Friday, June 19, 2009

For your company, what is one example of a project?
An example of a big project that Wal-mart was doing in August of 2003 was getting suppliers to purchase and install a new special software to help meet requirements of doing business with Wal-mart. This software was designed to transfer back and forth daily flow of electronic purchase orders, invoices, and shipping notices between companies. The difference between this software and the one they had before is they used private networks that Wal-mart and its supplier had to pay for each year. This new software will allow Wal-mart to do it over the internet. Wal-mart and its suppliers are eager to use the technology to save millions of dollars they use to pay each year to owners of private networks.

What are the task?
There are many companies that are stepping up to the task from all over the software market. Application integration companies such as Tibco and WebMethods are one of them. E- commerce companies such as General Electric derive off Global Exchange Services. The companies that are selling their services and product around the concept is IBM and Hewlett-Packard.

Does your company use Gantt charts or network diagrams?
Wal-mart is fond of the Gantt Charts. They use it for marketing purposes and they also used it when they were installing this software. The Gantt Chart is very easy to use because it shows the activities that need to be done, and when and how long they should take. Their suppliers must of used either the Gantt charts or network diagram to schedule this project. Wal-mart gave suppliers an October deadline. Black & Decker the major power tool company and Drug maker Abbott Laboratories are one of the first hand full of companies that put this software to use.

What software do they use?
For this project Wal-mart used different software. They mostly use application integration software.

What are your recommendations?
My recommendation would be communication within the supply chain. In order for this project to be successful there must be communication and helpfulness within the supply chain. Walmart should really give a hand to any suppliers that may need any kind of help to get this program going because this will only benefit Wal-mart and the supplier.

Tuesday, June 16, 2009

Supply Chain Management

Cross Docking refers to the logistics practice in the unloading and loading of materials with little or no unnecessary storage in between. To ensure that the quality of goods would be enjoyed by the customer first hand. To avoid all sorts of potential causes of inefficiencies in the distribution operations Walmart features a logistics infrastructure that is guaranteed to be fast and responsive transporation system wherein the distribution centers are being serviced. Walmart recognizes the need to hire dedicated drivers who can share in the belief of prioritizing customer service.
Benefits of Cross Docking - Walmart has reaped the reduction in the handling and storage of finished goods and most importantly the competitive edge of having an efficient supply chain management system that includes reduction in lead time, speedy inventory turnover, accurate forecast of inventory levels, reduction in safety stock, reduction in the dependency of the distribution center and thereby further causing reduction in the trainning costs and errors.

Monday, June 15, 2009

In the early eighties, Wal-Mart placed heavy emphasis on developing and implementing tight supply chain solutions which has catapulted them not only to the top of the retail channel – but into the history books.
If you purchase a flashlight at Wal-Mart. The cash register reads the bar code price tag and reportedly within fourteen seconds, the Wal-Mart central warehouse is notified that the Wal-Mart retail store needs a new flashlight for the shelf to replenish the purchased item. Further, the manufacturer is also notified that the Wal-Mart central warehouse needs a new flashlight. Even the raw material suppliers are notified that the manufacturer now needs a little more raw materials (plastic housing, switch, light bulb, etc), and so it goes – all the way up the supply chain.
Wal-Mart’s legendary supply chain technology has allowed them to break the three-day barrier that some economists in the eighties felt was largely unbreakable. In other words, Wal-Mart is often able to replenish items on the Wal-Mart shelf in less than three days – not from the central warehouse to the shelf, but from the manufacturer to the shelf. With quick and reliable 2-day turn around, Wal-Mart is able to maintain lower levels of inventory and still meet customer demand. These lower inventory levels result in either a reduced floor plan with lower carrying costs and lower interest expense – or a greater diversity of products on the store shelves. (ie: With faster replenishment, Wal-Mart can get away with carrying just 5 toasters instead of 10, thereby freeing up more shelf space for those George Foreman Hamburger cookers.)
Additionally, because Wal-Mart is better able to order inventory on demand, the company is in a better position to meet customer demand. Wal-Mart’s superior supply chain technology allows the company to better avoid carrying an oversupply of fad items.
To fully appreciate the benefits Wal-Mart reaps from its’ superior supply chain solution, consider the traditional labor and paper approach, which is still employed by millions on companies today. Without and automated supply chain, an employee must make a periodic physical inventory count – usually using a clipboard and inventory report. Later, the actual quantities on-hand are then compared to the target quantity levels in the back office to flush out the re-order quantity. From there, employees fill out purchase orders and phones them into the central warehouse – all the while generating expenses for labor costs, paper supplies, and even the long distance phone call. Inefficiencies are a certainty. On many occasions, employees placing orders via the telephone are placed on hold for several minutes, costing valuable time. Eventually the purchase order details are read aloud to the order taker at the central warehouse – a very inefficient process by today’s standards.

Thursday, June 11, 2009

Managing Quality

Wal-mart quality design is knocking down prices for customers. They have the lowest prices providing customers need for inexpensive items. This is a need that can be met by many customers and many different people.

Their Quality of conformance is being able to provide customers with the lowest prices. The world’s largest retailer is known for their performance in operations and meeting their product specifications.

Wal-mart has all the abilities for managing quality. First, they have the availability of keeping the quality the same and consistent as a whole for customers. They have great inventory system that keeps all their products available for purchase. Even though they try to keep inventory low they always have enough to keep on the shelves because they make frequent orders. The world’s largest retailer has reliability. Wal-mart has a reputation of providing customers with good and efficient products for a good price. Wal-mart’s grocery and general merchandise is very reliable and this is why so many people shop at Wal-mart. Their services are also reliable such as pharmacy, auto repair, and tire shop. The combination of both their merchandise and services has given them the reputation of selling good quality at a low price. The reason they have been the world’s largest retailer is because they have been able to keep their maintainability. In other words they have created maintainability through restoration of their products and services before they fail.

Wal-mart field service or also known as customer service is excellent. The reason their field service is successful is because the employees in customer service are trained to have courtesy, competence, promptness, and integrity. Their priority is customer satisfaction and this is why Wal-mart have a variety of warranty on their products.

Wal-mart currently has a quality system where they sell directly to the main customers so their service must have higher quality. They are the last stop for products before they get into the public hands.

I would recommend Wal-mart to focus more on marketing their services and not just their low prices on products. People are well aware of their low prices but are not as aware of the high quality services they provide. They provide high quality service for their pharmacy, auto repair, and tire shop. If they do this they will bring in a new crowd of customers and make more profit.

Monday, June 8, 2009

Service Process Design

-The 3 elements of the service-product bundle
Walmart’s provides the three elements of the service product bundle. Their explicit service is the interactions the customer has with the Walmart employees, their helpfulness, and their courtesy. The implicit service is providing customers a blissful experience. This is done in several ways. They have many workers making sure the place is clean, organize, and easy for customers to find what they are looking for. In some stores they have soft music playing and provide customers with the product they need at a low price. The facilitating goods would be the variety of products they provide for customers at low price.

-The cell they operate in on the service matrix
Walmart falls in the highly standardized service this is why they have a provider routed service. Customers have few options during the service or delivery. All customers in the Wal-mart store get the same service. Employees are supposed to interact, have courtesy, and be helpful to all customers. They have limited number of process pathways that customers can go to. The services offered are standardized with highly repeatable business. The customer comes into the store and grabs whatever products they want, proceed to checkout where a trained cashier helps the customer pay for their items. There are only a certain amount of processes a customer can do that walmart offers. Process like buying, returns, layaway.

-Some types of customer contact they encounter and how they respond to it. Do they use self service? Do they use technology? Do they use focused operations? How do they support employees?
Customers encounter self services by picking out their own products and self checkout. Technology is introduced with the cashiers and customer service reps using highly sophisticated computer inventory tracking systems.

-What types of service recovery and guarantees do they offer?
Walmart offers a return policy for all products bought at their store. Within 90 days of the puchase they will exchange or refund items with a receipt. They have exceptions too. Depending on the item the return policy may be for 45 days, 30 days, or 15 days. This gurantees customer satisfaction with the services of provided.

Wednesday, June 3, 2009

Quality Control and Improvement

1. What quality control methods do they currently use?
Walmart currently uses the attribute control in order to find out if an item is either good or defective. Their objective is to find the percentage of flaws occurring in a sample as the attribute measure. The attribute measure they focus on most is the percentage of items that are defective from their supplier. Walmart suppliers have supplier certification because products can be used directly by the customer without incoming inspection. Walmart has an agreement with its suppliers that they are responsible for the safety and security of walmart’s purchased merchandise. Walmart’s suppliers have a high quality control agreement. Walmart has set critical control points for their suppliers. First, suppliers must disclose all their manufactories. They must have transportation security inspection. Walmart also demand a third party inspection by the company of their choosing. The suppliers are expected to have a self assessment audit and they must then undergo a validation by a walmart representative. Walmart also has factory security standards for their suppliers.

2. Do they use QC charts?
Walmart uses the attribute control chart in order to estimate the percentage of items that are defective from a supplier. Sample percentage must stay within limits to keep the process going. Once there is a sample percentage outside those limits the process is stopped and they look for an assignable cause. Most frequently this can be cause by a change in material that they use to make an item.

3. What type of inspection is used?
Walmart demand its suppliers to allow them to get inspected by a third party. Suppliers are also expected to have operator inspection and undergo a validation by a walmart representative. The suppliers must have transportation inspection as well.

4. Is continuous improvement used? If so , do they use Pareto analysis or fishbone diagrams?
Walmart does use continuous improvement. They use the fishbone diagram because the problems that they find are usually separate, in other words they are loose connections. Walmart representatives might find several different problems that do not have nothing to do with each other. For instance, it can be the supplier's inexperience workers, materials, inspectional skills, or technology. The problems are separated by major causes and then are broken down in the diagram.

5. What about Six Sigma practices?
Six Sigma is a meticulous methodology that make use of information management by facts and statistical analysis to define, measure and improve a company's operational performance,practices and systems. It identifies and prevents "defects" in manufacturing and service-related processes to anticipate, and achieve or exceed total customer satisfaction.
Six Sigma is a systematic method for process improvement that uses five steps defined by the acronym: DMAIC1. Define 2. Measure 3. Analyze 4. Improve 5. Control. Wal-mart uses the Six Sigma practices for their improvement and that is the one of the main reasons it the most successful departmental store in the world today. Wal-mart does use six sigma procedures in every aspect of the store. The supervisors are taught what to look for what they need to do to analyze and measure them and also show what to do to improve and keep improving.
6. Recommend some new ideas they should consider?
Walmart can consider to use the pareto analysis because they can make down the failure of the products. It is important to know what are the frequent failures so they can adress them quickly and prevent future problems

Wednesday, May 27, 2009

Process Selection

What type of product flow do they use?
Even though Wal-mart does not make products I would say Wal-mart uses the batch flow for their product flow oppose to the line process that is regular and sequential. They have a variety of products and receive them in batches. Wal-mart orders a variety of products frequently in small amounts to keep inventory down. The main reason they are considered to use the batch flow is because they try to handle low volume orders with many different products. They use the batch operations because it is the most economical and incurs the least risk.

What type of customer order do they process?
Wal-mart has a make to stock process where they can provide faster service to customers from available stock and lower costs. Wal-mart has an efficient system that keeps their inventory on target. When someone buys a product in Wal-mart the cash register reads the bar code, and in fourteen seconds the Wal-mart central warehouse is aware that the Wal-mart retail store needs that product. Also, the manufacturer is informed that Wal-mart central warehouse needs that product. The raw material suppliers are notified almost in the same way. The raw materials can be a light bulb, plastic housing, and a switch. This goes all the way up to the supply chain almost instantly. They have a great MTS process because products are carried in inventory to immediately fulfill customer demand. They run their operations efficiently because are able to produce inventory in advance of actual demand in order to have proper products in stock. This system allows inventory management to forecast and plan for capacity.

Which cell do they fall into in the process characteristics matrix?
Wal-mart falls in the batch and make to stock cell. They fall in this cell because they try to keep volume as low as possible because it is expensive to keep inventory and they sell many different products. Furthermore, they fall in this cell because they use the MTS process where the production cycle is being operated to replenish stock. Production is geared to future orders and replenishment of inventory.

What are some of the factors influencing their process selection?
One factor in Wal-mart process selection is market conditions. They provide a variety of products. They also have priced product for all different types of consumers. They keep their prices very competitive in the market. They have entered the market at the right time and gain an advantageous position. Another factor that has influence their process selection is capital. Since they have a batch flow their investment are medium, they keep their warehouses with enough inventory to fulfill customer demands. Lastly, they have general equipment to do their task more efficiently such as a forklift, tape machines, and hand trucks. In addition, labor has also influence their process selection because they need skilled labor. They do not have a routine task. What has influence their process selection the most is technology. Wal-mart is the 5th largest company based on 2008 revenue in the country and the biggest retail store in the world because of their JIT system. The system allows Wal-mart to have lesser inventory by having recurring orders. The EDI system is the core of their strength. The EDI system entails direct computer to computer transactions into the sellers’ ordering system. Basically the sellers’ find out instantly when inventory is down.

Can they adopt any of the mass customization methods discussed?
Wal-mart does not need to adopt a mass customization but their suppliers such as Proctor & gamble and Gillette has adopted a mass customization. If they wanted to adopt a mass customization method they can adopt a postponement. Wal-mart sells clothing so they can sell t-shirt which they can put a unique design on the customer’s T-shirt at the point of purchase

Wednesday, May 20, 2009

Inventory Management

Wal-mart is known for their efficiency in the inventory management department. They run an EOQ system where their demand rates are continuous, frequent, and known. Wal-mart manages an efficient JIT system. The JIT system stands for the just in time inventory systems, which allows Wal-mart to have lesser inventory by having recurring orders. The problem with recurrent ordering is that it can result to extravagant ordering costs. Companies frequently miscalculate their ordering cost; in return can make it seem costly. This is where Wal-mart shines because they run a flawless EOQ system which is the essential tool that tells them the ordering cost, holding costs, and demand. This system works well for Wal-mart because the ordering cost are low; therefore, it is better to let the suppliers hold on to the rest of the inventory.

The key to Wal-mart strategy in the inventory management is their EDI system which makes their ordering cost almost absent. EDI system is a electronic data interchange. This means that this system is used for electronic communication of business transactions between organizations. These business transactions include orders, invoices and confirmations. The EDI system entails direct computer to computer transactions into the sellers’ ordering system. Basically the sellers’ find out instantly when inventory is down.

Wal-mart has a no tolerance level where they place high demands on service from their suppliers. They refuse to buy in bulk so that they can keep surplus inventory to a minimum. The zero tolerance policy applies for late shipment. Companies like Wal-mart are demanding shorter lead time as well.


Wal-mart serves customers in 15 different countries and has more than 7,800 retail stores. Wal-mart has more than 2.1 million employees worldwide. Wal-mart has been guides in maintaining a well manage worldwide organization. This fiscal year they made 401 billion dollars in sales. They have been guides in the desire of benefiting humanity as a whole and giving people employment opportunity. They are ranked #1 in the 2009 Fortune Magazine as Most Admired Companies survey.

The first Wal-mart was located in Rogers, Arkansas and it was established in 1962. They became a corporation on Oct.31, 1969 as Wal-mart Stores Inc. This organization’s shares started trading on the over the counter markets in 1970 and two years later was listed on the New York Stock Exchange. In a decade Wal-mart grew tremendously by expanding to 11 different states with 276 stores. In 1983, Wal-mart set off its first Sam’s Club membership warehouse. In 1988 they launched the first supercenter. Now they present a complete grocery with general merchandise, which has showed as an ascendant design. In 1991, Wal-mart became an international company.