walmart’s catalogue of over 300 generic
medications available for $4 in-store or $10 for a 90-day supply. Walmart has offered several
financial services. These include credit cards, debit cards, bill payments, money transfers,
etc. Walmart offers a store credit card without an annual fee. Obtain a debit card in-store or
online. Walmart offers money transfer services through MoneyGram, starting at $4.75.
Customers also can purchase money orders and gift cards, send bill payments, and order
printed checks and cash checks for fees starting at $3. Walmart partnered with service
provider T-Mobile to offer wireless phone service. The Walmart Family Talk Wireless service

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provides customers with a family plan for unlimited text and voice calls. The service requires
no traditional yearly contract and plans start at $45. Walmart’s also offers grocery pick-up
and delivery services, that customers can order grocery at Walmart online shopping platform
and choose delivery services or pick them up at nearby Walmart’s pick-up stores.

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 Inventory Management

Walmart’s inventory management is a key success factor in the firm’s ability to grow to its
current industry position as the leading retailer in the world. The company’s strategies for
various business areas are linked to inventory management in terms of how strategic
approaches support or exploit benefits brought through innovations in inventory activities.
Walmart’s success in managing its inventory is partly due to the effective implementation of
the vendor-managed inventory model. In this model, suppliers access data from the

company’s information systems, such as data on current inventory levels and the rate at
which certain goods are sold. Suppliers decide when to send additional goods to Walmart,
while the company monitors and controls the actual transit of goods from warehouses to
the stores. This strategy shifts some of the inventory control activities onto the side of the
suppliers. Walmart uses many types of inventories, each with a corresponding set of
management approaches, strategies, and tactics. The following types of inventories are
some of the most notable in Walmart’s practices are finished goods inventory, transit
inventory, buffer inventory, and anticipation inventory. The finished goods inventory type is
the most significant in Walmart’s business. Finished goods arrive at the company’s stores,
these goods at stored, and the inventory is replenished regularly. The role of this type of
inventory is to support Walmart store operations, where the finished goods are moved from
company’s merchandise distribution centre to be sold to the retail buyers at the stores.
Walmart uses the transit inventory type as the second most significant in supporting its retail
operations. This type of inventory refers to the goods that are held while in transit. The
global extent of Walmart’s supply chain means that some goods are in transit for days or
weeks. The role of this inventory type is to support the replenishment of the finished goods
inventory in the merchandise distribution centre and Walmart stores. Walmart uses different
methods to manage its inventory. Just-in-time inventory is the application of the JIT method
to inventory management. This method involves measures and activities for the operational
objective of minimizing storage and related costs. At Walmart, the JIT inventory method is

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applied in the form of cross-docking. In cross-docking, suppliers’ trucks and the company’s
trucks meet at the company’s warehouses or merchandise distribution centre. Goods are
transferred from the suppliers’ trucks directly to Walmart’s trucks, which deliver the goods
to the stores. The main benefit of cross-docking at Walmart’s warehouses is the
minimization of inventory size. Fewer goods are stored at the warehouses and a smaller
inventory is less costly to maintain. Also, cross-docking enables Walmart to quickly deliver
goods to the stores. This condition enables the firm to rapidly respond to fluctuations in
demand and related changes in the market. Thus, this method of inventory management
supports Walmart’s operational efficiency and business resilience. Walmart’s vendor-
managed inventory model minimizes the cost of managing inventory because some of the
cost is transferred to the suppliers. The combination of the finished goods inventory, transit
inventory, buffer inventory, and anticipation inventory support the company’s cost
leadership generic strategy through cost minimization. Walmart’s cross-docking as a form of
the just-in-time inventory method also helps reduce inventory costs by minimizing inventory
size. This combined approach supports the company’s profitability and financial soundness.
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Supply Chain Management

Walmart has become the world’s largest and arguably most powerful retailer with the
highest sales per square foot, inventory turnover, and operating profit of any discount
retailer. In its transition from regional retailer to global powerhouse, the organisation has
become synonymous with the concept of successful supply chain management. The
company focused on developing cost structures that allowed it to offer low everyday pricing.
The supply chain management of Walmart is among the most efficient and reliable
transportation networks. The company manages a complex network of over 1,000 suppliers
and 158 distribution centres located across the globe, delivering more than two billion
products to its stores every week. To achieve this, Walmart uses a sophisticated supply chain
management system that includes technology, processes, and people. At the heart of this
system is Walmart’s Retail Link system, which serves as a digital hub for connecting suppliers
with Walmart’s inventory management systems. The system gives suppliers real-time access
to data on inventory levels, sales trends, and customer demand, enabling them to modify
production schedules and distribution plans accordingly. In addition to the Retail Link
system, Walmart also uses advanced analytics and predictive modelling to anticipate future
demand for products and to optimize supply chain operations. This includes analysing sales
data to identify trends and patterns, forecasting demand for individual products, and
predicting the impact of external factors such as weather events or changes in consumer
behaviour. Walmart’s supply chain management also includes strict quality control and
sustainability measures, such as monitoring suppliers’ compliance with ethical sourcing and
environmental standards. Overall, Walmart’s supply chain management is characterized by a
relentless focus on efficiency and innovation, enabling the company to keep prices low,
improve the customer experience, and stay ahead of competitors. Walmart’s also has some
system and technology, Walmart’s warehouse management system technology to streamline
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operations within its distribution centres. The system helps manage inventory, automate
processes, optimize picking and packing, and track products throughout the distribution
centre. Walmart’s uses Radio-Frequency Identification technology to track and manage
inventory in its stores and distribution centre. RFID tags are placed on products, enabling
automated tracking and real-time visibility into stock levels, reducing manual efforts and
improving inventory accuracy. Walmart’s has implemented systems to monitor and ensure
compliance with sustainability and ethical sourcing standards across its supply chain. This
includes tracking suppliers’ adherence to responsible sourcing practices, environmental
impact reduction, and social responsibility initiatives. These systems and technologies are
integral to Walmart’s supply chain management strategy, helping the company maintain
efficiency, visibility, and responsiveness across its supply chain operations.
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Layout Design

Walmart started implementing a new layout across 1,000 stores in 2022. Despite a strong
customer base and plenty of business from online sales, the retailer wants to continue to
impress and draw new customers into its physical stores. To pursue this goal, Walmart is
changing store layouts to be more appealing. Walmart store is designed with convenience in
mind, so customers can find, choose, and buy whatever they need quickly and easily.
Walmart has repeatedly used the phrase “omni-shopping experiences” to describe what it
aspires to provide to customers. The company’s initial phase focused on design for both the
in-store and digital shopping experience, including aspects to make the store easier to
navigate. First, Walmart updated the interior and exterior signage to be more connected to
the Walmart app. Bold typefaces were posted in the food department such as Beef or Dairy,
and aisles were clearly marked with letter and number combinations to aid customers using
the app to shop in-store. The company worked to create a design similar to that of an
airport, with the goal of helping customers navigate easily through the store. To the chagrin
of customers who hate using self-checkout, Walmart added more no-contact ways to check
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out. Self-checkout kiosks were added in many stores, along with Scan and Go in certain
areas. After Walmart renovated 1,000 stores with those initial changes, it began adding
more features including activated corners. These are displays at the corners of certain
departments that offer customers the chance to touch or feel products. For example, the
home section might have a set-up of a bedroom or living room where the customer can truly
visualize and feel the space with products for sale. Walmart says that in its new spaces such
as activated corners and elevated brand shops there will be more room for customers to
explore. It also stated that “we’ve optimized assortment to elevate storytelling that draws
customers in.” Walmart’s announcement noted, “Using our stores as an initial display of the
great variety of products and brands, we can communicate to customers the vast range of
products and services Walmart offers online through the strategic use of QR codes and
digital screens.” Customers can therefore scan QR codes to find out about more products not
shown that could be delivered. Walmart store layout is designed to create a comfortable and

easy shopping experience for customers. It is organized by category, with each department
arranged to guide customers through the sections. Additionally, the store’s shelves are
generally kept low to allow for easy access and to ensure that everything is visible from a
distance.

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 Quality Management

Walmart has established a set of quality standards for its products and services to ensure
that they meet ethical, legal, and safety requirements. These quality standards include
product and ingredient testing, social responsibility, sustainable sourcing, and food safety
are designed to ensure that Walmart’s products and services meet or exceed customer
expectations. Walmart requires all suppliers to conduct product testing and ingredient
verification to ensure the safety and quality of their products. This includes testing for
physical, chemical, or performance testing, depending on the product category of potential
contaminants and harmful substances. Walmart expects its suppliers to conduct their
business in a socially responsible manner. This includes compliance with all local laws and
regulations, as well as adhering to ethical and humane practices in their supply chains.
Walmart is committed to sustainable sourcing and expects its suppliers to adhere to strict
environmental standards. This includes reducing greenhouse gas emissions, waste reduction,
and sourcing materials from sustainable sources. Walmart maintains strict quality controls
on all of its products to ensure that products are properly labelled, packaging is correctly
applied, and products are free from defects. Walmart has established strict food safety
standards to ensure that all of its food products meet the highest safety standards. Walmart
monitoring suppliers’ facilities, creating food safety plans, and conducting regular
inspections and audits. Walmart’s also provide extensive training to its employees to ensure
that they have the skills and knowledge to recognize high-quality products issues, service,
and are empowered to take corrective action when necessary. Overall, Walmart’s approach

to quality management is comprehensive and proactive. The company places a strong

emphasis on collaboration with suppliers, training for employees, and continuous
improvement to ensure that its products and services meet customer needs and
expectations. By setting high standards for quality and safety and working collaboratively
with suppliers, Walmart is able to maintain a reputation for excellence in the marketplace.
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Location Selection

Walmart looks for a specific area where the population has grown enough to warrant a
store, and the consumer demographic in the area should fit well with their needs. A
combination of census data and market research will help Walmart’s team determine the
best place to build a store that meets their criteria and provide the best return on
investment. Walmart considers the existing customer base, that means looking at the
population in the immediate area and determining how many people live nearby that could
potentially shop at the Walmart’s store. This can include everything from residential areas to
nearby businesses and even institutions such as universities. Walmart also considers
transportation infrastructure of the area that are easily accessible by car, have access to
public transportation, and are close to the major highways. Also, Walmart will look at local
zoning laws and restrictions when selecting a location. Zoning laws regulate how land is used
and what activities can occur in different areas, it must be approved by local zoning
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authorities. Local zoning boards may also require that Walmart provide parking spaces and
make any necessary improvements to roads or other infrastructure. Walmart may also face
opposition from local residents if proposed store location is in an area that they feel would
adversely affect their quality of life. For example, in some areas, there may be concerns
about increased traffic, noise, or pollution. It’s important for Walmart to work with local
residents and officials to ensure that their store will have minimal negative effects on the
local community. Walmart also looks for locations where estate costs are relatively low. The
company often targets areas that are undergoing economic revitalization, which can result in
more affordable real estate prices. Overall, Walmart’s store location selection is designed to
maximize customer convenience while also minimizing costs.

Conclusion

In conclusion, Walmart is an American multinational retail corporation that operates chains

of different types of stores and become one of the largest grocers in the United States. The
operation management of Walmart’s success can be attributed to a combination of effective
management practices that allow the company to efficiently serve its customers and manage
its costs. Walmart has a highly effective operations management system that enables the
company to streamline its processes, reduce costs, and improve customer satisfaction.
Walmart’s also innovative use of technology and data analytics has been a key driver of its
success, allowing it to optimize its operations and respond quickly to changing market
conditions. Also, the company’s global sourcing and distribution capabilities have allowed it
to become one of the world’s leading retailers, with a presence in 27 countries and more
than 11,000 store worldwide. Overall, Walmart’s operations management practices are
characterized by a strong focus on maximizing efficiency, reducing waste, and optimizing
processes to enhance the customer experience. The company’s success in these areas has
made it a model for other retailers and a leader in the industry.
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References

 https://panmore.com/walmart-operations-management-10-decisions-
areas-productivity-case-study-analysis updated on July 23,2023 by
Nathaniel Smithson
 https://en.wikipedia.org/wiki/Walmart
 https://ivypanda.com/essays/walmart-design-of-goods-and-services/
updated on August 5, 2021
 https://panmore.com/walmart-inventory-management updated on
July 22, 2023 by Roberta Greenspan
 https://inventooly.com/blog/understand-walmart-inventory-
management-process updated on January 26, 2022 by Touseef Riaz
 https://www.supplychain247.com/article/
incredibly_successful_supply_chain_management_how_does_walmart
_do_it updated on December 5, 2014 by Clara Lu
 https://www.liquidimageco.com/why-are-walmart-layouts-different/
By Tony Havelka
 https://www.studymode.com/essays/Walmart-Total-Quality-
Management-77047534.html By Matthew Piga
 https://shipguruusa.com/how-walmart-choose-locations-new-stores/
#:~:text=When%20Walmart%20is%20choosing%20a%20location%20for
%20a,get%20to%20the%20store%20and%20access%20its%20services
updated on March 9, 2023 By Alexandra Smith
 https://studycorgi.com/walmart-stores-operation-management/
Updated on December 22, 2021