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Walmart Just In Time focus on procurement and distribution, logistics management processes and benefits of process for Walmart - Research Paper Example

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The Just-in-time inventory system The case of Wal-Mart Stores Rapid changes in technology, consumer tastes, behaviors and lifestyles makes inventories out of fashion and obsolete, thrown out to wastes leading to inventory imbalances. This situation creates an oversupply of inventories; deplete cash flow and uses warehouse spaces unnecessarily…
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Walmart Just In Time focus on procurement and distribution, logistics management processes and benefits of process for Walmart
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"Walmart Just In Time focus on procurement and distribution, logistics management processes and benefits of process for Walmart"

Download file to see previous pages In this context, this study focuses on the Just in time inventory system and the logistics management Wal-Mart is using. Just-in-Time Concept of Inventory Many authors defined just in time inventory (JIT) system differently, but it all refers to a system wherein materials are delivered just in time for its use whether in manufacturing or selling. In JIT system, it has been the practice of companies like Wal-Mart to schedule purchases and production only as needed to meet actual consumers’ demand. The purpose of this system is to reduce inventories to a minimum level, or wherever possible to a “zero level” (Accounting for Management, n.d.). As the concept would suggest, JIT for Wal-Mart is a cycle that means products for sale are received from supplier just in time to replenish the stocks on the shelves, thereby reducing inventories from their previous level. The Just in time inventory system has been applied at every stores of Wal-Mart, and as observed, the secret lies in its sophisticated just in time logistics system found in the RFID technology. The system has provided Wal-Mart a continuous tracking, real-time sales feedback from every store and plot stock depletion rates so they can arrange new deliveries just as existing supplies are about to run out. The illustration below depicts a Just in-time system inventory management that begins with the order of the customer, and the processes that channels the ordering system. JIT system is ideal for manufacturing and merchandising concerns that tends to eliminate too much inventories which are not needed in the manufacturing or sale immediately. Source of diagram: (Accounting for The logistics management of Wal-Mart, an introduction to RFID In order to understand the complexity of Wal-Mart operations and why there is a need for a logistics management process, an insight to its structure is presented. Wal-Mart manages retail stores worldwide in a range of set-up. Its segments include US market, International market and the on line ordering system. The US segment carries almost all items ordinarily found in a supermarket store, or may be easier said, “ask it, Wal-Mart has it” (WMT Profile). The international segment has various formats of stores and restaurants that include a combination of discount and grocery stores, supermarkets, supercenters, cash and carry stores, hypermarkets, general merchandise stores and the Sam Clubs. The Sam Club segment, which is available thru membership, carries merchandise, hard and soft goods and selected private-label items. Profile of Wal-Mart stores showed the following number of stores as of January 31, 2010 (Table1). Table 1 Number of Wal-Mart Retail Stores as of January 31, 2010 Number of stores Location Number of stores Location 803 discount stores United States 43 Argentina 2,747 supercenters United States 434 Brazil 1158 neighborhood markets United States 317 Canada 596 Sam Clubs United States 252 Chile 170 Costa Rica 77 El Salvador 164 Guatemala 53 Honduras 1 India 371 Mexico 55 Nicaragua 56 Puerto Rico 371 United Kingdom 279 Peoples Rep. of China Source: Yahoo Finance, 2010. Wal-Mart Stores Profile Logistics management process of Wal-Mart In the above scenario of retail stores, tracking of individual products in its different chains and warehouses is a difficult task. This would need an efficient system of monitoring and control such that Wal-Mart saw a need for a ...Download file to see next pagesRead More
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