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

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