Wal-Mart Just Can’t Keep Products on the Shelves (In a Bad Way)
Wal-Mart has seemingly had a considerable amount of trouble keeping shelves in its stores adequately stocked since reducing the number of employees on staff at once in stores. This is odd for a retail location since when products are not on shelves, there is not a large chance of them being purchased. Especially disconcerting is that Wal-Mart has become the largest retailer in the world on the back of a supposed mastery of its supply chain.
Wal-Mart is now taking measures to ensure that the issue with product stocking is corrected. The latest effort employed to do so is an external auditing process which entails a detailed process of checking each and every Wal-Mart location to make sure that products (when in stock) are on the shelves for consumption.
Wal-Mart refers to whether or not stores are adequately stocked via a metric known as on-shelf availability or OSA. Due to the recent issues and the need to involve an external company to help stores ensure that they are stocked properly, shareholders are expected to vote at the next meeting as to whether or not Wal-Mart managers and executives should have their performance reviews and potential compensation tied to OSA.
When visiting a Wal-Mart location, check for neon green stickers next to the price tags on certain products; those are the ones that the auditors are going to be looking for. Originally, the idea was to have the auditors go into the Wal-Mart stores and check on certain pre-determined items (unknown the store employees) and assign a grade based on how stocked those products were. However, before the actual auditing process ended up taking place, it was determined that it would be beneficial to the employees at the stores to know the products that were being checked because those would most likely be highly driven items for the time of the year. This entailed a rather tedious process for store managers as they had to allocate employees to the task of sticking green stickers next to products that needed to be stocked instead of actually just stocking them.
While the idea is good in theory, the actual outcome has been less than stellar since a good portion of the stores now have incredibly well-stocked green dot items with very poorly stocked products immediately next to them. This should have been expected since the employees could focus purely on the products they would be evaluated on.
This situation is a very direct link to supply chain concept discussed in class. In this case, the retail stores a sort of bottleneck. After the products are produced and shipped to retail locations, they are not being put out fast enough to get to the customers. Managers need to focus on properly allocating their limited employee resources to getting the task completed.
Do you think that this process will work? How else could Wal-Mart improve its product stocking?