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It has employee more than 2.1 million.</li></li></ul><li>
Wal-mart & the COMPETITION<br /><ul><li>To sustain competitive advantage, a firm must ensure that its competition finds it hard to imitate its chosen position.</li></li></ul><li><ul><li>Operations Management ("POM") is about the transformation of production and operational inputs into "outputs" that, when distributed, meet the needs of customers </li></ul>Outputs<br />
Operation Strategy<br />Capturing market share with “everyday low price” strategy.<br />“the process of creative destruction”.<br />Responding competitors strategy. (opened “Pennies-n-Cents” stores in against dollar stores).<br />Cultural adaptation.<br />Training employees because people are key to Wal-Mart's business<br />Buy at less to sell at less.<br />Withdrawal strategy.<br />
Competitive Strategy<br />Different shop design for each demographic groups.<br />All product in one store.<br />Competence in use of information technology for logistics system.<br />Highest customer satisfaction<br />
Productivity<br />Creating more than 210,000 jobs in the U.S. <br />Saves working families more than US $2,500 per year.<br />Discounting on food alone boosts the welfare of American shoppers by approx. $ 50 billion per year.<br />
Industry Environment - Porter's five forces of competition<br />
1.Rivalry of Existing Competitors:<br />· Wal-Mart has a strong competitive advantage against its competitors Kmart and Target. · Rivalry in this industry is not as strong for the competitors compared to Wal-Mart.2.Barriers to Entry:<br />· High because it is hard to form a large organization that will be competitive at the same size as Wal-Mart with such low prices.· This industry has high barriers because it is too expensive for new firms to enter and to be competitive.<br />
3.POWER of Buyers:· Weak because basically the prices are low from the beginning so there would not be any potential for buyers to bargain with.4.POWER of Supplies:· Weak because Wal-Mart uses its own distribution centers that are located close to its stores. · Wal-Mart is also far and away the biggest customer of virtually all of its suppliers. It's scale of operation allowed it to bargain...<br />
5. Substitutes:· Medium because it depends on where you live and what type of Wal-Mart stores are closer to you.<br />· Substitutes would be going to another grocery store, a toy store, a hardware store; basically going to specialty stores instead of going to one store that has everything in one, as a Wal-Mart can. <br />
Capacity Planning<br /><ul><li>The process of determining the production capacity needed by an organization to meet changing demands for its products.
The process of determining product quantity needed by a firm to meet the demand of consumers.</li></li></ul><li>Essential elements of Capacity Planning<br />Among all elements for capacity planning, followings are essential for Wal-Mart: <br /><ul><li> Facility
Facility Factor<br />Wal-Mart U.S. 602.9 million sft.<br />Wal-Mart international 269.9 million sft<br />Sam’s club79.4 million sft<br />Total Size 952.2 million sft.<br />Average size of each outlet<br /><ul><li>Wal-Mart supercenters
A networked connection with store inventory with suppliers for inventory supply when needed.</li></ul>Shop location<br />Shop layout<br />ShopSi z e<br />Warehouse Si z e<br />Warehouse layout<br />
Product and Service Factor<br />Price<br />Sales<br />Suppliers<br />Every day low price.<br />Lower price than competitors (price leadership).<br />Lower price due lower operational cost.<br />
Product and Service Factor<br />Price<br />Sales<br />Suppliers<br />Net Sales of walmart in 2009-2010<br />Wal-Mart U.S. $2 58.2 billion<br />Sam’s Club $ 46 .7 billion<br />Wal-Mart International $ 100.1 billion<br />Worldwide Total $ 405 billion<br />
Product and Service Factor<br />Price<br />Sales<br />Suppliers<br /><ul><li> Partners with more than 2,5 0 0 minority-and women-owned business suppliers.
Networked communication & Just In Time .</li></li></ul><li>Human Resource Factor<br />Number of employees<br />Age, Gender and sexual orientation<br />Skill <br />Wages<br /><ul><li> 2.1 million employees all over the world
Largest privet employers in US, Mexico & Canada.</li></li></ul><li>Human Factor<br />Number of employees<br />Age, Gender and sexual orientation<br />Skill<br />Wages<br /><ul><li> 869000 women working in Wal-Mart.
More than 430,000 employees are 50 and over.</li></li></ul><li>Human Factor<br /><ul><li> Both Skilled and low skilled employees.
Employs senior citizens who needs supplemental income.
Employs Students who needs skill and experiences. </li></ul>Number of employees<br />Age, Gender and sexual orientation<br />Skill<br />Wages<br />
Human Factor<br />Number of employees<br />Age, Gender and sexual orientation<br />Skill <br />Wages<br /><ul><li>Hourly wage rate.
Wage of $ 1 2 per hour for semi skilled employees.
Higher wage rate for skilled employees and in urban outlets.
Bonus on performance.</li></li></ul><li>Reliability<br />
SUPPLY CHAIN MANAGEMENT<br />“ Supply chain management involves the flows of material, information and finance in a network consisting of customers, suppliers, manufacturers, and distributors”<br />
THE REASON!<br />Efficient supply chain<br />Deals with suppliers for e.g P & G<br />Service Differentiation- different deals with different customers.<br />Sets different service policies, such as service intervals, or delivery times, for different groups of accounts and often products.<br /> key to providing excellent, consistent service at a reasonable cost<br />
Just in time (JIT)<br />Lowers holding cost<br />Lowers ordering cost<br />Wal-Mart has made ordering small batches with greater frequency a profitable reality.<br />R educes safety stock and EO Q<br />R educes lead time<br />
RFID<br />Radio frequency identification<br />Keep track of goods at any point in time, and also tells you where it is.<br />Eliminates physical counting of inventory<br />Is in line wit JIT.<br />As soon as inventory levels go down, Walmart can re-order.<br />Implemented in 2 0 0 5.<br />
Why RFID ?<br />Reduce the possibility of inventory shrinkage and out-of-stock situation.<br />Improve fulfillment rates.<br />Improve the customer service.<br />Reduce inventory and labor cost.<br />Eliminate many manual process and improve the operation efficiency.<br />