Write a summary of reading that include:
1)Advantages of inventory management system
2)Problems faced by Wal-Mart in using the inventory management system
Supply and Demand
Having an adequate supply of a particular product to meet customer demand is crucial to both sales increases and customer service. If a customer comes to a business to purchase a product and it is out of stock, the sale is lost forever and the customer will probably go to a competitor to find what they need. A good inventory management system, whether computerized or manual, will identify sales trends and prepare for customer needs.
Streamline Operations
Manufacturing facilities should always maintain proper inventory of the supplies necessary to produce their products. If one component is missing from the inventory, the whole production process is interrupted. Streamlined operations are an important benefit of an effective inventory management system.
Lead Time Adjustments
Inventory management systems are important for determining when to order certain items, especially for products with varying lead times. Some products take longer to receive from the manufacturer than others, and it’s important to have an inventory management system that accounts for lead time. If for example, a grocery store was going to have a sale on hotdogs, relish and mustard, but the hotdogs took longer than three days to receive while the condiments took five days, the inventory management system would need to ensure that all items were in stock in time for the sale.
Reduce Liabilities
Another significant advantage to an inventory management system is it reduces the liabilities and loss created by overstock. Similar to monitoring supply and demand, a good inventory management system will notice declines in sales or identify one-time occurrences to prevent over-ordering certain products. For instance, if a clothing store was having a sale on a certain style of jeans, it may order additional stock to meet customer demands. The inventory management system should take the sale into account before ordering more of the jeans based on the spike in sales. Otherwise, they store may have to offer even deeper discounts to get rid of the excess inventory.
2)There are both advantages and disadvantages in Joint Venture or acquisition of
local businesses. These arrangements helped Wal-Mart understand a new market
and avoid problems with local distributors. Partnerships are also the best sources of
information on local sales trends and retailers’ performance data. Moreover, these
strategies facilitate market presence and allow quicker market penetration. However,
the acquisition of local chain retailers in some countries can make people feel that
they will occupy by the foreigner. This also effect in purchasing banned from local
customers. Especially, in the country that people are nationalism such as Germany.
The acquisition of Wertkauf and Interspar mislead the establishment in Germany that
soon after caused huge number of problems to Wal-Mart.
local businesses. These arrangements helped Wal-Mart understand a new market
and avoid problems with local distributors. Partnerships are also the best sources of
information on local sales trends and retailers’ performance data. Moreover, these
strategies facilitate market presence and allow quicker market penetration. However,
the acquisition of local chain retailers in some countries can make people feel that
they will occupy by the foreigner. This also effect in purchasing banned from local
customers. Especially, in the country that people are nationalism such as Germany.
The acquisition of Wertkauf and Interspar mislead the establishment in Germany that
soon after caused huge number of problems to Wal-Mart.
quick solutions. The examples of these problems are supply chain, strong local and
foreign competition, and lots of government’s red tape. Everyone knows that rules
and regulations of Communist countries are very strict and limited. The Communist
government has boxed foreign retailers into selected countries to limit competition.
Moreover, some selected products are controlled and nominated by local suppliers
only. For instance, liquor and tobacco must be bought locally, and Chinese’s favorite
vegetables have to be bought nearby too.
foreign competition, and lots of government’s red tape. Everyone knows that rules
and regulations of Communist countries are very strict and limited. The Communist
government has boxed foreign retailers into selected countries to limit competition.
Moreover, some selected products are controlled and nominated by local suppliers
only. For instance, liquor and tobacco must be bought locally, and Chinese’s favorite
vegetables have to be bought nearby too.
Reference
(Bianco, A., Zellner, W. (2003). Is Wal-Mart Too Powerful? BusinessWeek, (3852),
p100.)
No comments:
Post a Comment