Walmart's Inventory Management Challenges: A Systems Thinking Approach

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MGT603: Systems Thinking
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Introduction
The decision-making process is an essential process which enhances the efficiency and
sustainability of the organisation. For developing effective decisions, organisational managers
have to implement appropriate decision thinking approach and decision-making tools. Here, the
report focuses on the challenge which is faced by Walmart and how these challenges can be
overcome by implementing decision-making tools within the organisation.
The problem faced by Walmart
Walmart is one of the largest retail companies in the world which operates more than 500 stores
globally. It is analysed by the operational manager that lack of decision-making theories has
developed certain issues related to inventory management. The poor systematic process has
reduced efficiency in managing inventory management which causes excess or shortage in
inventory which creates a bad impact on the profitability and sustainability of the company in the
market (Russell & Taylor, 2011).
Now, it is the responsibility of the operational manager to take further steps which will help in
overcoming the inventory challenges in an appropriate manner. For implementing effective
approaches managers have to develop a critical thinking approach through which they can fix
inventory problems in an effective manner. There are various decision thinking theories which
help in developing effective decisions. Stakeholders are playing an important role in the growth
and sustainability of the company (Russell & Taylor, 2011). It is necessary for managers to
understand all the aspects and consequences which directly create an impact on the key
stakeholders of the company. Decision-making process enhances deliberate and thoughtful
decisions by determining each and every information through which better alternatives can result
in the context of the company. Decision-making tools develop opportunity through which help in
selecting more suitable approaches for the organisation. Decisions making process is an effective
method which should be essentially applied in Walmart in a timely manner which helps in
reducing challenges related to inventory management.
Decision-making tools help in selecting suitable paths, action, and alternative through which
productive result can be generated in the context of the organisation. There are some essential
decision-making tools which help in developing effective approaches towards solving inventory
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management problem of Walmart. Rich picture and CATWOE are two innovative decision-
making tools which enhance critical thinking skills and efficiency of managers.
A rich picture is an artificially drawn picture which allows managers to think differently and to
analyse all the interpretation in a different manner. It helps in focusing on the integral department
of the organisations such as manufacturing department, with the help of Rich Picture
manufacturing manager can focus on the requirement of equipment which will help in enhancing
the performance of manufacturing department by implementing effective approaches. The main
objective behind adapting Rich picture as a system thinking tool, as it not only helps in focusing
on the needs and requirement of business for accomplishing the goal but it also helps in
developing creative thinking skills through which organisational manager can take better
decisions (Russell & Taylor, 2011). The main goal of Walmart is to overcome the inventory
management issue through which they can retain their sustainability in the market. Along with
this, the Rich Picture tool is used as a mind map in the organisation which helps in identifying
the causes and reasons behind inventory issues. Through which Walmart can identify the factors
in which are they are lacking in managing inventory management (Muller, 2019).
The CATWOE which is used in the organisation has also played an effective role in developing a
system thinking approach in relation to overcoming issues and in maintaining effective inventory
management.
Customer: Help in determining the client’s requirement and help in concentrating on their
requests and demand and help in examining the factors which will prompt advantages for the
organisation (Mehregan, Hosseinzadeh, and Kazemi, 2012).
Actors: Building up effective methods which express the jobs and roles performed by every
worker in the office. Such concepts will help in creating effective balance at the workplace
which will help in enhancing the performance of the organisation.
Transformation: Help in determining factor which is basic to change in a framework. Such
components will help in concentrating on the profitability and sustainable growth of the Walmart
Company.
World view: Develop efficient thinking methodology which will improve the presentation of the
firm all around and help in supporting the change in an appropriate manner.
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Owners: Provide power to supervisors and direct them in controlling and on concentrating on
the exhibition of the office and prepared them to take innovative decisions which will prompt
profitable outcome for the organization (Mehregan, Hosseinzadeh, and Kazemi, 2012).
Environment: Help in determining the ecological elements which are reducing the performance
of the managerial and organisational departments. Alongside this, there should be an innovative
technique should be implemented in the management which helps in defeating the challenges in
an effective manner.
Root definition with the use of CATWOE will help in analysing the possible situation actions
and help in developing methods to reduce the impact of negative actions which are taken in the
organisation. Along with this, this tool help in analysing appropriate actions which would help in
setting up approaches which will handle inventory management in the best manner (Arnold &
Wade, 2015).
Optimal solution to overcome problems
The main motive of Walmart is to focus on overcoming the inventory management issues with
the help of using system thinking tools such as CATWOE with root definition and Rich Picture.
There are two ways in which the problem related to inventory management can be overcome in
an effective manner.
1. Develop stock management report and register continuously which will help in analysing
the requirement in the market and develop effective balance in production and
manufacturing department (Roy, 2017). The main motive is to develop effective balance
which could maintain systematic procedure and increase the productivity of the company
(Arnold & Wade, 2017). The system thinking tools like the rich picture will in focusing
on future needs as per the situation analysis and develop a cost-effective structure for
inventory management.
2. By analysing the customer demand and requirement, operational manager of the company
can analyse the production to be done in the organisation and can set more effective ways
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which will help in maintaining sustainability at the workplace and build effective
inventory management (Roy, 2017).
Conclusion
From the above findings, it is concluded that system thinking tools such as CATWOE with root
definition and Rich Picture is playing a vital role in handling the balance in inventory
management of Walmart. The two proposed solutions should be adopted by the organisational
manager which will help in enhancing productivity and reducing challenges related to inventory
management.
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References
 Mehregan, R., Hosseinzadeh, M., Kazemi, A. (2012). An application of Soft System
Methodology. SciVerse ScienceDirect. Procedia – Social and Behavioural Sciences. Vol.
41. Pp 426 -433
 Russell, R.S. & Taylor, B.W. (2011). Operations Management: Creating Value Along the
Supply Chain, 7th edition, John Wiley & Sons, Hoboken, New Jersey. Chapter 1, pp. 1–
31
 Arnold, R.D. & Wade, J.P. (2015). A definition of systems thinking: A systems approach.
Procedia Computer Science, 44, pp.669-678.
 Arnold, R.D. & Wade, J.P. (2017). A complete set of systems thinking skills. Insight,
20(3), pp.9-17.
 Roy, E. (2017). The 9 steps you need to solve your inventory problems. Retrieve from:
http://www.tradeready.ca/2017/topics/supply-chain-management/9-steps-need-solve-
inventory-problems/
 Muller, M. (2019). Essentials of inventory management. HarperCollins Leadership.
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