Essay Instructions: Welcome to the SLP for the third module of the course. Take a look at your organization and the way it plans its logistics operations. Then, summarize in a 3-4 page paper a discussion on the following questions.
Does your organization maximize its logistics efficiency through facility location planning? If so, in what ways, using examples? If not, could facility planning improve matters?
SLP Assignment Expectations
Research the organization with information you can find on the internet or other resources you find on your own. The paper should be 3-4 pages in length and have a cover sheet and a reference page. Clarity of presentation is important, as well as your ability to apply the topics to the logistics area of your selected firm. Use at least 3 different sources of information and annotate your sources of information appropriately on your references page and within the text as necessary. You will be assessed on how well you demonstrate your knowledge of the topic as it applies to your selected firm. Submit your assignment for grading by the end of this module
Previous background information on company below:
Wal-Mart is the largest retailer worldwide that sells a wide range of goods including food items in several countries across the globe. As a result of its growth and profitability, Wal-Mart is not only the world?s largest retailer but also one of the biggest companies in the world. One of the major factors that have contributed to the increased profitability of this company is its renowned supply chain management system. Based on its business model, Wal-Mart places significant emphasis on maintaining a highly efficient supply chain. This is mainly because the firm deals with huge inventory worth nearly $45 billion, but roughly turns it over 10.6 times annually or on a monthly basis. The other crucial components of Wal-Mart?s supply chain management include management of data and volume as well as cost leadership. These components are mainly geared towards ensuring quality management that enhances the success and profitability of the organization.
Quality Management at Wal-Mart:
Quality management has become a major issue in the modern business environment because consumers are increasingly demanding the highest quality in every aspect of a product. Therefore, for many companies it is no longer enough to concentrate on ensuring that products and services meet particular requirements. The significance of quality management is that it provides more value to the customers, which implies that it needs to become an integral part of the value chain of a company. Through an effective approach, a company can turn quality management into a strategic asset that contributes to huge profits and success.
Wal-Mart?s quality management is seen in the value of its strategic supply chain, which possess great flexibility and quality (Ketchen et. al., 2008, p.236). While the company has a sophisticated logistics system, the integration of quality management in supply chain management has enabled it to easily withstand competition and price wars from its rivals. Even though Wal-Mart is not renowned for having the best quality merchandise in the past few years, the company has carried out several initiatives to incorporate quality measures in its processes, particularly supply chain management. Since it is a retailer rather than manufacturer, Wal-Mart?s quality control measures are differentiated. In order to achieve the best quality, the company actively engages its suppliers in quality control measures. For instance, Wal-Mart requires an initial inspection of a sample before ordering merchandise from a particular supplier.
The first example of how Wal-Mart uses quality management in its logistic systems is the use of RFID technology to keep track of inventory as it moves through the firm?s system. RFID technology is one of the various technologies employed by Wal-Mart to help in its inventory management and logistics. Once the company has taken the inventory after tracking its movement in the system, it knows where to direct the inventory. The technology enables the company to enhance the efficiency of its global supply chain management and logistics system through more precise ordering decisions and improved visibility of global supply chain (Millsap, 2012). The technology is also associated with Just-in-Time (JIT) ordering, which enables the organization to lessen costs attributed to inefficient handling of and decisions regarding inventory management. Since there are a number of warehouses serving different Wal-Mart stores, the firm encourages its suppliers to use RFID technology because of the need to know how much each store needs and when they arrive at the store.
Secondly, Wal-Mart does a lot of things that Vendor Management Inventory (VMI) system does even though it does not use a VMI system. An example of these functions include high level of communication with the vendor though which the company produces a huge amount of data to support purchasing decisions. However, the vendors do not determine inventory levels because the maintenance of a highly efficient inventory system is a crucial aspect of the company?s business model. The establishment of highly efficient communication and relationship platforms with suppliers has enabled Wal-Mart to enhance the flow of material with lower inventories. The other aspect of a VMI system carried out by Wal-Mart is enabling manufacturers to assume responsibility for managing their products in the company?s warehouses (Traub, 2012). This has proven to be a major component of quality management since Wal-Mart can expect approximately 100 percent order fulfillment on merchandise and streamlined inventory management.
Thirdly, the company developed the idea of cross-docking, which implies direct transfers or merchandise from internal or external truck trailers without additional storage. Wal-Mart?s truck fleet and corps always deliver products to distribution centers. These products are delivered to distribution centers that are averagely located 130 miles from the store. Upon delivery, these goods are stored, repackaged, and distributed without being kept in inventory. Generally, merchandise will move from one loading dock to another within 24 hours while the firm?s trucks would rather return empty unsold merchandise. Cross docking is basically part of ensuring that merchandise move out of Wal-Mart?s stores as soon as possible.
In conclusion, Wal-Mart is the leading retailer across the globe because of its focus and emphasis on providing high quality products to customers across all its stores. The company achieves this goal by integrating quality management in its inventory management and logistics system. The use of quality management at Wal-Mart is evident in three ways i.e. use of RFID technology, cross-docking, and Vendor Management Inventory system. Apart from enhancing the firm?s profitability and success, these initiatives have enabled Wal-Mart to cut costs, save time, achieve faster inventory turnover, increase warehouse space, and become an innovator.
References:
Ketchen et. al. (2008). Best Value Supply Chains: A Key Competitive Weapon for the 21st
Century. Business Horizons, 51, 235-243. Retrieved June 12, 2014, from http://www.rtn.com/ourcompany/rtnwcm/groups/rtsc/documents/content/rtn_b_rtsc_wp_1.pdf
Millsap, D. (2012). Wal-Mart?s Use of RFID in Global Supply Chain Management. Retrieved
June 12, 2014, from http://www.danielmillsap.com/research/rfid-in-wal-mart-global-supply-chain-management.html
Traub, T. (2012, July 2). Wal-Mart Used Technology to Become Supply Chain Leader. Arkansas
Business. Retrieved June 12, 2014, from http://www.arkansasbusiness.com/article/85508/wal-mart-used-technology-to-become-supply-chain-leader?page=all
