Inventory Proposal Wal-Mart
Wal-Mart Woes
TEAM “STUDENTS”
QRB/501
June 20, 2013
TEACHER
Wal-Mart Woes
Every company, no matter the size deals with inventory issues. How these issues are dealt with can determine the outcome of the company. If not done in a rectifiable fashion, the company could face serious threats up to and including closure. We chose Wal-Mart as our company from our last paper, as it proposes an interesting dilemma in that despite the continued growth, all is not well with Sam Walton’s creation. This paper will discuss the inventory problems, the expected benefits that may or may not motivate the organization for change and our assessment for an alternative solution.
Wal-Mart is growing at a blistering pace adding nearly 500 stores in the past five years a 13% increase, but during this time period Wal-Mart has reduced its employee count by roughly 20,000. This has had a serious impact on the inventory. Bloomberg published an article that states that although Wal-Mart has one of the best supply chains in the world, without staffing that chain breaks down. The company does not have enough workers to help stock inventory on shelves, or distribute the inventory to stores. Customers either find stores looking disorganized and unkept, or simply find an empty shelf with no product (Flannelly, 2013). A leak reported to Bloomberg said Bill Simon, the executive vice president and chief executive officer for Wal-Mart’s United States operation stated during an executive officers meeting that the company has inventory problems. “We run out quickly and the new stuff doesn’t come in, “he stated, noting that these “self-inflicted wounds” were Wal-Mart’s “biggest risk.” (Foley, 2013)
The issue is the amount of inventory that the current employees can stock is far less than is required to maintain adequate merchandise levels. A store may have inventory in the back, but if it is not seen by the customer, the store is considered to be out of stock. This poses two major problems for
TEAM “STUDENTS”
QRB/501
June 20, 2013
TEACHER
Wal-Mart Woes
Every company, no matter the size deals with inventory issues. How these issues are dealt with can determine the outcome of the company. If not done in a rectifiable fashion, the company could face serious threats up to and including closure. We chose Wal-Mart as our company from our last paper, as it proposes an interesting dilemma in that despite the continued growth, all is not well with Sam Walton’s creation. This paper will discuss the inventory problems, the expected benefits that may or may not motivate the organization for change and our assessment for an alternative solution.
Wal-Mart is growing at a blistering pace adding nearly 500 stores in the past five years a 13% increase, but during this time period Wal-Mart has reduced its employee count by roughly 20,000. This has had a serious impact on the inventory. Bloomberg published an article that states that although Wal-Mart has one of the best supply chains in the world, without staffing that chain breaks down. The company does not have enough workers to help stock inventory on shelves, or distribute the inventory to stores. Customers either find stores looking disorganized and unkept, or simply find an empty shelf with no product (Flannelly, 2013). A leak reported to Bloomberg said Bill Simon, the executive vice president and chief executive officer for Wal-Mart’s United States operation stated during an executive officers meeting that the company has inventory problems. “We run out quickly and the new stuff doesn’t come in, “he stated, noting that these “self-inflicted wounds” were Wal-Mart’s “biggest risk.” (Foley, 2013)
The issue is the amount of inventory that the current employees can stock is far less than is required to maintain adequate merchandise levels. A store may have inventory in the back, but if it is not seen by the customer, the store is considered to be out of stock. This poses two major problems for
References: Flannelly, M. (2013, March 27). The Dividend Daily. Retrieved from http://www.dividend.com/news/2013/wal-mart-inventory-and-labor-issues-could-drive-customers-to-competitors-wmt-tgt-cost/ Foley, M. (2013, March 26). How Bad Are Wal-Marts Inventory Problems. Retrieved from http://wallstcheatsheet.com/stocks/how-bad-are-wal-mars-inventory-problems.html/?a=viewall White C., M. (2013). CNBC U.S. News. Retrieved from http://www.cnbc.com/id/100618849