OPMG 2258 - Facilities Project: A Case Study of Walmart's Design

This report provides a comprehensive analysis of Walmart's facilities and process design, crucial elements contributing to its retail dominance. It examines various operational processes including purchasing, inventory handling, customer service, and accounting, highlighting the importance of efficient workflows and customer-centric strategies. The report includes a scale floor plan of a typical Walmart storage facility and discusses different service process designs, such as service blueprints and swim lane maps, used to optimize operations and customer experience. It further evaluates the merits and demerits of facility operations, focusing on cost optimization, managerial control, and potential hidden costs. The analysis concludes with recommendations for enhancing agility, alignment, and adaptability in Walmart's facility management approach, emphasizing the need for continuous improvement in a dynamic market environment. This document is a student contribution and available on Desklib, a platform offering a wide range of study tools and resources.

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Executive summary
In all large firms, facilities layout is critical in determining operations efficiency and the costs
incurred in running the facilities. Whenever a firm experience a complex flow of material and
human resource, alternative approaches become a necessity in determining and evaluating other
arrangement alternatives. This paper analyses facilities and processes design and points out
various factors that are used by Walmart in managing and running its facilities and developing
relevant layouts taking into account space availability, inventory movement, and shelves
arrangement process. This paper provides an example of a floor scale of one of the facilities,
various methods available at the facility, different service process designs and the advantages
and disadvantages of using the models. The conclusion deduced from the paper indicates the
importance of facilities and processes design in running successful large retail firms.

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Contents
Introduction......................................................................................................................................4
Scale floor plan................................................................................................................................5
Processes types................................................................................................................................6
Purchasing....................................................................................................................................6
Inventory handling.......................................................................................................................7
Customer service.........................................................................................................................7
Accounting processes..................................................................................................................8
Service process design.....................................................................................................................8
Facility operations.........................................................................................................................10
Service blueprint........................................................................................................................10
Swim lane map..........................................................................................................................11
Merits.........................................................................................................................................12
Cost optimization...................................................................................................................12
Demerits.....................................................................................................................................13
Loss of managerial control....................................................................................................13
Hidden operating cost............................................................................................................13
Recommendations......................................................................................................................13
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

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Introduction
In the retail sector today, it is widely prevalent for the business to ensure the optimized setup of
facilities and processes design. The management is mainly focusing on providing efficient
operations which is critical in boosting competitiveness in the market. According to Heller
(2017), firms are now considering facility management and processes design as a means to
achieve a competitive advantage. Through proper facility management and effective processes
design, an organisation can offer excellent services and products are delivered to the final
consumer quickly while incurring low costs in satisfying the market demand, (Harsoor & Patil,
2015). However, in a competitive market setup, firms have redesigned their processes and
improved their facility management in attempts to adapt to the dynamic market environment and
take advantage of the broad global market. Managing operations and organisation’s facilities call
for a comprehensive overhaul of the business scope and the set objectives. Both long term and
short term.
Walmart is the world’s largest retail store with annual revenue totalling to $192 billion (Forbes
2019). With this considerable fortune, the retailer ranks top of the Global Fortune 500 List in
2019, (Global 500 2019). Since its establishment in 1962, the company now operates over
100,000 stores around the world. The success of the retailer has been attributed to various factors
but the key elements are its facility management and processes designing (Timilsina 2015).
Further, its style of facility management and processes designing have become among the critical
competitive advantages for the firm which has accelerated its expansion and growth as compared
to its competitors. Advanced technology and innovation continue to employ in its facilities and
processes to facilitate its efficiency of doing business. Due to these advantages derived from
facilities management and processes designing, the company has been taking refined interests in

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ensuring cost-effective processes are utilised in the firm which is characterised by incentive
alignment, agility and adaptability.
This paper will aim at analysing the facilities and process design of Walmart companies that
have contributed to its dominance in the retail business and identify possible issues that might
exist in the two variables in the current dynamic market place. Then a recommendation regarding
the issues is made which aims to establish effective and efficient processes and facility
management taking into account agility, alignment and adaptability of the management approach
adopted.
Scale floor plan
The storage and service area plays a vital role in the success of Walmart. In the business sector in
the USA, it is estimated that nearly 22% if revenue is invested in storage and facility
maintenance (Stankevičiūtė, Grunda, & Bartkus, 2012). The figure below illustrates a typical
Walmart’s storage facility with various sensitive features that have ensured optimum operation in
the store.

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The highlighted part is specifically designed to provide storage room for products whose
specifications do not fit on the natural shelf areas. The floor scale was created on a scale ration of
one to five thousand.
Processes types
Several operational processes are involved at Walmart on an ongoing basis by various team
members in the firm. The workflow is generally typical to any other retailer in the market, as
most of the firms share best practices across board mainly for several years now. Below are some
of the underlying operational processes carried out at Walmart.
Purchasing
Outlets purchasing duties have been assigned the outlet store managers. However, most of the
bulk purchasing is centralised with the outlet frontline managers reporting the needs of the store
and the levels of inventory. Employees at the store take stock levels of the list regularly. This

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includes the inventory displayed on the shelf and in the warehouse. Walmart has been able to
customise its purchasing processes to suits its managerial style. This important for the firm to
meet the specific needs of its various stores. Outlet managers are allowed to make inventory
orders whenever the stock levels reach the re-order point which ensures that the outlets rarely run
out of stock.
Inventory handling
Inventory handling is majorly the responsibility of the junior staff in the firm. The handling
process starts when the shipment is received. It includes unpacking the items from their boxes,
sorting method and disposing of the packing materials. The new inventory is stored according to
the policies of the firm. Normally, the firm observes the first in first out inventory management
style and shelve restocking is done whenever the levels drop.
Employees help in ensuring an aesthetic appeal of stock items on the shelves and store after
customers have interrupted with the earlier organisation pattern. They make sure the displayed
items are at all times clean and free of dust particles. Also, they can re-organise shelves layout to
give a fresh look to the store to attract the attention of the customers and keep them engaged
throughout their shopping time.
Customer service
Customer service forms the backbone of the retail store activities. And it acts as a lynchpin that
holds all other processes together. The primary role of the outlets is to maintain and display
items to the customers to view, interact with and make the purchase. This implies that all
activities and processes are customer-centred. Hence the need to ensure excellent customer
service at all times.

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At Walmart, the customer service process has been subcategorised into instore customer
assistance, transactional processing, and complaint handling. The instore aid is provided to help
customers find the item they are looking for with much less effort and guide the customer and
help them in making their selection choices. The transactional processing involves price ringing,
payment acceptance and packaging items purchased for the customer. Complaints handling
includes addressing things return, short change claims, possible and potential issues that might
arise between the customer and the staff and handling general dissatisfaction as a result of
services received from the store or from using the product acquired.
Accounting processes
Walmart has a centralised system of doing its accounting processes. All outlets regularly submit
relevant accounting information to the accounting department. Outlets managers regarding sales
volumes send daily updates, lost inventory, item returns, payroll data and necessary information
on bank deposits before the commencement of the next day business cycle. This is compared to
what is recorded in the automated system.
Service process design
Process design services are crucial for business support, service assistance, business operations
and field service support. It is critical in planning and organising employees at their place of
work. In other words, service design is the process of organising and planning the workforce in
the organisation, managing relevant infrastructure, and communication, (LeCavalier 2016). It
plays a significant role in informing the changes introduced in the company.
Walmart has developed and implemented service design to ensure best practices in the firm and
design the methods following the needs of the customers and the competencies of its

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infrastructure. The adopted service design is highly user-friendly and is simple and relevant to
the customers of the retailer while ensuring the design competencies and competitiveness of the
firm. In this view, the development of the service design requires a range of disciplines ranging
from management policies, information ethnography and interactions of all the involved parties,
(Rodrigue 2017). The design concept is displayed in a more visual way using relevant
representation according to the organisational culture, competency skills and skills of the
personnel in the organisation involved in service delivery and processes.
In its operations, Walmart views service design as among the essential component of
management. The core features that have influenced service design in Walmart are; needs and
wants of the customers, convenience of the system to the user, price ratios, quality of the
products provided and capability of its processes. The following is an illustration of a service
design that can be utilised in Walmart

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Facility operations
Facility operations cover the management of all activities in an organisation. It manages all
processes, people, operation tools and relevant assets required in running the facility smoothly.
Facility operations include all operations carried out in the organisation on a day to day basis and
also manage possible future facility improvement and maintenance, (Logan 2014 January). The
program comes with its bundle of merits and demerits.
Service blueprint
Service blueprint has allowed the giant retailer to look beyond the retrial services and the quality
of products it is supplying to the customers. Walmart has excelled in looking into its operating
system in closer pixels to tailor to suit the expectation of customers and bring their experiences
to life. With the advancement of technology, it is apparent that most of the retailers are not

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gaining as much from physical stores. Recently Walmart shut down slightly over 60 stores in the
United States. This shows the considerable problem retailers face while operating physical
stores. This has led the retailer to explore ways to solve the problem and overhaul the operation
plan with the introduction with the e-commerce services. However, the retailer has retained most
of its traditional values. To address the challenge faced, the retailer developed a service blueprint
that will ensure the successful implementation of the e-commerce services meeting the market
demand and ensuring the customer experience is retained.
Swim lane map
Walmart has made use of swim lanes to differentiate duties and responsibilities within the firm.
Horizontally arranged swim lanes are used in managing various sub-processes that affect the
entire firm. The swim lanes clarify processes steps and the persons responsible for each step as a