The operations management of Wal-Mart is supported by three values which include; working towards excellence, respect for everybody and service to its customers. Management of the company is the main support when values are integrated and it is the main retail company in the whole world. In particular, it dedicates its management to people, service delivery and the overall production which help it to operate and be competitive.
How Wal-Mart manage its operations
There are five different divisions under which Wal-Mart operates. These are wal-mart international which represents 17% of the total Mal-Mart’s revenues. It is a division which growing at the fastest rate. It has increased its net sales with more than 41% since the year 2000. Wal-Mart stores are other divisions which accounts for 55%of the total revenues of the company. The other division is the sam’s club which accounts for 25% of the total revenues.
A fee is payed by consumers on yearly basis to have access. Wal-Mart supercenters are next division generating about 10% of total revenues. There exists three supercenters which are different in the United States namely; Hyper mart USA’s, Bud’s warehouse and Wal-Mart supercenters. They store more than 40,000 items. The last division is McLane’s company which deals with Mal-Mart distribution and it represent 6%of the company’s total revenue. (Maidique, 2000)
How Wal-Mart utilize its productivity
Wal-Mart being the biggest and also the most successful supermarket globally is shedding a lot of light on what it means by innovation in practice. Because of its large operation, it is a source of employment to about 1.5 million employees worldwide. These are engaged in the sharing of responsibility for all the products in supply chain and management. Examples of the innovation Wal-Mart has made use of include; technological systems used to interconnect its suppliers networks, applications of electronic for faster delivery of service to customers. Through innovation, Wal-Mart is able to maintain high productivity and ensure the prices are low for the consumers while maintaining its 5% annual growth rate.
Inventory management and scheduling
Wal-Mart uses a computerized system to put their employees into schedules. This system ensures an optimized schedule to match employees with the demand of customers. It is the company that decides for the employee on when to work and not the customer deciding. The companies try to attain new efficiencies through this system by integrating data like the number of customers flowing in at certain hours and also how long it takes for one to sell a computer or load truck. It is then able to tell how many employees will be required at a particular time of the day. (Hopkins, 2007)
Product and service design
Initially Wal-Mart used to have excellent stocking of goods and quick delivery of services but now with no much competition as a result of many businesses closing down where it has opened branches such quality service is going downhill. It is now possible for a customer to look for an item on themselves for more than an hour simply because either there is no one to direct the customer or the item is no longer in stock.
Though there are some Wal-Mart employees who are very friendly sometimes customer has to hunt for someone to answer questions. When the designs of some product are changed for safety reasons, Wal-Mart takes the advantage and exaggerates the prices because the product has to be bought by the consumers. Wal-Mart is also failing in its delivery of services by selling old and outdated products especially when there is a change in design.
There are also complains from customers about empty boxes mixed with packaged ones without knowledge of customers and some employees lacking knowledge meaning they have not undergone training for these products. Some employees do not comply with customer service training they underwent and are rude to customers.
Wal-Mart has relatively very low prices that are about 40% lower than in other place. If amount of saving in buying from Wal-Mart was to be calculated for every household in America, it would amount to 2300 US dollars. It also provides a massive source of employment to its employees which make it to be the world’s employer with the largest number of employees. It is also the largest retailer in food in the whole nation. It is estimated that 82%of household in US make at least a purchase from Wal-Mart every year. (Shah, 2002)
Compared with other retailers, Wal-Mart pays lower wages making average earnings to fall when it enters a market. Its entry into a market usually does not create new jobs but just reduces the amount of pay taken home. As far as health benefits are concerned, they are lower compared with those of other retailers although better than those provided by small retailers. In general for Wal-Mart to be able to reduce prices for its customers, it reduces compensation for its workers.
Wal-Mart is planning to open banks in Mexico as its in-store bank. The branch will be known as Bank Wal-Mart de Mexico Adelante and will come second to gain entry in Mexico’s after Electra. Operations of Wal-Mart in Mexico began way back in 1991 when it formed a joint venture with a retail chain in Mexico. The reason why Wal-Mart easily obtained an approval to set a bank in Mexico is because of its success as a retailer which proved to meet the daily need of people in Mexico. The aim of Wal-Mart was to provide cheap financial product to Mexicans and also increase its sales.
Other operations management component
In Argentina, Wal-Mart has also opened stores and by so doing being recognized. It can now make good use of its name to open and create other markets many parts of South America. The opinion from analysts suggests that Wal-Mart has acquired a critical mass and should be able to generate a lot of profits in Argentina. It has also started reaching out into rural areas of south America where the population is more than half a million. (Govindarajan, 2001)
Govindarajan V. (2001): quest for global dominance: John Willey and sons.
Hopkins L. (2007): the influence of Wal-Mart: Wal-Mart nation.
Maidique R. (2000): strategic management and innovation: McGraw-Hill.
Shah A. (2002): strategic management concepts: Prentice Hall.