Walmart is a retail chain store that provides customers with a low-cost option to its products. More than 50% of the products from Walmart are groceries and consumables, and thus the main work activity of its workflow is distribution. The company’s mission statement is geared towards ensuring low-cost products to consumers and this impact on overall efficiency and effectiveness of its workflow (Crossdock Manitoba, 2012). A good workflow layout ensures that a complex system of services is well managed whereby customers are well integrated and served. The paper focuses on the working elements that ensure efficiency and effectiveness of Walmart’s performance.
Walmart stores are very busy regarding turnover rate. An average of six customers arrives per minute, and most of them come after the groceries. It should be noted that groceries have a very short shelf life and thus inventory management is a key issue in the workflow process of Walmart. The workflow in Walmart thus involves, purchasing, handling inventory, customer services, and accounting. For purchasing and inventory workflow operation, Walmart has revolutionized its operation to include cross-docking. Front-line managers report inventory levels to the purchasing office which focuses on replenishing it. Line employees take stocks regularly and report it to line managers who initiate replenishing process.
Handling of inventory through the use of cross-docking operations is one of the key aspects that has made the effectiveness and efficiency of the process of workflow in Wal-Mart better. Through cross-docking workflow process, Walmart loads and unloads goods for redistribution at one point and ensures minimal handling of those goods.
Figure 1: Cross docking workflow
Efficiency and Effectiveness of the Cross-Docking Workflow Layout
Cross-docking is a company’s distribution method where goods are loaded and unloaded for redistribution purpose in one site with minimized handling and storage. The advantage of this process is that the specific product moves efficiently and quickly (Aalst & Hee, 2004). There is a reduction of storage space and it makes rapid deliveries. As a result, losses are few because of less spoilage and reduced handling. Following cross-docking advantages, Wal-Mart’s volume of inventory has increased enabling it to negotiate excellent pricing margins with its vendors and pass the same to customers. More shelf space is also available given that there are fewer requirements for storage space. Increased shelf space increases profit margins through bulky sales.
Cross-docking has afforded efficient loading and distribution of products as well as the reduced storage and the computerized inventory systems resulting in shorter turnaround times in Walmart, therefore, granting it the ability to keep more products moving at a significantly reduced cost. No large warehouses are needed when applying the cross-docking method and this reduces labour costs because there is no packaging and storing. Also, goods reach customers within reduced time; thus, increased sales are obtained. Transportation involves full loads at each trip as products of a similar destination are ferried once, and this reduces the overall cost of distribution. The quality of products is easily screened, so customers get the best quality hence gaining confidence with Walmart products. Processes such as pick-location as well as order picking are eliminated with cross-docking. Everything moves faster with cross-docking terminal leading to a high turnover of products, usually spending less than 24 hours in the terminal.
Client Convenience Issues Related to Cross-Docking Layout
Cross docking sometimes inconveniences some suppliers who are unable to deliver goods to the cross-docking terminal, and this can cause a delay on the part of the consumers. The minimal handling of goods means there is less scrutiny of the products arriving from the supplier and this can affect the quality of goods displayed on the shelves for the customers.
Environmental, Safety, and Ergonomics Issues
Cross-docking, though ensures minimal handling of goods, is a very involving process and takes a toll on workers. Storage space is limited, and this means the stock taking operation is done almost on a daily basis for fast-moving goods. As a result, the workflow process demands constant monitoring and operation. The elimination of storage cost implies that upfront storage costs such as electricity are eliminated, and this ensures minimal damage to the environment. However, the cross-docking terminal is strained by the constant exchange between the supplier and the recipient, and this puts a strain on the environment.
Walmart’s workflow is rather busy doe to the company’s policy to provide high-quality goods at low prices. A good workflow layout is, therefore, necessary to achieve effectiveness of goods delivery. Walmart makes use of cross-docking workflow layout which involves minimazed handling and storage which brings many benefits such as efficient loading and distribution, reduction of labor costs, fast delivery among others.
Aalst, W. v., & Hee, K. M. (2004). Workflow management: Models, methods, and systems. Cambridge: MIT Press.
Crossdock Manitoba. (2012, December 8). Case Study: Why Wal-Mart Implemented Cross-Docking for Supply Chain Success. Retrieved February 4, 2017, from Crossdock Manitoba: http://www.crossdock.mb.ca/blog/case-study-why-wal-mart-implemented-cross-docking-for-supply-chain-success/