Global Operations Management of Wal-Mart - Essay Example

Running Heading: Global Operations Management Global Operations Management ‘Part INTRODUCTION: There has been drastic changes in the overall scenario of the global workspace because of globalization and several technological advancements. There has been increasing competition in the international market. This has in turn resulted in the need of coming up with different methods and strategies for creating competitive advantage over the competitors. In this regard, international organizations are giving increasing importance to the operations management and global supply chain management (Min & Zhou, 2002). Apart from this organizations are also being concentrate about the total quality management and measurement in the international context. Global supply chain management focuses on the process of planning and optimizing the different international and local processes of procurement, production, and distribution. In order to manage the global or international supply chain in effective and efficient manner, it is required to integrate all supply chain partners in the overall process (Power, 2005). BACKGROUND OF THE ORGANIZATION: Wal-Mart is operating in the industry of international retailing from couple of years. Company has been in the business of providing different products and goods to the end consumers all over the world. Wal-Mart is known to be one of the largest retail organization in the global industry. Apart from different physical super stores and hyper markets, Wal-Mart has also entered into the industry or electronic commerce by offering products through online retail stores. Wal-Mart has been able to create competitive edge in the industry on the basis of considerably low prices. And for this, it has used efficient and effective supply chain strategies to increase the responsiveness of the global supply chain and at the same time increase the overall efficiency of the supply chain. Wal-Mart has been able to integrate different stages and partners of the supply chain together with the help of different technological systems like Enterprise Resource Planning (ERP) system. COMPONENTS OF ORGANIZATION’S SUPPLY CHAIN: The six components of the supply chain of organization are as follow: 1. Production 2. Supply 3. Inventory 4. Location 5. Transportation 6. Information The supply chain of Wal-Mart is more complicated because of the fact that it has to integrate different manufacturers in the whole process. For example the lets consider the example of a simple detergent provided by the company. The supply chain stages for this product can be described by with the help of following figure: (Chopra & Meindl, 2004, p. 4) Production is about producing and manufacturing different products and goods. In reference to Wal-Mart, main function of production is handled by different manufacturers and Wal-Mart focuses on the process of making these products available to the end customers (Soderquist, 2005). This component is all about exploring and investigating the needs and demands of the customers. The second component of supply chain includes strategies in order to make sure that the company is able to supply the required products to the end customers. In the case of Wal-Mart, the component of supply is treated as an important outsourcing process. This component is one the most crucial element of the supply chain of Wal-Mart. The company works hard in order to ensure the timely supply to the end consumers and maintaining high quality at low prices. Hence, Wal-Mart has to careful in the process of selecting suppliers. Inventory, the third component of supply chain, is also important for efficient and effective supply management. It is important for Wal-Mart to manage the inventory and stocks in order to ensure that the needs and demands of the customers are fulfilled (Soderquist, 2005). Location holds significant place in the overall global supply chain management. For instance, Wal-Mart has to be considerate about the ease of availability while deciding for the locations of different retail stores and super markets (Soderquist, 2005). Apart from this the company has to consider the economic condition of the people in a certain location before opening any store over there. Transportation is important for ensuring timely delivery of inventories and stock, thus ensuring high customer satisfactions. Owing to the importance of transportation, Wal-Mart has its own transport fleet along with different third party transporters (Soderquist, 2005). Lastly, the performance of all other components of supply chain is directly dependent on the availability of information. With the help of information, company is able to link all supply chain processes and in turn provides the end customers with the required products (Williamson, Harrison, & Jordan, 2004). Wal-Mart is able to integrate all supply chain partner with the help of efficient information system (Soderquist, 2005). POTENTIAL PROBLEMS WITH THE COMPONENTS OF ORGANIZATION’S SUPPLY CHAIN AND APPROACHES TO SOLVE THESE POTENTIAL PROBLEMS: Although Wal-Mart has one of the best global supply chains in the world, it also has to face different issues and problems associated with different components of supply chain. For instance, in term of production, the company has to cope up with changing needs and demands of the end customers. This issue can be solved by conducting timely surveys in order to monitor the changing demands and needs. Along with this Wal-Mart is using RFID system in order monitor the sales (Soderquist, 2005). In term of supply, Wal-Mart has to be cautious in the process of selecting suppliers in order to ensure the cost efficiency and responsiveness of the global supply chain. There can be issues like maintaining the standards of quality, price, flexibility, etc. in the process of selecting suppliers. This issue can be solved by forming partnerships and alliances with the suppliers and controlling the overall process of supply. There can be several issues in the process of inventory management. It is essential for the organization to monitor and maintain the level of stocks and inventory to be able to meet the demand. For this purpose, organization can use different information system and technology in order monitor the sales and link the process of procurement with it. Location of the stores should be selected keeping in mind different factors like preferences of the consumers and distance of the location from the distribution centers. There should be proper integration among the distribution centers and the end stores. Wal-Mart has created different distribution centers and have located the retail stores near to these centers (Soderquist, 2005). In order to maintain the responsiveness of the supply chain, the organization should be able to manage the timely transportation of the products and inventories to the stores. For this purpose there should be proper transportation and logistics strategy. Wal-Mart has been using combination of different internal and external transporters in order to manage this component of global supply chain management (Soderquist, 2005). As all other components of global supply chain are dependent on information, it is important to manage this component efficiently and effectively. These is high possibility that because of lack of proper information, organization is not able to meet the demands of the market. For this purpose, there should be proper Enterprise Resource Planning system which integrates and connects all partners and components of the supply chain. Wal-Mart has been able to create one of the best supply chain in the retail industry because of the efficient use of different technological tools and information system (Soderquist, 2005). Apart from this it is important to implement the concept of total quality management and lean six sigma in order to ensure continuous improvement in overall global operations and supply chain network. REFERENCES Chopra, S., & Meindl, P. (2004). Supply Chain Management. 2nd Ed. Upper Saddle River, NJ: Pearson Prentice Hall Min, H, & Zhou, G. (2002). Supply chain modeling: past, present and future. Computers & Industrial Engineering, 43(1-2), 231-249. Power, D. (2005). Supply chain management integration and implementation: a literature review. Supply Chain Management: An International Journal, 10(4), 252-263. Soderquist, D. (2005). The Wal-Mart Way: the inside story of the success of the worlds largest company. Nashville, Tennessee: Thomas Nelson. Williamson, E., Harrison, D., & Jordan, M. (2004). Information systems development within supply chain management. International Journal of Information Management, 24(5), 375-385 ‘Part 2’ CUSTOMER NEEDS AND EXPECTATIONS: Customers or clients of Wal-Mart needs high responsiveness from the retailer in order to fulfill their demands. Apart from this, customers want all the products at lower possible cost as promised by Wal-Mart. It is also important for the organization to consider that the customers have become more considerate about the social responsibility of the organization towards the environment and demands more sustainable and greener practices and solutions. OPERATIONAL SYSTEMS USED: Wal-Mart has been using different operational systems in order to control and manage the global operations. Company has been able to implement efficient and effective information system and different technological tools like RFID in order to perform different operations (Soderquist, 2005). TOTAL QUALITY MANAGEMENT: From the very start, Wal-Mart has been focusing on the concept of total quality management and has ensured that all processes are performed according to the standards. The company has been considerate about the increasing concern about protecting the environment and thus have come up with green and sustainable supply chain all over the globe (ECORYS). With the help of total quality management processes and continuous improvement, Wal-Mart has been focusing on providing the customers with high quality products at low prices (Soderquist, 2005). BENEFITS OF TOTAL QUALITY MANAGEMENT TO THE ORGANIZATION: With the help of implementing different total quality management techniques, Wal-Mart has been able to continuously improve the global operations and supply chain. Which in turn has facilitate the organization in the process of providing customers with products at low prices and at the same time maintaining the quality of the product. Wal-Mart has been able to reduce the cost of the overall global supply chain and at the same time increase the overall responsiveness with the help of total quality management (Soderquist, 2005). REFERENCES ECORYS. Wal-Mart Stores, Inc.; Improving components of the supply chain to reduce cost and environmental impact. Freight Transport for Development, a policy toolkit. Retrieved 8 December 2011 from http://www.ppiaf.org/freighttoolkit/sites/default/files/casestudies/Walmart.pdf Soderquist, D. (2005). The Wal-Mart Way: the inside story of the success of the worlds largest company. 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