OPS 6310 | Management | A Case Study of Operations Management

1. Within the context of concepts and principles of operations management, state the problems that might arise because of WalMart’s strategy, quality management, inventory, service design and location planning?

2. Develop alternatives to solve at least one of these problems.
3. Discuss the advantages and disadvantages of each solution you suggest.
4. Select the best solution and make recommendations.

By analysing the various aspects of operations management, some of the problems that might be faced by Wal-Mart are:

• Regular training: For keeping the employees ready for the changing environmental condition as well as change of strategies, inventory, quality management, location planning and service design that is made by the company, regular training is very much essential. For this regular changes in the training program needs to be made.
• Complexity in business model: As they have flexibility in various operation management aspects hence complexity of the business model increases. This is because changes in the way of doing business happen very often (Chuang, Donegan, Ganon & Wei, 2011).
• High turnover: Due to low wages that company offers to its employees they are facing high employee turnover and they had to invest a lot in training and learning programs.
• Data Security Concerns: It is found that due to higher use of information system, the concerns related to data security increases.
• Quality issues: Since Wal-Mart maintains three levels of quality tiers hence it can create issues related to quality in the areas where it maintains lower quality products. As it maintains lower quality for most of its brands hence it can create issues related to customer experience (Chan, Unger & Beaumont, 2011).

Alternatives to solve one of these problems

Wal-Mart is facing problems related to high employee turnover which is a serious challenge for any firm. This is because they have to continuously spend high amount of money in training new employee that too when the companies business model is highly flexible. In order to resolve this problem, Wal-Mart can make strategies related to rewards and benefits.

• Financial rewards: Performance management system needs to be implemented in the organisation with defined criteria to earn incentives and bonuses. Financial rewards also acts as a motivator for higher performance from the side of employees as well as it reduces employee turnover (Pope & Pope, 2015). The criteria for achieving these financial rewards must be something that can be easily achievable.
• Fulfilling other demands: Wal-Mart should also fulfil the other demands of the employees such as leaves and holidays, higher pays on government holidays, changing shifts, giving work according to the preference and knowledge of the employees.

Advantages and disadvantages of each solution

There is both advantage and disadvantages attached with each solution that is proposed in the above question.

Financial rewards: For this alternative advantages and disadvantages are as follows:

Advantage

• It does not cost company too much as the rewards and bonuses are only given to the employees that perform as per the expectation of the company. Less costing will also not affect the cost leadership strategy of the firm (Kramer & Pfitzer, 2016).
• It acts as a motivational factor which is again a challenge for the modern day business. This is also crucial for healthy employee relations.

Disadvantage

• The disadvantage of this solution is that the employees who will not receive bonus or benefit due to any reason might get demotivated easily.
• It is not easy to evaluate the performance of each and every employee as their skills and job area is different and any lag in the performance evaluation may have negative effect on their performance (Wakamatsu & Wakamatsu, 2017).

Fulfilling other demands: For this alternative advantages and disadvantages are as follows:

Advantage

• It will maintain the company’s position in terms of reducing the cost of operations and hence would benefit them in their strategy of providing products and services at lower cost.
• It will also boost the morale of the employees as they find themselves in a position where company thinks for them (Market Screener, 2018).

Disadvantage

• It does not last for very long time i.e. the motivation achieved is momentary.
• The ground managers face problems when unnecessary demands of the employees arrive. This is a big problem in the case of daily staff management.

Best solution

Among the two solutions that are presented in the above question the best solution will be to take use of rewards and bones. This is because financial rewards motivate employees for longer period of time. It also motivates employees to perform in a better manner as compared to other solution.

Recommendations

It is recommended that company reduces the complexity in the business model. In order to retain employee regular training is required so that they can ensure their development. Along with this they must increase the salary bases up to the level that other companies are giving to their employees. Development opportunities must be given to the employees that have worked for considerable amount of time.

References

Chan, A., Unger, J., & Beaumont, D. (2011). Did unionization make a difference? Work conditions and trade union activity at Chinese Walmart stores. Walmart in China.

Chuang, M. L., Donegan, J. J., Ganon, M. W., & Wei, K. (2011). Walmart and Carrefour experiences in China: resolving the structural paradox. Cross Cultural Management: An International Journal, 18(4), 443-463.

Kramer, M. R., & Pfitzer, M. W. (2016). The ecosystem of shared value. Harvard business review, 94(10), 80-89.

Market Screener, (2018) Wal Mart Stores : Escaping the vicious cycle of employee turnover. Retrived from: https://www.marketscreener.com/WAL-MART-STORES-4841/news/Wal-Mart-Stores-Escaping-the-vicious-cycle-of-employee-turnover-26151478/

Pope, D. G., & Pope, J. C. (2015). When Walmart comes to town: Always low housing prices? Always?. Journal of Urban Economics, 87, 1-13.

Wakamatsu, M., & Wakamatsu, H. (2017). The certification of small-scale fisheries. Marine Policy, 77, 97-103.