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Assessment phase
Wal-Mart Stores has grown over the years to become one of the world’s leading discount chain stores dealing with a diversity of goods including grocery and other forms of merchandise (Kneer, 2009). With over three hundred stores spread in the US and internationally the company faces the hardest challenge of operations which has made the company appreciate the importance of the logistics department in its management structure over the years. Logistics is particularly important because of the matrix organizational structure which the company seems to adopt in its geographical departmentalization approach to chain management (Raelin, 1986).
The specific value of logistics in Wal-Mart is its role in ensuring the flow of goods and other supplies in all the local and international stores. Like any other logistics system, this department is charged with the role of integrating information, movement of goods to stores, handling of materials, packaging of goods, and other related activities which ensure that goods are availed to the consumers on time and at the most convenient place for consumer satisfaction. The importance of this office is noticed from the organizational chart in which the logistics officer reports directly to the CEO and under him/her are all international stores. According to the DAF (2001), this puts the logistics unit under direct responsibility in the planning of the operations of the stores especially the international ones, and plays a key role as a management consultant unit from where most information about the actual performance of the stores. It is from this information that the company is able to make financial projections and make budgetary decisions.
Summary of duties and responsibilities of the logistics unit
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management of the inventory
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purchasing and procurement
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ensure transportation and distribution of goods
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warehousing of all goods not on the shelf
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consultation from the CEO and other officers for planning purposes
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organization and planning duties for the company operations
Improvement phase
From the organizational structure of Wal-Mart Stores, it appears that the bulk of company responsibility is heavily leaning on the CEO and the logistics unit. As a multinational supply chain, this is inevitable and so the Store requires highly professional logisticians able to effectively ensure that the traded items and other logistical supplies are at the right place at the right time to attract the right price for the right condition of the item in the store.
From the structure, the most focus of the business logistics is on outbound logistics where the goods are obtained from a common source in the US and distributed to the international stores which are the consumption points for the goods. With an attempt with the matrix management structure in which departments are regionally located (Europe, North America, Asia, America south among others), the logistics need liaison people on the ground in form of regional managers and sales reps in the regions which are destinations for specific goods to be linked to the central office. This is mainly because of the history of failure of remote management where matrix structures have been used.
By adopting a matrix structure for its logistical management, the company should provide for a system of information sharing across task limits and professional development through job specialization. However while doing so the company must beware of confusion in employee loyalty (Raelin, 1986). However, good corporate management can overcome the setback instead of persisting in the concentration of powers as it is currently.
References
Department of the Air Force. (2001). Expeditionary Logistics. Air Force Journal of logistics: 25(1). DIANE Publishing.
Kneer, C. (2009). The Wal-Mart Success Story. Norderstedt: GRIN Verlag.
Raelin, J. A. (1986). The clash of cultures: managers and professionals. Boston: Harvard Business Press.
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