Using Team in Production and Operation Management
Wal-Mart is a leading retailer not only in the United States but in many other parts of the world. It is the biggest U.S.-based grocery retailer and the biggest private employer with more than 2.1 million employees and operations in over 58 countries. The company delivers its goods and services in three segments, such as supercenters, discount stores, and neighborhood stores.
Supercenters are between 175,000 to 195,000 square meters in size, and usually include number of store facilities, such as a supermarket, a garden centre, a pet shop, portrait studio, Tire and Lube express, a pharmacy, optical centre, saloons, video stores, local bank branches, fast food outlets, etc. Literally, supercenters represent the largest and most remarkable part of Wal-Mart sales and activities.
Wal-Mart discount stores are smaller departmental stores that sell general merchandise and groceries. The fundamental feature of Wal-Mart discount stores is that products are sold at discounts there (Dalic, 2001).
Wal-Mart neighborhood stores serve the aim to reach wider pool of consumers in local areas. Wal-Mart neighborhood stores are meant to serve certain communities in regions and rural areas, and sell groceries and a variety of general merchandise products. Wal-Mart’s network of neighborhood stores consists of such outlets as Sam’s Clubs, Marketside, Wall-Mart Express stores, Mas Club, and Supermercado de Wal-Mart stores.
More than 25% of Wal-Mart’s revenues come from international operations. Wal-Mart supercenters, discount and neighborhood stores operate in more than 15 countries. Wal-Mart maintains full control of its production and sales activities in Mexico, Canada, China, Argentina, and the U.K. In addition, the corporation operates in a number of other countries in the form of mergers, acquisitions, and licensing local groceries. Overall Wal-Mart employs more than 660,000 employees in its international facilities. International operations of the retailer have been successful in the U.K, Japan and China, while they proved to be failures in South Korea and German and caused substantial losses to the company.
Wal-Mart Corporation also makes use of e-commerce, which allows providing services to customers in more efficient and fast manner. Customers can buy and get their goods delivered using their computers or phones.
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In February 2010, Wal-Mart acquired Vudu, a media production company that became part of the Corporation.
There have been numerous concerns about dependence of Wal-Mart’s operations on China, which contributes to instability of the US dollar in terms of increased imports from the Asian country. However in reality, China is the sixth-largest export market for Wal-Mart’s products.
During recent economic downturn Wal-Mart/Bentonville announced revenues in excess of $419 billion, a 4.2 % increase in the sales, and an increase in income of 6.4%. Generally, Wal-Mart’s operations and revenues amount to 50% of business operations conducted by its top five competitors combined. The Wal-Mart grocery stores make 20% of the total grocery outlets in the United States, holding more than 60% of the total market share.
On the international scale, Wal-Mart faces competition from Carrefour in France, Metro in Germany, and Tesco in Britain. Yet, Wal-Mart is the eighth biggest public corporation with operations in the largest markets in the world.
In his fourteen principles of total quality management, Deming stresses the importance of managerial transformation through an integral system of various stages of knowledge. The principles are spelt well at Wal-Mart in their effective and efficient way of operations. Removal of barriers and sticking to teamwork have been a focus of the Wal-Mart operation management. Managing a company with thousands of stores in the United States and hundreds of stores internationally is not an easy job. Wal-Mart’s President and CEO, Michael T. Duke, commented on improved business through a well-governed and cost-efficient team leadership
“At Wal-Mart, we have so many great strengths to leverage throughout our company. Our new Global Business Processes team is developing and sharing improved processes, such as workforce productivity, across our business segments.”
Wal-Mart operations management structure is based on regional and country management. The branch managers are responsible for the operations of their own respective store and sales. Following the specific segments of Wal-Mart in terms of operations, it induces its activities in considering every possible store they design and contemplate.
The operations are spread according to the segments and departments. The superstores, discount stores and neighborhood stores all run a parallel program of chain inventory and supply management. Every segment of operations has an administrator, who guides the divisions on their unique and transformative operations. Such system of management is implemented by operation management department and entails divisions to embark on a duty to provide less costly operation activities i order to maximize revenues and enhance quality of service delivery.
Wal-Mart operations strategy is based on low price strategy and low transportation costs, hence managers are trained to manage one store at a time to accomplish the stated objectives. The essence of a qualified and procedural structure is to enable effective decision making and increased control. Wal-Mart has established vendor partnerships with top manufacturers, who can offer best efficient supply services and price to maintain low costs, identify stock-outs easily, and increase sales.
Through a technology-driven supply chain system, Wal-Mart has created a competitive advantage in the market. It recently completed a satellite network that enables real-time communication between stores, distribution centers and the head office – a step ahead in operations management. The modernized chain management technology ensures up to date information on sales and sufficient communication with suppliers. This process of networking helps Wal-Mart to speed their transactions through Internet and Cisco network connection, hence providing sustainability in availability of goods and services. Cisco updated chain management network empowers employees to increase their productivity through the easy access to information and sharing. A complete organized directory, an organized structure and procedures are communicated through a pipeline of information and specific relay centers. Information and ideas sharing is vital in operations of a store, hence the communication resource affects and contributes to smooth management of supply chain. At the same time the network utilizes technology to provide daily discounts, enhanced shopping experience and supply of products in order to grant customer satisfaction.
Sustainable products are the major concern of Wal-Mart. Operations structure represents the idea of sustaining the basic areas of food, electronics, textiles and product packaging. These areas are vital for quality products delivery that may enhance or adversely affect customer relationships (Dalic, 2008).
Distribution operation is another component of Wal-Mart’s operation management. Efficient use of fuel and increasing the number of delivery trucks are major factors affecting sustainability of logistics and supply chain. Since the inception of e-commerce activities, enhancement of distribution has become one of the major objectives at Wal-Mart. To realize the objective, the company has also increased the number of warehouses to make its merchandise available at closer locations to its stores in regions.
Wal-Mart’s retail link system supplements operations activities. The system is the backbone of inventory management and logistics infrastructure. It holds specific data for Wal-Mart in regard to available stock and possible stock-outs, as well as discount rates, prices, suppliers and other useful data.
Seeking to enhance its operations, the company employs new and appropriate operation policies for its outlets. Low prices, sophisticated technology, motivated personnel and comparatively low costs of operations are observed in North and Latin America only. Most countries are expensive to operate in; hence the company considers increasing price indexes in accordance to the economy of particular countries.
In addition, the company should embrace the traditions and cultures of the operations host country by ensuring that top management is employed from the local community, where people understand current trade patterns and market capabilities of local market. Having managers that can easily grasp and analyze local market situation and conditions will allow the company to make appropriate decisions and take relevant measures, which will result in increase in company sales. Cultural issues affected Wal-Mart’s operations in Mexico and Germany, where local communities experience lack of respect towards their cultures from the personnel of Wal-Mart (Knorr & Arndt, 2003).
In Japan, Wal-Mart is struggling with its acquisition issues, which will be the major reason of slow pace of settling in the industry and high competition. Consequently, the company should embark extensive marketing and build its corporate name in order to attract more customers. Due to high saturation in the United States, the company should increase operations in international markets. Increased investment in technology will most likely grant growth of operations and better sales.
Use of Team work
The principle of removing barriers and motivating team work is emphasized by Wal-Mart and is considered to be one of the benchmarks that make the company thrive in the retail business. Team work is performed in store operations and most importantly in the supply chain management and distribution.
The founding father of Wal-Mart, Sam Walton, believed that the spirit that nurtures and makes a company flourish extraordinarily is team work. Hence, team work is exercised and represents the three basic values of the company, which are respect for the individual, service to customers, and striving for excellence (Teamwork, n.d).With the principles of mutual support, mutual respect and open communication, there is place for open policy, associative opinions, focus groups, and shared diversity.
Mutual Support. By providing mutual support, team members help eacch other to best serve the customers and have an opportunity to do something and learn. Employees learn to support each other in projects and also learn from their mates. In case of mistakes, one can learn from them, while learning is considered to improve employee performance in the long run.
Mutual respect. Mutual respect is exercised by wishing and hoping the best for the team and individuals and by sharing and expecting ideas from others. When respect is uphold, the interest and mistakes of every person are recognized and treated in a fair manner in order to recognize every person’s contribution to the company. Employees feel recognized and important to the company; hence they show hard work and provide excellent customer service delivery. This helps to build efficient activities and team co-ordination as well as excellence in customer service.
Open communication. The company provides an open door policy on ideas and thoughts that may improve the company operations so that everybody’s opinion can be considered. The company also undertakes associate opinion surveys to hear the complaints and compliments of employees and get information that may help improve the company service delivery. Lastly, it considers focus groups that assist in looking at the challenges and prospects of the company business and improving team work.
The company keeps a learning culture by training career managers at culture trainings at Walton College. The main purpose of this culture is to promote sharing of ideas and nurturing careers. The trainings and series of seminars and meetings are venues of collective teamwork, where task participation is practiced (Bergdahl, 2010).
The store managers and working associates form a entailed with decision-making team that is responsible for performing day-to-day activities at the store. Headed by the store manager, team members are involved in making decisions on operation procedures and solving issues, if they arise. It is best enacted through sharing of information and ideas using the Cisco Internet network system and regular meetings.
Although remarkable teamwork is exercised at Wal-Mart, there is yet a gap in teamwork experience. However, the company strives to motivate and encourage ambitious and risk-tolerant teams to work and improve performance on daily basis to achieve outstanding performance results. The management at Wal-Mart supports employee participation and offers rewards system based on performance and target lines to motivate employees and encourage ideas sharing.
Corporate Social Responsibility at Wal-Mart
Corporate social responsibility program and corporate code of conduct have been designed and implemented in order to handle any possible social issues related to company’s operations as well as to society at large. The CSR program enables the company to give back to the communities, where it operates, and also participate in resolving international social and environmental issues. The company is involved in environmental conservation projects, ethical sourcing; ensuring quality and moral sourcing of products from suppliers, community investment projects to improve the livelihood of the communities, as well as provides solutions to crisis response management.
In 2005, Wal-Mart participated in rescue missions that helped the victims of hurricanes and tornadoes in the south of the US, of floods in the Midwest, and wildfires in Texas. Wal-Mart took the initiative to provide food to people affected by the disasters, and also coordinated food distribution with the federal emergency authority. Wal-Mart went as far as to provide 20,000 meals, and promised jobs for all people affected by the hurricane. They had a very good approach to the crisis and did a lot in helping and doing its duty to its very customers. Even after destruction of their operations centers, the company opened doors for business after only six months (Wal-Mart 2011 Global responsibility).
The company also donates food and gives financial assistance in fighting hunger nationwide. As part of its State Giving Program, the company is interested in addressing hunger in local communities in different states. Currently, it supports the Connecticut State Giving Council with over $100,000 to expand the Food Kid’s Backpack Program.
In regard to economic crisis management and social responsibility, company has been able to avoid economic turmoil through a response program of ensuring a steady flow of revenue and increased investment. When the world was burning economically, the company sought ways to improve its sales by increasing marketing and discounts. The emphasis is placed on low prices and effective service delivery to enhance sales growth. In addition, it gives increased bonuses and overtime payments to employees to increase their income. These actions motivate the employees at Wal-Mart and help them go through the financial crisis.
Gender sensitivity has been enhanced at the Wal-Mart workplace. Under gender sensitivity initiatives, Wal-Mart considers promoting women to higher positions and empowering them economically. The company is committed to increase opportunities for women by improving their employment, education and business opportunities. To do this, the company designated an estimate of $100 million on funding and planning the activities and programs for women.
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