Report on Inventory Management

Types of the inventories by Wal-Mart and Dollar general store

Two different service companies that are managing the inventory are Wal-Mart and Dollar General. There are many beginners or starters you may say that are not well aware of the word Inventory, so let’s start with this word and then move further. Inventory is a kind of quality that is needed to be used for the future sale. It is basically a resource that is accomplished by any kind of the business organization. Very first inventory that was recorded is in, 1601. This whole process of inventory management includes the planning how to do it, different coordination meetings, safe storage, proper handling and then its further movement. In this process, sale of raw materials is being done as much as possible that are required or needed by the customers to meet their demands. Main purpose behind this inventory method is just to make the performance better of different manufacturing industries. Through the process of inventory, it can turn into the liquid cash. This inventory process or method whatever you may call it has helped many of the companies a lot in saving the money and this is another reason why this topic is being researched deeply now.

Dollar general as well as Wal-Mart both of them use four different types of the inventories.

·         They first of all use raw material in this process.

·         Second step is the maintenance of the raw material that was selected.

·         Third step is their repairing.

·         Last but not the least one is the process of supplying the goods.

Both of these companies have the characteristics of a stock keeping unit that is also called as a (SKU). This SKU is about the different kind of items that are stored in the different locations. As every item varies from the other, same is the case with SKU, they also varies from item to item. Let’s take an example here of SKU difference, there is a brand of pens that is same but difference lies here that the package that has straight one count as compared to the same brand in which it has a count of two will definitely have a different SKU.

Analyzing how their goods and service designs are being integrated

Integration doesn’t means that they are not providing goods or items that are not of good quality, but both these companies Dollar general and Wal-Mart are providing goods as well as different service programs that are suitable enough for the customers or consumers. Example of their service designs that they are offering would definitely be the digital coupons that are offered by the Dollar general and Wal-Mart is offering the saving catchers. This savings catcher word helps the customer to click a picture of their receipt and the application would further help the customers to get some discounts from some other store or even earn points which can help them in future.

While in the stores looking for the things, customers often get tired or panic when they don’t understand anything properly. Perk of these two stores is that they have the customer service desk available all the time to help out the customers and solve their queries too. Along with this, customer service desk also helps the customers to return or exchange the stuff with which they are not satisfied instead of standing in the other que and waiting for their turn. This has helped a lot as life has become much busy and people don’t have enough time to wait and wait just for the return or exchange purpose. It has helped a lot.

Another difference with other companies lies in the online shopping. This Wal-Mart store has offered people to shop online whatever they want without even thinking about the maximum or minimum limit. People get frustrated and tired at times to visit the store and pick up the grocery things so this online shopping has facilitate them enough by all means. Dollar general also offers the online shopping system as they can deliver the products anywhere and they have been trusted for many years because of their service and quality of the products they deliver.

Wal-Mart here, just in the previous two years this big company has reported that it has almost cut down the costs to its consumers of different variety in fruits and vegetables by the amount of almost 2.3 billion dollars. The amount of sugar has also been reduced in the products by almost 10%. Wal-Mart is these days one of the leading stories in the USA and it has almost opened 86 new stores in different underserved communities and they have already launched a labeling program that helps different customers to spot out the healthy food items for them on the shelf or rack. And if we see today, this biggest company is not only seeing the increases sale of fresh products but also building a strong relationship with the customers.

Role played by inventory in the performance of company, operational efficiency and the satisfaction by the customers

In any business field no matter whether its Dollar general or Walmart but in all the business areas, inventory plays one of the biggest and major role as it helps in the generation of revenues and profits for the company. Same is the case here with both these companies, inventory helps in generating a huge amount of profit. Both these companies generate the revenue every time they sell any of the product and further collects the payment whether it is in the shop of sale has been done online. This whole process allow these companies to keep their inventory stocked or compiled for a very low amount and further sell the item at a much higher cost as compared to what they actually paid for it. This is the way through which they make profit on every sale whenever there any product is being sold. Along with this, companies should also make a record by calculating the ratio of inventory turnover to know this that how well any product is being needed or wanted by any of the customer. To make this happen what they have to do is they for sure take the cost of the sold goods and then further divide it with average inventory level depending upon a certain time duration. If the result shows higher turnover it means it will be better for the company. While low turnover will help them in the analyzing of a product in a better way.

For both the companies, customer satisfaction plays a major role. They want to satisfy customers as much as they can. If customers are satisfied then obviously the reputation of the company also increases. Having a poor inventory system means having a poor reputation of a company and ultimately poor service to the customers. This all happens when inventory system is not being checked on time and properly.

Four different kind of layouts

Both these companies have four different type of layouts and they are:

·         Product layout is the very first type, it is in short an arrangement which is completely based upon the sequence of different kind of operations.

·         Second one is the process layout and it has a functional grouping of different activities and the equipment’s that are responsible in doing the similar kind of work. This layout provides the huge amount of flexibility as compared to the others.

·         Cellular layout design is not rendering towards the functional features of the equipment but they are from the groups of equipment called as self-contained which are most importantly needed for the providing of better services.

·         Fixed position layout is the one which helps in the consolidation of important resources for the manufacturing or developing the products and delivering them on time.

Two metrics for evaluation for Inventory Management System

Evaluation of both these companies can be done through the customer satisfaction and the supply chain method.

Customer satisfaction is very important. Evaluation can also be done by knowing the remarks of their customers and common people. For both the companies, customer satisfaction plays a major role. They want to satisfy customers as much as they can. If customers are satisfied then obviously the reputation of the company also increases. Having a poor inventory system means having a poor reputation of a company and ultimately poor service to the customers. This all happens when inventory system is not being checked on time and properly.

Another main part is supply process, to keep this all work properly and smoothly supply chain managers are using different kind of metrics for analyzing the performance of a company that how well is it working or not. Through this it can be easily known about the reputation and the performance which is being given by a company. For both these companies, these two methods are the best and easy ones for evaluation.

Some of the ways to improve the inventory management

There is not just one way to improve the inventory method but there are many. At times being able to break up the operating inventory down into further three categories like security, replacement and abundant amount of the stock can help in getting to know about the assets in a better way. Making right decisions helps in the contribution and knowing about the safety things that are required. These companies need to put up all of their overstock on the top of the shelf so such products can be used or bought by the customers early. Otherwise such products won’t be of any use as they will be expired pretty soon. All such stock if remains at the shop and customers don’t buy it, both of the companies should send it back and let the store know what they want and what they don’t want in the future. Companies can see improvement in the inventory by knowing about the up to date records related to the accounting, right way to count the physical stock available in the store like Wal-Mart and Dollar general and last thing is to know that what quality they are using is of best kind and will definitely be good for the customers as well and they will like it too. At the end, I would like to conclude by saying that time comes when such companies start facing decline but to make sure they avoid such decline pretty soon they should upgrade their products according to the wish list and demand of customers.

References for Inventory Management System

·         Jacobs, F.R., Berry, W.L., Whybark, D.C., Vollmann, T.E. and Vollmann, T., 2011. Manufacturing planning and control for supply chain management. New York: McGraw-Hill.

·         Bustillo, M., 2010. Wal-Mart radio tags to track clothing. Wall Street Journal, 23, p.A1.

·         Hemphill, T.A., 2005. Rejuvenating Wal-Mart's reputation. Business Horizons, 48(1), pp.11-21

·         Brandt, D., 2007. Bargain optimization: Dollar General benefits from supply chain, distribution network. Industrial Engineer, 39(10), pp.34-38.