Wal-Mart Logistics Research Paper
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Wal-Mart Logistics Research Paper
Question One
For a long time, Wal-Mart has used strategic sourcing as it sources its products from suppliers who offer the best prices and, at the same time, those that can meet their demand. Wal-Mart ensures that there is the establishment of strategic partnerships with the vendors by offering them high volume and long term purchases for the lowest prices possible. The company uses technology in inventory management, one of the factors that have made it to be efficient and effective.
Wal-Mart’s use of vendor managed inventory model is also one of the factors that have made the company successful in inventory management. The model entails the suppliers accessing the data of the company, for instance, data relating to the current inventory levels (Jones et al. 2018). The suppliers then decide the rate at which they should supply the goods based on the data. The company then controls and monitors the goods in transit from the warehouses to the stores where they are sold.
The strategy is effective since Wal-Mart does not have to do all the activities in inventory management, but suppliers play a part, too, and, therefore, reduce costs. There are also no delays in the inventory delivery and hence no shortages and costs associated with it since the suppliers are well aware of the inventory levels. One of the problems the company has faced in inventory is the maintenance of the blue-collar workforce needed in inventory management. The company has to pay high wages to the workforce, and hence they incur high costs maintaining them.
Question Two
COVID 19 is a pandemic that affected many businesses, and as a result, some of them will never be the same. Wal-Mart has not been left out as it has been affected in different ways. The company’s inventory logistics system has been affected in ways such as the workers working at the company warehouses be ailing with the virus and hence have to stop working, thereby creating a shortfall of workers. The flow of goods from the suppliers to the stores has also been affected since there are delays.
Due to the stoppage in production for some goods and reduction in the production of some goods, most of the goods are no longer supplied in the stores at the right time or in the right quantity affecting inventory management. The supply chains have become risky since there is a need to reduce contacts between individuals, and one way of doing this is by ensuring that there is less contact between the suppliers and the workers at Wal-Mart (Lord & Saad 2020). Therefore Covid19 has affected the inventory logistics system of Wal-Mart negatively as there have been a lot of disruptions.
Question Three
One of the things that I would change after becoming the senior vice president of inventory logistics system in Wal-Mart would be managing the inventory levels fully on our own instead of using a vendor managed inventory model. Due to the COVID 19, there have been uncertainties in the levels of inventories to be maintained. Therefore it would be best to fully manage the inventories To adjust to the different needs of the consumers. Also, to reduce the risk of contact between the suppliers and the workers at Wal-Mart, it would be best if the inventory was managed by Wal-Mart instead of the suppliers (Sudrajat, 2020). The business will benefit in that they will be able to control the stock levels easily. Wal-Mart will be able to adjust to the needs of the consumers during this time. I would also reduce the number of workers in the warehouses. This would help minimize the costs and also the risks of many people contracting the virus.
References
Jones, M. A., Jones, N. A., Taylor, R. J., Fletter, M. A., & Shields, D. R. (2018). U.S. Patent No. 9,858,547. Washington, DC: U.S. Patent and Trademark Office.
Lord, P., & Saad, L. (2020). Tackling the COVID-19 Pandemic. Available at SSRN 3554436.
Sudrajat, R. (2020). Changes in Organizational Structure and Service System in Supermarkets when Pandemic COVID-19. Available at SSRN 3590980.