Improving Inventory Management at Walmart: Challenges and Solutions

This report delves into Walmart's inventory management practices, highlighting the challenges the company faces, particularly the 'out-of-stock' issue that impacts customer satisfaction and sales. The report identifies the root causes, including inefficient backroom management, e-commerce integration complexities, and supply chain volatility. To address these issues, the report recommends the implementation of RFID technology for real-time tracking, improved demand forecasting techniques, and the use of reliable order point formulas. The potential impact of these solutions on Walmart's cost structure and customer satisfaction is also discussed, emphasizing the importance of balancing supply and demand through strategic supplier selection. The report concludes that effective inventory management is crucial for Walmart's success and can be achieved through the adoption of the recommended methods, leading to increased production, sales, and customer loyalty. Students can find this report and many other solved assignments on Desklib.

WALMART’S INVENTORY
MANAGEMENT

INTRODUCTION
• The inventory management is a
component in the supply chain
management
• The inventory management is a
complicated process especially for
the larger organizations.
• The present repot will deal with the
inventory management of Walmart.

THE COMPANY OVERVIEW
• The first store of Walmart opened in the year 1962 in Rogers, Arkansas.
• According to the reports of 2017, the company owns the revenues of $485.9
billion.
• Almost 63 % of the revenues come from the U.S operations.
• The company is a private employer employing almost 2.3 million people.
• It serves more than 260 million customers per week and 11, 718 retail units
are there in 28 countries.
• It is an America multinational retail corporation (Trujillo, 2019).It operates a
chain of the hypermarkets, the grocery stores and the discount department
stores.

THE INVENTORY MANAGEMENT
• The Inventory management of Walmart is one of the most
crucial part of the entire supply chain of products.
• Recently, the executives of the company have
acknowledged the presence of an inventory management
issue
• The survey on the employees revealed the fact that, the
store back rooms were beyond the control.
• It made the management of products according to the
needs, a failure.

IDENTIFICATION OF THE PROBLEM
• It has been identified that Walmart is facing problem of “out-of-stock”
inventory that is effecting the business up to greater extent Forbes.com.
(2019).
• The Walmart Inc. has been telling the customers that some products are
“out-of-stock,”.
• According to Nassauer (2019), it has occurred after the retailer has changed
the e-commerce system for avoiding the orders which are too inexpensive to
ship.
• The problem of out-of-stock in the inventory is disturbing the customers
because they are not finding the goods which are in high demand.

DISCUSSION OF THE PROBLEM
• The issue of “out-of-stock “can decrease the inventory productivity and can
cause sales loss along with the loss of customer good will (DeBusk et al.,
2018).
• Sometimes, proper instructions are not sent to the stores regarding the new
items.
• However, it also needs more employees in the store for keeping track of the
inventory.
• The volatility in the supply chain is the major reason behind the problems.
• The company is simultaneously balancing the in-store logistics along with the
e-commerce that is creating more uncertainty.

SOLVING THE INVENTORY ISSUE

RECOMMENDATION
• The company can use the RFID or the Radio Frequency Identification tags which allows to
rack every product in the store easily(Dearsystems.com, 2019).
• It makes the entire process of stocktaking faster and efficient. It can retrieve the product
where and when necessary.
• The company can improve its inventory management system and track the products easily.
The balance of supply and demand can be kept easily by using this technique.
• The company should also forecast the demand to evade he inaccuracy in the forecasting.
The best practices are determining what to measure and how it can be measured(Gagliordi,
2019).
• The company is also suggested to use a reliable order point formula.

IMPACT ON COST BENEFITS OF WALMART
• The solutions will impact on the company’s cost structure by increasing it
up to greater extent.
• The heightened customer satisfaction will subsequently increase the
production and sales of the company.
• The more there will be proper stock in the inventory, the more they will
be able to deliver the customers in the most desired manner.
• The accurate selection of the suppliers to balance the supply and demand
of the goods can easily save Walmart from the issue of “out-of-stock”.

CONCLUSION
• Therefore, from the above discussion, it can be seen that inventory management is an
essential part of the entire supply chain management
• In Walmart there are some issues in their inventory management which can be addressed
by the application of the above recommended methods.
• The solutions will impact on the company’s cost structure by increasing it up to greater
extent.
• The heightened customer satisfaction will subsequently increase the production and sales
of the company.
• The more there will be proper stock in the inventory, the more they will be able to deliver
the customers in the most desired manner.

REFERENCES
Chaiyawantakee, S., Srimongkol, P., Bunsiri, P., Lanak, K., & Wilkison, P. B. (2015). U.S. Patent
Application No. 14/338,498.
Dearsystems.com (2019). Out of Stock? Here are 5 Ways to Prevent Stockouts for Good | DEAR Cloud
Inventory Management. [online] DEAR Cloud Inventory Management. Available at:
https://dearsystems.com/out-of-stock/ [Accessed 12 Mar. 2019].
DeBusk, B. C., Sewell, A. M., Hodge, G. S., & Fox, S. J. (2018). U.S. Patent No. 9,990,466. Washington,
DC: U.S. Patent and Trademark Office.
Hufschmid, D., & Collett, G. C. (2017). U.S. Patent Application No. 15/394,149.
Panmore.com (2019). Walmart’s Inventory Management - Panmore Institute. [online] Panmore
Institute. Available at: http://panmore.com/walmart-inventory-management [Accessed 12 Mar. 2019].
Tirinato, J. A., Zelin, M. P., Gibson, P. A., Zaltsman, L., & Davis, G. (2018). U.S. Patent Application No.
10/024,734.
Trujillo, P. (2019). Walmart Is Addressing Inventory Problems With a New System. Retrieved from
http://www.waspbarcode.com/buzz/walmart-2/