Wal- Inventory Practices

doledromedaryElectronics - Devices

Nov 29, 2013 (3 years and 6 months ago)

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Wal
-
Mart’s Success


Inventory Practices


M
5
A2: Essay: Application Assignment


BUS
425

Operations Management



By: Cameron Stroke


April 5, 2013








Inventory is a big part of running a business that the Operations Manager must utilize all
available technologies to properly maintain a constant flow of merchandise. One of the most
vital resources available to a manager is the bar codes which individuall
y characterizes each
individual product.
“In bar coding, computer
-
readable codes are attached to items flowing
through the supply chain, including products, containers, packages and even vehicles. (Russell &
Taylor, 2011, p. 433).
This happens when the bar

code is scanned


the data is then automatically
collected and stored in an inventory control system.

I will review Wal
-
M
art and how they use
radio frequency identification (RFID) to enhance the operations and logistics of inventory.

RFID technology uses
radio waves to transfer data between the scanner and the item or
container. A tiny microchip, like a small ribbon, stores the unique identification number (UPC,
EPC) that is linked to a database that stores all the information to be accessed on a computer.

Wal
-
Mart has adopted this technology to help manage its inventory control system:

Wal
-
Mart Stores is working with suppliers of men's jeans and basics
(socks, undershirts and underwear) to be able to track these items using radio
frequency identification
tags based on EPCglobal's second
-
generation ultrahigh
-
frequency (UHF) RFID standard and carrying Electronic Product Codes (EPCs).
This effort is part of the next stage of Wal
-
Mart's EPC RFID program, which will
concentrate on the types of products that hav
e multiple stock
-
keeping units
(SKUs) and are, therefore, a challenge to manage from an inventory perspective
.

They

are addressing the opportunity to improve inventory accuracy and inventory
availability
, by
working collaboratively with suppliers on a stra
tegic basis to
make this part of
their

systems.

-

(Roberti, 2013)

Wal
-
Mart handles inventory
through

their own supply chain


such as vendor managed
inventory and continuous replenishment programs. However there are companies who outsource
these operations to third
-
party service providers (3PL).
Here the supplier owns the inventory at
their own facility
until the buyer needs it to be delivered. This allows the buyer to avoid any
inventory storage costs while sharing end
-
use demand and sales data with the suppliers through
IT.

(Russell & Taylor, 2011, p. 433).

More specifically, 3PLs concentrate on operati
onal tasks
such as shipping/handling, liaising with government agencies and dealing with warehouse
requirements.

Fourth
-
party logistics differ in that they don’t perform the operational tasks
themselves. Instead 4PLs manage 3PLs by providing logistics supp
ort by supplying service to
the customers. Additionally, 4PLs are non
-
asset based owning only computer systems and
intellectual capital. “
4PLs are a new business model, integrating resources, capabilities, and
technology of the lead enterprise(s), and othe
r organizations with complementary capabilities, to
design, build, and run comprehensive supply chain solutions.” (CarrierDirect, 2012).

Any local company would benefit from utilizing the technology of RFID and the
implementation of 3PL or 4PL. RFID will p
rovide complete visibility of a product’s location
,
faster tracking, reduction of labor time and costs, all by being more accurate than a traditional
barcode system. A company

looking to expand globally will need to stock additional inventory
to ensure worldwide orders get fulfilled immediately; this is when a 3PL can help cut down on
storage costs as well as handle all the operational work involved with warehouse shipping and
handling decisions.
A 4PL will act on behalf of the company by implementing their supply chain
strategy by integrating all resources and capital.

“Implementing a 4PL freight management
system brings our clients many benefits including access to a uniform p
rocess via our
transportation management system, scope and reach from our global operations, and expertise
tailored to the local market. Collaborating with Allyn will allow you to leverage your purchasing
power leverage and improve service provider’s perfo
rmance.”

(Allyn
,

20
09
).

4PL Main Benefits


neutrality


acting on behalf of our client and implementing their strategy


single point of contact


dedicated personnel specifically trained on our clients CTQs


open
-
book management, full transparency


no
margin on transportation, freight spend remains in the hands of our client


material flow optimization


our transport management system enables freight consolidation and "back haul" opportunities


substantial logistics costs savings



direct savings thr
ough logistics sourcing and consolidated transport spend, logistics cost
avoidance & infrastructure savings for our client


gain in productivity



the routing center can handle all your logistics needs on your behalf


global sourcing strategy & synergie
s



regular strategic reviews to identify process improvements and cost reduction
opportunities


industry best practices benchmarking



process optimization and market intelligence


data ownership & visibility



our Transport Management System captures a

wealth of logistics data, provides a high level of
inventory visibility, and produces meaningful KPI's


continuity of personnel



we provide qualified and well trained personnel and ensure personnel continuity.

(Allyn
,

20
09
).

Wal
-
Mart has become a staple

as an American retail giant by using technologies such as
RFID to manage their huge inventory. Many global companies differ from Wal
-
Mart by relying
on third and fourth party logistics
. It is clear to see the advantages and disadvantages of using
these al
ternatives, but for a local company looking to expand their business globally can benefit
from letting someone else handle the logistics function to simply their supply chain needs.




References


Russell, R., & Taylor III, B. (2011).

Operations
management: Creating value along the supply
chain
. (7th ed. ed.). Hoboken: John Wiley & Sons, Inc.


Roberti, Mark.
Wal
-
Mart Relaunches EPC RFID Effort, Starting With Men's Jeans and Basics.

2002
-
2013 RFID Journal LLC.
Rfidjournal.com.

Accessed April 4, 201
3 Retrieved from
http://www.rfidjournal.com/articles/view?7753

CarrierDirect. (2012).
The role of third and fourth party logistics providers
. Retrieved from
http://carrierdirect.co/the
-
role
-
of
-
third
-
and
-
fourth
-
party
-
logistics
-
providers.php

Allyn International
.
4PL main benefits.

Allyn International Services, Inc.

2
009. Allynintl.com.

Accessed April 4, 2013 Retrieved from

http://www.allynintl.com/Logistics/Logistics
-
Outsourcing/4PL
-
benefits