Key Benefits to Wal-Mart - Assignment Example

International Logistics Table of Contents Task Critically Appraise the Essential Pre-Requisites for Cross-Docking and Highlight the Key Benefits to Wal-Mart 3 Task 2: Critically Evaluate the Use of “State- Of –The- Art Technology” Systems to Track and Predict Levels of Inventories in Wal-Mart 6 Task 3: Critically Appraise the Advantages and Disadvantages of Wal-Mart’s In-House Transport Fleet 8 References 11 Bibliography 14 Task 1: Critically Appraise the Essential Pre-Requisites for Cross-Docking and Highlight the Key Benefits to Wal-Mart Cross-Docking In the present days, companies are focusing mainly to improve the efficiency as well as the effectiveness of logistics along with distribution operations. For controlling the costs of logistics as well as distribution potentially and the maintenance of the customer level service, warehousing has facilitated in making an innovation of a strategy known as cross-docking (Bin, 2006; Apte & Viswanathan, 2000). Cross-docking is the direct movement of the materials from the dock where it has been received to the delivery dock with minimum stay time in between. It describes the logistics practices of the loading-unloading of the materials with less unnecessary storage in the middle to make sure that the customers get a good quality of the products. To ensure a fast as well as a responsive system of transport and to avoid the causes of inefficient distribution in the centers where the distribution are being served, Wal-Mart has created an innovative and effective logistics based infrastructure (Overbeck, 2009; Apte & Viswanathan, 2000). The utmost advantage of cross docking is to improve the rate of supply chain by maintaining a steady flow of supply. Key Benefits to Wal-Mart Wal-Mart is a retailing company that runs a chain of huge discount based departmental stores as well as warehouse stores. Founded in 1962 by Sam Walton, who was born at Kingfisher, Oklahoma, in the United States in 1918, the company, Wal-Mart was actually integrated on 18th of October, 1969 with its headquarters in Bentonville, Arkansas (Wal-Mart Stores, Inc, 2012). In 1972, it was listed on New York Stock Exchange (NYSE). Wal-Mart is the third leading public corporation worldwide and is also the major private employer having employees over 2 million in 2012. Over 3,500 stores, supercenters and over 1,170 stores in all of the key countries globally were operated by Wal-Mart in 2002. Online shopping facilities are also provided by Wal-Mart through the help of the internet. The purpose of Wal-Mart is to save the money of the people that will help them to live an enhanced life (Wal-Mart Stores, Inc, 2012). The vital pre-requisite are extremely basic as well as easy to keep an eye on regarding the strategy of cross-docking. Strong structure foundations are the basics to make sure the efficiency of the overall process. Wal-Mart identifies the need of hiring committed drivers who can contribute to the trust of giving priority towards customer service. In hiring prospective drivers, Wal-Mart “filters” the ability of the drivers and determines the responsibility as well as the dependability to deal with the relevant standards primarily needed to capitalize on the value of the drivers. After Wal-Mart has “filtered” the commitments of the drivers as stated in the “Private Fleet Driver Handbook” as the code of conduct, the drivers have to follow it all the time in the secure exchange of the goods and the function they are anticipated to work on (Handfield & Nichols, 2002). After the implementation of the roles, Wal-Mart observes the progress of the drivers who are entitled to report to their assigned coordinators regarding the daily service they are doing. By evaluating these measures, Wal-Mart ensures that the roles as well as the responsibilities assigned to the drivers are accordingly done and are not hampering the efficiency of the operations regarding the distribution. The coordinators provide the information of the probable time regarding the arrival of the goods as well as the delivery to the drivers to make effective use of time. Wal-Mart expects that their drivers get a loaded truck from the point of distribution of the goods and to deliver the goods to the retailers in the stores and the time when the drivers revisit back, the trailers should be unloaded at the place of delivery (Ray, 2010). Along with the strictly imposed standards at Wal-Mart to its drivers, the structure is really well-organized regarding the distribution process that attributes towards the efficiency of the distribution practices that the Wal-Mart employs. For instance, the time of unloading is scheduled for the goods at the delivery point with two hours of intermission in the middle. The specific time for unloading the goods allows constant as well as smooth flow of distribution without the uncertainty of hurrying to complete the process of delivery. The interval of time helps the employees to work without being pressurized of doing the work unarranged. After the interval of the time of two hours, Wal-Mart assures that the goods have been unloaded and the process of distribution is performed accordingly (Wal-Mart Stores, Inc, 2012). Cross docking as an add-on procedure is utilized by Wal-Mart to make the distribution process that they are following to be proficient. In this procedure, it is required to pick-up the goods directly from the place of distribution and also to be delivered to the customer directly. Wal-Mart has been benefited immensely by the introduction of the cross-docking system. It has obtained reduction in storing and handling the finished goods as well as the viable frame to have the efficiency in the supply chain management that involves the lead time reduction, inventory turnover at a quick pace, inventory levels are forecasted accurately, safety stock reduction, reduction of reliance on the point of distribution, consequently, reducing the errors as well as the costs of training (Leeman, 2010). Task 2: Critically Evaluate the Use of “State- Of –The- Art Technology” Systems to Track and Predict Levels of Inventories in Wal-Mart Wal-Mart uses the mode of information technology as well as state-of-the-art as the technological infrastructure in the business which is an important tool today for them that provides with up-to-date knowledge of the process regarding logistical operations which enables Wal-Mart to furnish the needs of the customer in least possible time to deliver with the outstanding service that is practically the same as to customer pleasure. For instance, in most of the companies, the inclusion of e-commerce enables to provide the customers with their needs as well as the wants in the world where the business is changing at a brisk pace and it also helps them to reach large number of customers along with retaining more customers (Bergdahl & Walton, 2007). The utilization of state-of-the-art technology assures Wal-Mart to analyze the sales as well as the merchandise actively and gradually in all the stores all over the United States together with the worldwide operations. To keep in touch with their growing retail outlets and the distribution centers in terms of communication, Wal-Mart instigated its first satellite system for communication in the year 1983 to fulfill the need of increasing their operations. Communication system has benefited Wal-Mart in various ways, such as when the technicians within the satellite room talk over telephone regarding any problem in any Wal-Mart store that might have occurred due to the system, those problems can be conveniently solved. As the technicians sit in front of a computer, it shows the overall transactions in the screens. If there is anything important to communicate to the higher officials or to the stores as well as the distribution centers, it can be communicated through the satellite transmission in the television room. The system of satellite communication is being used to the maximum level which includes the employees of Wal-Mart. Wal-Mart regards the satellite communication system as one of the crucial characteristics of their overall operations (Bergdahl & Walton, 2007). Wal-Mart activates the process of information technology by the utilization of the satellite communication system. The possible human errors are reduced by Wal-Mart with the utilization of IT rather than the manual mode of processing inventories that at times becomes costly. The system of information technology enables Wal-Mart to avail the inventories straight away when required. Wal-Mart enabled itself to spread its network by using commuter while it could have collaborated with Procter & Gamble, one of the leading suppliers of Wal-Mart. On one hand, using IT helps to monitor as well as to analyze the supply of the inventories as the information is automatically updated in the system that responds directly by conveying indications to the system as well as the suppliers. On the other hand, the system puts forward a win-win resolution for the suppliers as well as the company because of the open communication system among them which results in enhancing the synchronization and the relationship between both the parties (Bergdahl & Walton, 2007). The optimum use of IT as well as the communication system was made by Wal-Mart to not only limit the use of the system to the management and suppliers but they also expanded the usage of the systems to the employees that benefited the employees to track the progress of the job and to develop the work without any pressure. In each and every store of Wal-Mart, the employees have a gadget called as the ‘Magic Wand’, which is a hand-held device as a computer connected to the in-store workstations through a network of radio frequency. The device assists the employees to determine the inventory record and delivers back-up to the stores at distribution center (Tam & et. al., 2010). The Point of Sales (POS) system is an important tool in the use of IT that monitors as well as tracks the sales of a store. The implementation of order management as well as the store redesigning regarding the goods was made feasible with the use of POS system (Brown, 2007). Establishment of ‘centralized inventory data system’ is one of the uses of IT division of Wal-Mart that enables the store executive to have the knowledge about the inventory level as well as the product location as the ‘centralized inventory data system’ is developed which monitors the progress regarding the status of the inventories. With the help of these systems, Wal-Mart analyzes the requirements of the store as well as makes it certain that every store has the capability to supply the needs as well as the wants of the customers (Institute of Management & Administration, 2002). Task 3: Critically Appraise the Advantages and Disadvantages of Wal-Mart’s In-House Transport Fleet Wal-Mart’s in-house fleet has a great advantage as it brings in the advantage of low-cost regarding the transportation of goods that is to be distributed at the stores in different location. The capability of Wal-Mart to refill the store shelves can be observed to be four times quicker as compared to its rivals. Moreover, the strict implementation of the code of conduct to the drivers of Wal-Mart increases the confidence of the company regarding the delivery of the goods on exact time as well as ‘right on the money’ (Chandran, 2003). One of the main drawbacks of the in-house transport fleet of Wal-Mart is that possessing a transport fleet may be costly as the maintenance of the delivery trucks is the sole responsibility of Wal-Mart. An added expense is clearly visible for Wal-Mart if the company wants to progress with the process of in-house transport fleet. Apart from the disadvantage regarding the added expense, Wal-Mart makes an effective as well as efficient utilization of the in-house fleet (Bragg, 2006; Coyle, 2010). The consistency as well as the efficiency of the supply chain management of Wal-Mart shows the success of the company. Wal-Mart always looks to develop as well as to discover the probable ways to provide the customers with quality services and products without any added expense. To ensure the accomplishment of supply chain management, Wal-Mart possesses a systematic and a well-coordinated process regarding the transportation to selling that would deliver the company with benefits as well as provide satisfaction to their customers (Emmett & Crocker, 2006). With the environmental transactions externally, Wal-Mart started the bargaining system in relation to prices of the goods to get to the bottom to drop-down the prices and then build up such a relationship that provides full business loyalty to the suppliers as well as the manufacturers. This signifies that Wal-Mart is eagerly looking forward for a long-term business with the suppliers. Monitoring as well as analyzing of goods in the process of transportation enables Wal-Mart to refill the shelves in the stores continuously to provide a fresh quality of products to the customers. Wal-Mart is well supported by the systematic process of communication as well as the IT system which without a doubt have positively affected the company’s efficiency and the usefulness in relation to supply chain management. This enables the company to provide a continuous service to the customers of the company, partners of trading, stockholders as well as the suppliers leading to the combination as well as the rationality of the establishment (Lussier, 2011). In business the basic principles, reduction in cost and high production enable to maximize the profit of the business. Practicing core principle on a continuous basis to improve the sales is brought by the service that the company offers without an added cost. The successfulness in finding the ways of capitalizing on each and every cost-saving scope as well as the acceptance of logistics system that is efficient has enabled Wal-Mart in earning supreme competitive benefit against the other competitors which is made achievable by the use of innovative technology (Tam & et. al., 2010). Managing an in-house transport fleet enables a company to provide good control and flexibility to respond to the needs as well as the wants of the customers. Logistics costs can be reduced as well as can be controlled by the managers with the utilization of the in-house transport fleet. A disadvantage of preserving an in-house transport fleet is the external factors that should be analyzed thoroughly as it can affect the flexibility of the company’s supply chain process (American Gas Association. Operating Section, 1986). References American Gas Association. Operating Section. 1986. Operating Section proceedings. American Gas Association. Apte, U. 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