Operations analysis is a designed business strategy used by organizations to determine whether the overall operational structure adheres to the proposed business plan adopted and utilized by the organization (Tatum and Bronwyn). The supply chain operations form a vital area in any business because it involved the supply and delivery of goods and services offered by a given company. There has been a rapid evolvement in the discipline of supply chain management creating many challenges to the current and future managers who have to move at the same rate the new analytical techniques are moving
WAL-MART BACKGROUND INFORMATION
Wal-Mart Stores Inc. was started by Sam Walton in 1962 as a simple store in Rogers. The company grew drastically and by the year 1967, it had 24 stores in Arkansas earning more than 12.6 million dollars in sales. The store continued to expand and opened other stores in towns outside Arkansas like Montana, Oklahoma, Claremore, and Sikeston in 1968. The company was officially branded Wal-Mart Stores Inc. in 1969 and opened the first distribution centre in 1970. The company continued to open other distribution centers across the United States and eventually expanded globally to its current position. Presently, the company has over 90,000 suppliers out of which, 200 are global suppliers.
WAL-MART SUPPLY CHAIN
The need to meet customer demands at a reduced price drives its supply chain management capability. The success of Wal-Mart in the business started in United States where the company purchased manufactured products at low cost and ended up passing its savings to customers. With the above move, the company expanded to different parts in America and eventually created worldwide markets. The following strategy has made Wall-Mart become a multi-billion dollar company today. In order to ensure efficient supply and delivery of products to customers, the company has collaborated with global suppliers who implement their retail link systems enabling them expand their productivity (Johnson 22).
WAL-MART SUPPLY CHAIN PROBLEMS
In order to cope with the challenging supply chain management practices, the company initiated the Information Technology (IT) based supply chain management practices. The company developed a voice based technology, a low cost Radio Frequency Identification System (RFID) aimed at enhancing logistics and warehouse management. Using Firstly, technology keeps changing from one form to the next as days pass by. There are specific global standards that also keep on changing year in year out. Wal-Mart could face the challenge of adapting to the current global standards that vary between different regions in the world. This type of technology, the company could replenish stock at any of its stores in US within 24 hours.
The company faces problems associated with data management. Technology requires experts and professions to deal with different issues arising especially for a multinational company like Wal-Mart. Lack of proper information management tools makes it difficult for the company to realize the full potential of RFID system. Implementation of IT supplies chain systems were estimated at 20 million US dollars.
Sensitivity analysis refers to an investigation of the potential changes on the parameters of a model, their possible errors, and their impact towards the organization in question. From the model, we may want to vary the cost of implementing these strategies in order to spend more, but come up with a more effective system. On the other hand, the installed systems require data management skills that can only be outsourced by the company. The company can increase the budget allocated for improving the IT services and hire external IT experts to carryout weekly checks on the system. In addition, the changes in government standards for different nations also affect the company. These are some of the constraints discusses in the sensitivity analysis. After the analysis, the company should look for backup software that can play the same role as the original system in case of change in standard codes.
The organization should implement strong supply chain technology that cannot be affected by the future IT changes. This entails using high-tech gadgets for communication and location that are compatible to different environments and business strategies. Secondly, the issue of cost affects the implementation of IT system in the company’s supply chain department. To cope with this, the management should focus on allocating large sums of money on IT development projects. On the other hand, Wal-Mart should redefine the scope of its voice communication gadgets like RFID through narrowing the scope of products to only those limited to liquid and metal. Moreover, the company should call on suppliers to use their knowledge to shape its supply chain and that of other retailers. Suppliers should also implement an internal RFID positioning unit for easier communication with the company incase their gadgets fail.