Wal-Mart's Facility Location Planning

Logistics Planning Wal-Mart's growth and profitability to become the leading retailer across the world is partly attributed to its seemingly effective logistics system that has enabled the firm to manage its wide range of goods effectively and efficiently. Actually, the company's logistics system generates results that have enabled Wal-Mart to become one of the top revenue earning firms. In addition to being the top generating company in 2007, Wal-Mart was the first retailer to place first sales in the Fortune 500 rank (Khade & Lovaas, 2009).

During this period, the organization overtook other giants like General Motors, Chevron, and Exxon Mobil. Generally, the growth of the organization is based on a business model whose foundation is logistics excellence since logistics is vital. One of the major aspects of the firm's logistics operations is maximization of its efficiency through facility location planning. Logistics Efficiency: In light of the significance of logistics, Wal-Mart carries out various logistics operations that are geared towards enhancing the efficiency of logistics.

These operations are based on the premise that ensuring the effectiveness of the supply chain is no longer an exciting opportunity but a survival skill for organizations in the modern business world. One of the major approaches Wal-Mart undertakes to ensure logistics efficiency is by controlling suppliers through huge purchasing power. This is mainly because the company is in a position to inform producers what to manufacture, when to do so, and at what price (Khade & Lovaas, 2009).

Therefore, Wal-Mart ensures the efficiency of logistics through calling the shots in supply chain. The other factors that contribute to logistics efficiency at Wal-Mart are the various successful logistics components, which show the principles the firm has employed constantly throughout its growth. Given the success of these components, several smaller companies are considering adopting them into their logistics operations.

These integrated functions that contribute to the firm's success and growth are leverage technology, utilizing intermediaries, management that reinforces core values, leverage investing, branding, using size, owning and controlling core competencies, and training supply chain users. Facility Location Planning: The other important aspect of Wal-Mart's logistics operations is facility location planning, which the organization has used to enhance the efficiency of its logistics. While the organization continues to utilize the integrated logistics functions, facility location planning has emerged as an important measure for logistics efficiency.

The use of facility location planning for enhancing logistics efficiency at Wal-Mart is evident in the recent initiatives undertaken to enhance the effectiveness of supply chain management. These initiatives are fueled by the constant expansion of the firm, the ever-changing needs and expectations of customers, and the need to transform business expectations and experiences. The first example of the use of facility location planning by Wal-Mart to maximize its logistics efficiency is accelerated expansion of small stores.

As the firm seeks to compete with various rival stores, the expansion of its small stores, especially Neighborhood Market stores has been a crucial element for maximizing logistics efficiency (D'Innocenzio, 2012). The expansion of its small stores enables Wal-Mart to build more stores and maximize logistics efficiency for less money. The company's focus on expansion of more stores is part of its strategy to continue generating more sales and becoming increasingly efficient with its capital expenses throughout the world.

However, Wal-Mart will be slowing down its expansion in some of its international businesses i.e. Brazil and China in order to enhance the productivity of current stores. Even though Wal-Mart may build some small stores in these regions, the main focus of its international business strategy and model is improving the productivity of these stores. Secondly, Wal-Mart has targeted rural areas in its project of expanding small stores because of the significance of such strategy in the evolving shopping environment.

According to analysts, accelerating expansion of small-format stores as part of facility location planning is crucial in the modern business environment. This is mainly because it is one of few potential segments for growth, especially for companies in the retail industry. In order to enhance logistics efficiency, the company has increasingly targeted rural locations where a square footage to develop a supercenter of 200,000 square feet is available (Gustafson, 2014). While the firm continues with its small-store expansion, its main focus is core markets in rural and suburban centers or regions.

The effectiveness of these initiatives in logistics efficiency is that they enable Wal-Mart to unlock the growth opportunity and avail an unrestricted selection via e-commerce. Therefore, customers are increasingly able to access the Wal-Mart's product offerings at anytime and anywhere across the globe. The.