The paper describes the logistic processes of Wal-Mart that can be improved over a course of short time span. The three processes which are identified for this assignment are discussed in detail with the recommendations to improve performance of the overall organization. Introduction: The organization that has been chosen for this project is Wal-Mart. It is an American retail corporation that operates on a global level. Wal-Mart is a large warehouse store and operates a number of large retail chain stores all over the world. Wal-Mart is chosen for this assignment because it is one of the largest public corporations and employs around two million people all over the world. It is indeed the biggest retailer in the world. Wal-Mart is one of the most valuable businesses in the world despite the recent decline in their profits in some of the global operations.
¶ … logistic processes of Wal-Mart that can be improved over a course of short time span. The three processes which are identified for this assignment are discussed in detail with the recommendations to improve performance of the overall organization.
The organization that has been chosen for this project is Wal-Mart. It is an American retail corporation that operates on a global level. Wal-Mart is a large warehouse store and operates a number of large retail chain stores all over the world. Wal-Mart is chosen for this assignment because it is one of the largest public corporations and employs around two million people all over the world. It is indeed the biggest retailer in the world. Wal-Mart is one of the most valuable businesses in the world despite the recent decline in their profits in some of the global operations.
Wal-Mart was founded in the year 1962 by Sam Walton. It was listed on the New York Stock Exchange in the year 1972. The business still is controlled by the same Walton family. The family controls about 48% of the share in the business. Slowly and gradually Wal-Mart expanded all over the world with major success coming in the late 90s and early years of the previous decade. The main market for the business still remains the local U.S. Market which accounts for almost 50% of their profits.
Wal-Mart has more than 9000 stores all over the world which are operating with different names in 15 countries. It operates under the name of Wal-Mart in 50 states of America and has the same name in Puerto Rico. In United Kingdom it is named Asda, in Mexico it is Wale, in India it is Best Price, and in Japan it is Seiyu. In some countries like Canada, Argentina and Brazil it has fully owned subsidiaries. Global ventures for Wal-Mart have given mixed responses as in countries like China and UK they have been extremely successful while in South Korea and Germany they had to suffer great losses.
The three processes for the assignment chosen are the following:
Distribution Centers
Wal-Mart has over 150 distribution centers. The number of distribution centers is the most for any company all over the world which shows the scope of the process. These distribution centers provide a direct link to more than 60,000 trailers, 7500 drivers and 7000 tractors. These distribution centers are placed on strategic locations which help quick flows of products. There are a total of 9 distribution centers in America. These distribution centers keep the stocks in ample quantity, they even have disaster management inventory which are used in case of any disastrous situation in the country. These centers are open 24/7. Each distribution center is responsible for providing inventories to 90-100 stores that are within 200-mile radius. There has been a recent rise in the costs related to the distribution centers as they are huge in size and require a lot of other expenses in order to maintain the required level of logistics to perform in an efficient manner.
The improvement in the distribution processes can be made is to reduce the number of distribution centers by outsourcing a few operations. This would help them in reducing the inventory handling costs and inventory carrying costs. Outsourcing will come at a higher cost but with Wal-Mart the orders would be in bulk and the outsourcing agency will be more inclined to offer Wal-Mart discounts.
Transportation:
The distribution centers deliver the goods to the retail stores through the state of the art transportation facility. The transport facility includes company owned trucks and bikes that are use for swift and efficient delivery. Skilled drivers are hired after going through several layers of processes. Once they are hired on the basis of their abilities they are then trained. These drivers are considered to be the best drivers of the world. The safety of the drivers is considered as one of the primary goals of the transportation department. They are also trained to drive or ride in a responsible manner. The problems with the current transport structure of Wal-Mart are the increasing fuel costs and the increase in fuel consumption in high traffic areas. To add to the problems the government has imposed a new tax law which charges more taxes for heavy vehicles.
The transportation area can be improved in the organization by a little restructuring. They can shift a lot of load on medium vehicles by investing more in acquiring medium sized vehicles instead of heavy vehicles. There are a number of benefits of this move as it will help in reducing the overall costs and increase the efficiency of the overall supply chain.
Procurement:
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