In conclusion, the vendor managed inventory system and the just in time system has helped Wal-Mart counter some of its stock issues. Thus, an effective inventory system is crucial for efficiency in running of organizations businesses. Overstocking is especially critical for fragile goods and perishable. Lack of stock translates to a loss of customers since the stock to be purchased are not readily available on the shelves. Therefore, issues with management of inventory especially in a large retail store like Wal-Mart can amount to significant loses. Unfortunately, the mess went on to 2014 as Wal-Mart reported low earnings again due to surplus in stock and chaotic storage space (Trujillo, 2016). The issues put stocking in at the top of Wal-Mart’s priorities. Wal-Mart had to cut down on customers which led to the accumulation of inventory since employees were not enough to restock the shelves adequately. The situation was adverse causing the company a loss of three billion dollars in 2013. However, by 2013 stocking issues were only worse for Wal-Mart with merchandise running out fast and new stuff not arriving on time. The challenges of keeping shelves stocked caused Wal-Mart to hire professional logistics experts in 2011, Acosta Inc. Wal-Mart has previously encountered difficulties in the maintaining stocked shelves. Wal-Mart has had its fair share of issues arising from inventory mismanagement that has caused the company dearly. The cross-docking reduces stock at the warehouses (Greenspan, 2017). Just in time at Wal-Mart happens in for of cross-docking where the suppliers take the goods to the warehouses, and Wal-Mart receives them in their trucks and they are taken to the store for display. Wal-Mart also incorporates just in time system to minimize storage levels. The responsibility of identifying reorder levels is passed to suppliers. Wal-Mart enjoys various advantages of the vendor managed system such as reducing delays in the supply chain as well as reduced costs by not having to hire extra personnel to oversee supplier goods. The company is hence responsible for the movement of stock from the wares houses to store. Suppliers also get information on the rate at which various goods are moving helping the determine when to send ore good to Wal-Mart. The model involves suppliers having access to Wal-Mart’s data on inventory levels at a given time. Wal-Mart’s inventory system is a vendor managed inventory model. The system incorporates several aspects of technology to serve the inventory needs of the company. Therefore, Wal-Mart utilizes advanced technological inventory system. Wal-Mart’s is a large company that requires efficient inventory management systems. A look at the inventory management system of Wal-Mart helps one understand how inventory systems work and issues that may arise due to inventory systems. There exist a number of inventory systems such as multi-period inventory systems, partial inventory systems, and fixed order quantity or period systems among others (Sarkissian, n.d). The larger companies, therefore, utilize inventory management system to ensure efficiency in stock management. However, larger companies have higher stock levels that require technical management to avoid stock issues and inconvenience business processes. Small business firs have low stock levels and hence may not necessarily need complexity in managing the stock levels. Inventory refers to items an organization keeps in stock.
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