Issues in Wal-Mart business Operation-Free-Samples for Students

Question: Discuss about the Various Issues in Wal-Mart business Operation. Answer: Introduction Operation management is a practice of bringing highest efficiency in a business by utilizing the resources in a proper way. Transformation of the material and the labor into goods and service is the basic process of business operation (Christopher 2016). It is the prime duty of the operation management to keep a balance between the operation cost and the revenue to achieve the highest profitability in an organization. This study deals with the operation management of in the context of Wal-Mart. However, Wal-Mart is an American multinational retail corporation having a chain of the hypermarket. Based on the revenue Walmart is considered as the largest organization in the world. This organization offers the largest grocery to the customers in USA and different countries in the world. This current study will focus the strategic issue, quality management issue and other operational issues in Walmart (walmart.com, 2017). Discussion of the problems regarding the strategy, inventory, quality management, location planning and design of Wal-Mart One of the vital business strategies of Wal-Mart is to dominate in the retail industry. Therefore, to expand their business in U.S and the global market is another strategy of Wal-Mart. Apart from this company recognition and development of the positive brand is other missions of this organization. However, there are some drawbacks in such strategy one of the most important is out of the small business from the markets as due to the dominance of Wal-Mart such small enterprises are not able to afford low price and diversification of the goods (Businessinsider.in, 2017). On the other hand, the business system of the Wal-Mart takes a giant form and differentiates into various departments including electronics, pharmacy, and grocery. This is hard to operate properly for Wal-Mart. Therefore, Wal-Mart is expanding their business both locally and internationally, which brings fear for the other organizations in the same market segment. Quality management of Walmart includes some problems, however, this organization has three tiers of quality standards in the operation management. The lower tier is used for its maximum brands based on the minimum demand of a large number of customers. On the other hand, middle tier is applied to the employees especially for the sales executives to determine their performance (Shabbir, 2017). This is a problem, as here the performance of the sales personnel can be determined not all employees. Next, the upper tier is used for the minority outputs of Walmart this creates a problem for the other brands of Walmart. Wal-Mart follows vendor-managed inventory model and cross-docking inventory management both are beneficial for the suppliers to use the information system of Wal-Mart to deliver the product and to minimize the inventory size. One of the major problems of vendor managed inventory system is it is very common in all business and the stakeholders have to give much time for this inventory management (Fredendall Hill, 2017). On the other hand, the suppliers often fail to give finished product to the customers through cross docking inventory management. Location planning and design of the product includes some problems in the context of Wal-Mart. Wal-Mart establishes their stores to the urban areas to expand their market and make the product available to the target customers. They also use online information system to get real-time information (Ji, Gunasekaran Yang, 2014). However, such location strategy of Wal-Mart only based on the urban areas and the target market and there is no account of the expansion of location for the customers of rural area. On the other hand, this firm follows the design process that allows for mass production. However, there is lack of creativity in the Wal-Mart design process. Identification of the problems of quality management and the location planning in context of Wal-Mart Primary issues Wal-Mart has been facing from quality management and location planning issues that are the two major areas of the operational management. Quality management issue There are three tires in the quality management system of the Wal-Mart. The lower tier focuses on the minimum expectations of the customers regarding the quality of the product and supply chain management. However, this tier is applicable for the maximum brands of the Wal-Mart. Therefore, the middle tire focuses on the average quality of the low-cost retailer (). However, the performance of the sales executives can be measured by this tier while this tier is not applicable to measure the performance of all employees that is a big issue of such quality management standard. On the other hand, the upper tier of Wal-Mart is only applicable for the products of Sam's Choice brand. Hence, this is a major drawback of Wal-Mart's quality management process as this upper tier is only used for the specific brand, not for the other brands. On the other hand, Wal-Mart focuses on the low price and with huge production, as a result, it often difficult for Wal-Mart to give a good quality product in l ow price to the customers. However, the operation cost is high in the supply chain management that hampers the business of the Wal-Mart. Therefore, Wal-Mart has a huge number of stores and their investment in the operation management is too high, which also affects their quality management process as they often fail to manage the stock in all stores. Apart from this vendor managed inventory and cross-docking are the two inventory management process of Wal-Mart however, in the cross-docking process often this organization fails to give ready products to the customers that affect the quality process of this organization (Huchzermeier, 2016). Location planning issues Location planning is a big part of the operation management in an organization as based on this the sales of the organization can be measured (Hill, Jones Schilling, 2014). In the context of Wal-Mart, their location strategy focuses on the establishment of the stores in or near the urban area. This allows the organization to reach the target market, as goods are available to the target market through this location strategy (Xu et al., 2014). However, the establishment of the stores only the urban area is a major weakness of the Wal-Mart as it is necessary for them to establish their stores in the rural areas also. Due to the development of stores in the urban location, this organization fails to cover the customers of rural area that affects their market share and profitability. Wal-Mart has 11,695 stores worldwide and their store volume is large that maximizes their investment. However, only the target customers of the urban areas get facilities by their location strategy that is t he major drawback of their location planning. Other issues of Wal-Mart in operation management Secondary issues Expansion of the Wal-Mart both nationally and internationally is a big barrier to their operation management. However, such strategy of Wal-Mart forces other small organizations to out of the market, as it is difficult for them to afford low price and differentiation of the products. As a result, such small organization becomes their competitors, which affects their business. Apart from this Wal-Mart uses children for the work in the developing country that is a big drawback of their operation process which highlights the lack of social responsibility of this organization (Nguyen, 2017). Hence, use of the child labor in the developing country hampers the social image of such organization. Such issues hamper the business of the Wal-Mart as well as their social responsibility that also affects their brand image. Discussion of the alternatives to resolve the problems of Wal-Mart regarding the quality management and location planning Total Quality Management TQM or total quality management is a good process to improve the quality of the organization (Aquilani et al., 2017). This approach enables the organization to establish a permanent climate to produce high-quality products and the service. In the context of Wal-Mart there, some major issues in their quality management system regarding the poor inventory management, performance measurement and produce high-quality products with low price. Application of TQM enables an organization to understand the customer's requirements. Hence, it will help Wal-Mart to offer the product based on the demand of the target market. TQM will help Wal-Mart to reduce the cost that is one of the objectives of Wal-Mart. On the other hand, customer satisfaction is another benefit of TQM that can be achieved by the Wal-Mart. However, customer satisfaction is associated with the customer demand (Pun Yiu, 2017). Wal-Mart can reduce the time to fix the error by the application of TQM. This gives the quality assu rance of the team performance in Wal-Mart. Hence, the Total quality management system is crucial for such organization to manage the quality of the supply chain and reduce the operation cost in the business (Huchzermeier, 2016). Hence, adoption of TQM will be beneficial for the Wal-Mart to maintain the quality of the business operation. Apart from TQM providing training to the employees is another effective process to reduce the issue of quality management (Winterhalter, Zeschky Gassmann, 2016). However, proper training to the employees will help them to manage the inventory by utilizing the technology, which ensures the quality of the operation management. Establishment of the small stores to get a big win Wal-Mart has established many stores in the urban areas and their stores are large as a result they have to invest more for such stores. On the other hand, an opening of the large store in the urban areas resists the people of the rural area to get access to the Wal-Mart business. However, it is important to a business organization to develop more and small stores in every location to enhance their business (Linder Williander, 2017). In the recent years, Wal-Mart has started to open the neighborhood smaller market. This will be an effective alternative way to minimize the issues regarding the location planning. This alternative way gives a bright spot to such retail organization to earn more form their investment. According to the statistical data, the sales revenue generation of Wal-Mart is increased by 7.9% after the implementation of this location planning (Cnbc.com, 2017). 15 neighborhood market stores have established by Wal-Mart to reduce the issues regarding their location st rategy. However, this alternative also reduces the investment cost of Wal-Mart that is expanded during the establishment of a large store. On the other hand, development of small stores in the different location will maximize the accessing power of the customers. Apart from this establishment of the stores in the rural areas will be effective for Wal-Mart to enhance their business by minimizing issues regarding location planning. This will enable the customers of the rural areas to purchase the products from Wal-Mart and it also increases the sale (Ramanathan, U., Subramanian, Yu Vijaygopal, 2017). Advantages and disadvantages of the alternatives regarding the issues of quality management and the location planning TQM or total quality management strategy is effective for Wal-Mart to resolve the issue of their quality management. This approach has both advantages and the disadvantages. However, TQM provides assurance of the better quality performance and it reduces the operation cost of the business (Hossain, Tasnim Hasan, 2016). This approach enables Wal-Mart to gain competitive advantages, as by the application of such strategy Wal-Mart is able to understand the current demand of the customers in the market. However, by restoring the method of TQM Wal-Mart will be able to reduce the competition in the market. One of the major drawbacks of TQM is the high cost. However, this technique is expensive to implement (Wrigley Wood, 2017). Therefore, it is a long-term process and takes more time to show outcomes. On the other hand, the organizational culture of Wal-Mart needs to be changed for the implementation of TQM as it focuses on the continuous improvement. Training process is good for Wal-Mart to improve the technical skills of their employees and it will help them to manage the quality of the supply chain management. However, training program is costly, which increases the operation cost and this is the major drawback of such alternative. Establishment of the small stores will help Wal-Mart to increase the sales revenue generation and to reduce the investment. However, often the small stores become crowded and it is difficult to manage a large inventory in the small stores (Fiorino Bhan, 2016). On the other hand, opening of stores in the rural areas will increase the number of customers for Wal-Mart however, it is difficult to transport the product to the rural areas and shipping of goods is also critical. Explanation of the best solution TQM is the best solution between the two solutions of reducing the issues regarding quality management (Aquilani et al., 2017). However, TQM reduces the operation cost and enables Wal-Mart to identify the current demand of the market while training only improves the employee skill. On the other hand, the establishment of small stores in urban areas is beneficial than establishment of stores in rural areas. However, purchasing power of the people is greater in urban areas rather than rural areas. Thus, launching of more small stores in the different locations of urban areas will be effective for Wal-Mart Recommendations Performance measurement is a good process to manage the quality of Wal-Mart as it will make the employees more effective. Use of modern technology will be helpful for Wal-Mart to improve the quality management process as it enables the employees to manage the inventory properly. Establishment of the stores in high traffic areas can be effective for Wal-Mart to improve the location planning process. Increasing the availability of the stores in each location will reduce the problem of location planning in the context of Wal-Mart. Conclusion This entire study focuses on the operation management of Wal-Mart and problems regarding the location planning and the quality management. However, TQM and establishment of the small stores are beneficial for this organization to minimize such operational issues. The product's design of such organization includes a unique way that is beneficial for the mass production. On the other hand, quality of the product of Walmart is high that easily gain the customer attention. TQM will enable such organization to maintain their service quality. 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