Business Wal-Mart When Sam Walton Thesis

Excerpt from Thesis :

While their backgrounds and personal beliefs are very different, they never take each other for granted. They are encouraged to express their thoughts and ideas and to treat each other with dignity.

Service to their Customers -- customers are the reason that they are in business, so they believe that they should treat them that way. They offer quality merchandise at the lowest prices, and do it with the best customer service possible. They look for every opportunity where they can exceed their customers' expectations. They believed that this is when they are at their very best.

Striving for Excellence -- They are proud of their accomplishments but are never satisfied. They constantly reach further to bring new ideas and goals to life. They model themselves after Sam Walton, who was never satisfied until prices were as low as they could be. They believe that a product's quality is as high as customers deserve and expect (3 Basic Beliefs & Values, 2009).

Wal-Mart stocks items that are made in more than 70 countries. At any given time, the Arkansas-based retailer averages $32 billion in inventory. With those kinds of numbers, having an effective, efficient inventory control system, or inventory management system, is essential. Wal-Mart's system helps it maintain its signature everyday low prices by telling store managers which products are selling and which are taking up shelf and warehouse space unnecessarily (Crosby, 2009).

Inventory management systems are the key for big enterprises, but smaller businesses and vendors are beginning to use them, too. These systems ensure customers always have enough of what they want when they want it. The goal for a retailer's financial need is to maintain as little stock as possible. Mishandled inventory means disappointed customers, along with too much cash tied up in warehouses and slower sales. Factors such as quicker production cycles, a proliferation of products, multi-national production contracts and the nature of the big-box store make them a necessity (Crosby, 2009).

Modern inventory management systems must have the ability to track sales and available inventory, communicate with suppliers in near real-time and receive and incorporate other data into the mix. They also must be flexible, allowing for a merchant's intuition to change at any given time. They must be able to tell a storeowner when it's time to reorder and how much to purchase. In order to do this, inventory management systems pull together several technologies into one cohesive approach to benefit all (Crosby, 2009).

The systems work by bar codes or RFIDs telling scanners which items consumers are buying. The scanners then transmit the information to computers by reading the bar codes and sending that information to the software. The software then determines the numbers from the bar code and matches those numbers to the type of merchandise they represent. This allows a store to track their sales and inventory. This can be done either at the checkout counter or with a hand-held scanner. This keeps the store on top of which items are selling and which ones are not (Crosby, 2009).

This specialized software keeps track of how much stock is going out the door via purchases and how much still remains on the shelves and in the warehouse. This gives managers a real-time picture of what's happening. The software also analyzes the data and makes recommendations as to what needs re ordering. Sometimes, the software is programmed to automatically order when inventory gets to a certain level. These systems provide good information to support decisions but leave the final call up to managers (Crosby, 2009).

Once a manager makes a re-order decision, the system uses an electronic data interchange to communicate the order directly to the vendor. Electronic data interchange is the procedure of sending and receiving data between two parties. The data is stored in a computer's memory bank and read by managers at both ends of the communication, to ensure accuracy (Crosby, 2009).

An estimated 80% of American households report that they shop at Wal-mart at least once a year and 90% say that they plan to shop there in the future. Despite its success, Wal-Mart has suffered some recent setbacks. These have included voters in the city of Inglewood, California successfully blocking the first planned supercenter in L.A. County, a huge class-action gender discrimination lawsuit, along with recent coverage of employee mistreatment and violations of immigration law (Lake, Mermin, and Wiefek, n.d.).

Analysts are predicting that Wal-marts worldwide sales will grow from $285 billion to $500 billion by 2010. This will be because the discount chain will open more stores, introduce new formats, and move into foreign markets and non-retail business, like store banking. Currently Wal-Mart plans to have 3,131 Supercenters in place by 2010. They want to expand into the top markets and to build grocery-only neighborhood stores and freestanding apparel stores. If they accomplish all of this, in five years Wal-Mart's operations could represent 3.59% of the gross domestic product. All of this makes it profusely clear that Wal-Mart's current stumbles provide a chance to challenge their power before their presence grows to truly unprecedented and insurmountable proportions (Lake, Mermin, and Wiefek, n.d.).

Wal-mart has demonstrated several ways of going lean. They do it by decentralizing decision making with its store within a store technique. Whereas other retailer stores relegate the department head to performing the types of tasks that one might expect of an hourly employee, like ripping open boxes and stocking shelves, Wal-mart has turned them essentially into managers of their own businesses. The firm shares with them measurements on everything from the cost of their goods to freight costs, profit margins, and even how their store ranks with all the others. This is the key if they are to actively manage the flow of value within their own department, constantly assessing and correcting along the way rather than waiting until higher level managers realize corporate goals failed to reach their mark (Ruffa, 2007).

Building measurement right into worker's day-to-day activities provides them the right insight at the right time to mitigate many sources of lag. Workers have broader spans of insight, giving them the ability to make more decisions on their own. This, in turn, minimizes the information that must be shared across the organization, thus reducing the complexity of information flow. Managers can thus be left to manage because they no longer have to track the details of day-to-day business issues (Ruffa, 2007).

Other ways that Wal-mart contributes back to the community are done through the Wal-mart foundation. The Wal-mart Foundation works to provide opportunities that improve the lives of individuals in our communities including our customers and associates. Through financial contributions, in-kind donations and volunteerism, the Wal-mart Foundation supports initiatives focused on enhancing opportunities in our four main focus areas:


Workforce Development / Economic Opportunity

Environmental Sustainability

Health and Wellness

The Wal-mart Foundation has a particular interest in supporting the following populations: veterans and military families, traditionally underserved groups, individuals with disabilities and people impacted by natural disasters (the Wal-mart Foundation, 2009).

In all of their giving efforts, they strive to meet the unmet needs of underserved populations and support organizations that give individuals access to a better life. They believe in operating globally and giving back locally. They encourage their associates to support programs that make a positive difference in their communities through volunteer efforts and financial contributions. They involve their associates in determining how the Wal-mart Foundation dollars are used to support causes that are important to them (the Wal-mart Foundation, 2009).


3 Basic Beliefs & Values. (2009). Retrieved September 29, 2009, form Wal-Mart Web site:

Crosby, Tim. (2009). Retrieved September 29, 2009, from How stuff works Web site:

Frank, T.A. (2006). A Brief History of Wal-Mart. Retrieved September 29, 2009, from Reclaim

Democracy Web site:

Is Wal Mart Good for America? (2004). Retrieved September 29, 2009, from Frontline Web site:

Lake, Celinda, Mermin, David and Wiefek, Nancy. (n.d.). Re-Branding Wal-Mart. Retrieved September 29, 2009, from Social Policy Web site:

Ruffa, Stephen a. (2008). Going Lean: How the Best Companies Apply Lean Manufacturing

Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits. Retrieved September 29, 2009, from Google Books Web site:

2 UEC&pg=PA99&lpg=PA99&dq=walmart+and+lean+processes&source=bl&ots=Hhw


kf4I&sa=X&oi=book_result&ct=result&resnum=8&ved=0CBoQ6AEwBzgU#v=onepag e&q=&f=false

Supply Chain. (2009). Retrieved September 29, 2009, from ASA Research Web site:

The Wal-mart Foundation. (2009). Retrieved September 30, 2009, from Wal-Mart Web site:

Troy, Mike. (2003). Logistics still cornerstone of competitive advantage - Wal-Mart the Category King: A New Era of Excellence. Retrieved September 29, 2009, from bNet Web


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