Transportation Economics and ERP Implementation
A Brief Summary of the Organization
Wal-Mart is an American public corporation established in 1962. The company runs a chain of warehouse stores and discount stores located across the globe. Today, Wal-Mart is the leading grocery chain internationally. The company offers a wide selection of products in their over 8000 stores worldwide (Sehgal, 2011).
The Role of Transportation Economics in Wal-Mart’s Transportation Decisions
Transportation is one of the most critical economic activities for Wal-Mart. By shifting goods from where they are sourced to locations where the demand is high, transportation is an essential logistic function that links Wal-Mart to its customers and suppliers. This activity supports the company’s economic utilities of time and place. By place, the customers must always find the goods at any given place they demand it. Time utility means that Wal-Mart must ensure that customers can access the goods whenever they need it (Sehgal, 2011).
At times, transportation can be blamed for Wal-Mart’s inability to serve its customers properly. For instance, the company occasionally experiences late deliveries, which in turn cause complaints and service problems. Moreover, the company has previously incurred product damages during transit, or the employees might load the wrong products for shipping. Normally these are referred to as over, short, or damaged (OS&D) shipments (Sehgal, 2011). They can lead to customer frustration and dissatisfaction hence influence the decision to purchase from rival companies.
However, Wal-Mart has adopted the latest technology to help perform on time with undamaged and complete deliveries. The strategy has promoted customer satisfaction and confidence besides gaining more business for the firm. By instilling confidence in service performance, Wal-Mart has successfully made customers more reluctant to succumb to competitors offers via reduced prices and clever promotions (Sehgal, 2011).
Wal-Mart’s Supply Chain Contributions to Customer Service Levels
The company’s supply chain has been instrumental in connecting customers with e-commerce orders. The company...
Moreover, the retailer guarantees convenience and choice through dynamic points of distribution like stores and home deliveries. This supply chain strategy allows customers to specify pick up time, drive to the pickup location, issue the order number and collect the goods orders. This strategy helps Wal-Mart to maintain an unrivaled customer service level in the industry. Customers become satisfied when the goods that they order meet their specifications especially in the delivery times, proper packaging, and handling. However, the efficient management of the supply chain will ensure that this is realized and the company can capitalize on the benefits associated with the strategy.
Inventory Control Practice and Uses of technology at Wal-Mart (ERP)
Wal-Mart’s inventory control is a key contributor to the company’s success. Looking at the mammoth size of Wal-Mart, efficient and effective inventory control practices is of crucial significance to the business. Wal-Mart has adopted the most recent technologies for its inventory management element. In fact, it is an example of companies enjoying the benefits of innovation and advanced technologies through optimizing inventory management performance. Though other factors have also contributed to Wal-Mart’s success, advanced inventory management rests at the heart of Wal-Mart’s leadership.
The business has achieved massive success regarding inventory management partly courtesy of their effective implementation of ERP system. The company’s decision to adopt ERP serves as evidence that their technology strategy has shifted in favor of packaged applications. The aim of implementing ERP was to support its global expansion and the need to effectively respond to changes in the regulatory and business landscape (Brady et al. 2011). The ERP solution has replaced some of the legacy systems in the retail sector while incorporating with other internal systems of Wal-Mart. Probably, this system gives the company more scalability and flexibility to its growing business.
However, critics…
