Principal of Logistics Management

Question: Discuss about the Logistic Management Of Wal-Mart. Answer: Introduction Of Walmart Wal-Mart is basically the retail store in which has become the worlds largest and successfully provided with exceptionally less pricing, under one roof to its customers. Wal-Mart is known for vast assortment of the products. It has begun its operations in the year 1964 and since then it has become the world leader in the retail marketing (Smith Agrawal, 2000). Since then Wal-Mart has near about 138 million customers in a week, operated in 4750 stores. The operations and management conducted in Wal-Mart are flexible which encourages the employees. The major activities conducted in the Wal-Mart stores are related to non-food, groceries, pharmacies and electronics. Wal-Mart has such strategies which can be molded when it comes to empower their suppliers and hence in developing order cycle management. The Interfaces Wal-Mart has one of the largest supply chain management in the US and hence globally (Levi and Kaminsky, 2000). In the present criteria the transportation that does operate now days in Wal-Mart is in about 28 states along with its 36 transportation offices. In order to increase the efficiency of the Wal-Mart it has increased the number of stores in about 20 regions and more distribution channels in the countries other than US as Tennessee, Shelbyville, Georgia, New York, Florida and Carrolton etc. The products of Wal-Mart, to the distribution channel are moved in trailers and from the warehouse to the retail stores by trucks (Agrawal and Smith, 2013). The strategy by which the efficiency of the logistics is increased is done by setting the time for arrival. This is done in the mid night generally which shall not cause inconvenience to the customers and hence increases the efficiency. Therefore, logistics within the Wal-Mart operated is efficient as it includes proper planning, managi ng, movement and the proper flow of information. These are the activities which enhance and optimize the activities included under the logistics management. This gives the customers optimum level of satisfaction. Interfacing Of Logistics and Marketing Logistics and marketing interfaces includes in it the forecasting of demand, packaging of the products, finished stock of the goods, transportation and support (Riccio, 2011). Logistics when combined with the marketing tools contribute towards the results which are actually beneficial for the profits of the company. Logistics is considered to be the most supporting for the purpose of marketing which with the help of the marketing activities takes place in providing the efficiency to the customers. The marketing mix which includes the price, promotion, product and place are the four Ps of marketing. In addition to it, Wal-Mart has to maintain the food items which are there in order to attract the audience. Also, the stock kept has an impact upon the brand image of Wal-Mart and hence as a result the customers of Wal-Mart tend to give up on the ability of buying decision. This may decrease the loyal customers sometimes (Wal-Mart Stores Inc, 2015). Wal-Mart has consistently been focusing upon managing the stock control so as to decrease the pricing of the products. Lastly it has been seen that the logistics are also affected by the kind of products it has as they may vary upon the perishable item and non-perishable items. This can be seen by the results in achieving the economies of scale. As a result, the promotional activities have an impact on the logistics management which helps in managing the logistics department further along with maintaining excellent brand image. Logistics Interfacing Along With Production Management Logistical interfacing along with the production activities includes the inbound raw material inventory, transportation, warehousing and process scheduling. The storage of the raw material and controlling whole inventory totally depends upon the production quality of products of Wal-Mart. The important activity of supply chain management is transportation which shall help in maintain the relationship with the core suppliers (Meindel, 2002). These transportation activities are always affected by the production activities so that the flow of the information regarding the raw material which is in process, in plant, in warehousing and such others. Logistics Interfacing Along With Accounting and Finance The interfacing of logistics with the finance and management activities include the inbound budget and hence the allocation of the resources available in an organization. Every organization flourishes by eliminating the costs for the process of the logistics. Wal-Mart has found to be struggling upon this cause in order to achieve the economies of the scale. Costs basically in terms of reduction and profit maximization are affected by the activities and the procedure conducted in the supply chain management (Tayur and Ganeshan, 2000). The inbound procedure of logistics has huge impact upon the total profits of company, inflows and outflows of cash, total cost of production and hence managing the risks. As a result these are the important factors to be focused for improving the financial performance of the company (Trunick, 2011). Wal-Mart uses the inventory system as vendor managing which shall give the suppliers liberty so as to manage the in store inventory which shall further help in achieving the economies of scale (Brea-Solis, Casadesus-Masanell Grifell-Tatje, 2012). This shall also result in increasing the sales and hence revenues. (Source: Wal-Mart, 2016) The Order Cycle Of Wal-Mart Wal-Mart provides its customers the services so that they can do their order processed which helps the customers with in placing the orders with their phones, over the internet and other assisting applications. The sales hence configured helps in analyzing what are the requirements of the customers. This ensures taking care of the optimum level of satisfaction made by customers. Shipping of the total orders received shall be planned in accordance with the system and shall be coordinated with determining the orders received in the lined up manner so that they can be shipped in proper way on that particular location at the right time and there are no order gaps (Om Prompt, 2016). Moreover, the quality check shall also be included in the way the consumers receives the products. The things that shall be kept in mind inbound shall depend upon the perishability of the good and hence they are to be served. In all Wal-Mart has the automated inventory control managing system which shall help with the organization with the management of operating the inventory and hence reflects the respective changes accordingly (Abernathy, Dunlop, Hammond and Weil, 2001). Further, the credibility of the customers is also an issue which shall be identified as by looking onto the address provided and also the other details. These things can be verified by looking at the credit score of the customers. The total invoices are made after computing the total discount offered, including the taxes and other charges additionally. That is why it is important to look upon the factors of credibility of the customers to get the products delivered. Wal-Mart tends to maintain a long term relationship with the customers with the help of guidelines of customer relationship management system. This is done by offering the loyal customer discounts based on the sales generated by the customer, membership discounts and other lucrative deals offered to the customers. So as to satisfy the customers the post sales activities ensures to retain the customers for longer period of time. Wal-Mart has such system which is advanced in scheduling the delivery of goods and services in time. (Source: Pacmanfull, 2016) Obstacles With the Order Cycle and its Systm Even though the system of order processing being automated, Wal-Mart still has to face some of the challenge with the in time delivery of goods and services to its customers (Chung, 2016). As for now the increasingly the customers have become more demanding in delivering the same as per their expectations. However, meeting their higher expectations becomes difficult for the producer to attain the same. This becomes a challenge for them. Also, it can result in dissatisfaction of the customers and hence making the system more complex along with losing the customer permanently. Perhaps this is a huge loss in regard of the company. In all it is equally very important for the organization so as to maintain and retain the old customers along with making the new ones (Shapiro, 2001). These are such complexity issues which shall result in the delay with the delivery of the goods. Another challenge is the issue faced with the time delivery of the product faced by the company. The reason behind this is the complexity that is faced with the supply chain management of the logistics systems (Sourcing Journal, 2015). It has been known that Wal-Mart has there are certain steps that are to be taken in order to improve upon the exact time delivery of the goods and maintain the order processing cycle of Wal-Mart. Recommendations The delivery system opted is the real time, by Wal-Mart. The main purpose of opting this is to deliver these products and services in given span of time. Benefit behind choosing this system is that, it can be used to keep a track of the total orders taken by the customers. By doing this there will be optimum satisfaction received by the services delivered to customers, if they are on time. This shall help in the real time taken and hence gives the updates regarding the orders. Inventory Management of Wal-mart Among all the tools, inventory management is one of the biggest contributor which leads an organization in achieving success. Keeping in mind, the factor such as the size of an organization is beneficial for being more effective and efficient in terms of the inventory management (Hopp and Spearman, 1996). This is critically most important factor for any organization which is responsible for the key management in an organization. Wal-Mart uses the advanced technologies which are more innovative and improves the management performance. Wal-Mart has many types of the inventories involved with it which shall fulfill the role of beneficial supply chain management. Following are the types of inventory which are most commonly practiced in an organization: Inventroy in Transit These are the goods which are arrived at the stores and are then stored in the inventory. These are then replenished time to time (Viswanadham, 2000). Role of this type of inventory can be concluded as most supporting which shall further is sold from such to the customers.This is important for an organization which shall refer to the goods that are in transit. These refer to such goods which are still in transit that is, it tells about the global extent of Wal-Mart supply chain management. Inventory Buffering Inventory that is related to be kept as for an extra margin just in case is the demand of such goods fluctuates is the type of goods known as the buffered goods. The role of inventory buffering process is to ensure about the total capacity of an organization which can be used in the sudden situations so as to satisfy the sudden increase in demand of the products. Inventory Anticipated Wal-Mart also takes help of the anticipatory inventory which shall support with the buffering of inventory. However, these anticipatory goods shall be used in maintaining the goods for the seasonal purpose. For instance, during, on or before Black Friday the inventory stock is increased so as to satisfy such massive demands which arise in the market during such special occasions and shopping fests. Hence, role is very clear that the purpose of this inventory is to enable the organization in satisfying the exceptional demands arises during the time of festival and other occasions to be anticipated. The inventory management across the supply chain management can be done by the help of ABC analysis which includes the total goods which are sold at the stores are categorized the category A. These items are calculated further and kept on monitored. Category B has the inventory which shall be used for the operation and management and maintenance of the office equipment. Further, Category C, includes the items which are least recorded and monitored such as the office paper supplies. These are the operations that are conducted in the inventory management, which is used by Wal-Mart to improve upon the efficiency and effectiveness in managing the inventory. Conclusion According to the report it can be concluded after analysis of the supply chain procedure. Along with the interfaces of logistics with production, marketing and other accounting and finance department of Wal-Mart. The inventory that is used in it shall be affected by the production and manufacturing procedure conducted in it. Resources shall be allocated by the proper interfacing with the financing and accounting done with the logistics. Wal-Mart follows the system automated procedure which has the advantage and challenges of its own. Also, the problem faced with the real time inventory and its deliver for the respective products and services for which it needs to be integrated with the real time visibility. This is beneficial for satisfying the customers with fastest delivery options. References Abernathy. H,. Dunlop, T,. Hammond, H,. and Weil, D. (2001). Harvard Business School. Retrieved from:https://hbr.org/2000/11/control-your-inventory-in-a-world-of-lean-retailing. Agrawal, N., Smith, S. A. (2013). Optimal inventory management for a retail chain with diverse store demands.European Journal of Operational Research,225(3), 393-403. Brea-Solis, H., Casadesus-Masanell, R., Grifell-Tatje, E. (2012). Harvard Business School. Retrived from: https://www.hbs.edu/faculty/Pages/item.aspx?num=47628. Chung, S. 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