Logistic and Operational Management


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Introduction to Logistic And Operational Management

The main aim of logistics and operations management is to produce appropriate goods and services in the right quantity and quality. It also aims to distribute all these goods to the right place, at right time by making proper and greatest contribution to the people. In this competitive business environment, logistics and the operations management is directly related to the design, implementation and management of systems so that efficient deployment of all the personnel, physical facilities, raw materials, in-process inventories, finished goods and other related services.

Wal-Mart is the biggest American multinational retailer in the world with its headquarters in Bentoville, Arkansas. Company has over 11, 453 stores in 27 countries and produces almost 71 products under its own banner (Corporate walmart, 2015). It employees almost 2.2 million employees and last year profit of the company was $485.651 billion. Company has different types of products that ranges from retail products to the financial products, etc.

In order to understand the importance of logistics and operations management, this report has been made and it also covers its different prospects by taking the company Wal-Mart. Further the analysis of company's logistics components and its effect on the performance of company has also been discussed.

Assessment 1: Component activities of logistic and operational management in Wal-Mart

There are different components activities of the logistics and operations management that are used in Wal-Mart and some of them are-

Warehouse Management- Wal-Mart is the biggest retailer in the world and therefor it is very important for them to manage its inventor in appropriate manner (Greasley, 2007). This particular part of the operations helps the company in maintaining the balance between cost of all the available products against the risk of not having the products at the time when customer demands that goods. It is one of the biggest issues that companies have to face as many companies are not able to manage their inventories in proper manner and when those inventories are required, demands of the customers are not fulfilled due to non-availability of these goods. It is very important for companies like Wal-Mart to manage its entire logistics systems so that appropriate level of inventory can be managed and it also does not affect the services to customers (Kloppenborg, 2011). Walmart is one of the best companies in terms of managing the inventory of all the finished goods, raw material and because of that it has been able to fulfill all the needs and demands of customers in suitable manner. It has also helped the company in terms of reduction of low sales, shortage of goods, etc.

Manufacturing- One of the most important part in the retail company is related to the manufacturing because it is directly related to the brand image of company. Wal-Mart not only sell the products of other companies but also sells the products under its own brand name. It is important for company to maintain its manufacturing in proper manner so that all the needs of customers can be fulfilled in terms of quality, price, etc. (Knudsen, 2013). In order to manufacture in proper manner, raw materials are outsourced from the appropriate places so that company can get the good quality material in best prices. It is also important to maintain the level of raw material while manufacturing so that goods in proper quantity can be developed. Company has installed all the latest machineries which help them to do the production in minimum resources while maintaining the quality and minimizing the wastage.

Human Resource- It is one of the most important component in the company as it helps them to appoint the people that can help the company in its growth. Human resources help the company to manage all the employee in terms of motivation them, fulfilling their all needs and demands, setting the rules and standards in company and guiding them to work in appropriate manner (Nagarajan, 2004). Without the proper human resource department, Wal-Mart can never carry out its operations. HR also helps the Wal-Mart in deciding some strategies that can be used in order to fulfill all demands of customers in appropriate manner.

Financing- One of the most important activity that is required in each and every organization is called as finance and without it no company can work in appropriate manner. It might be possible that company has good people, machines, manufacturing department, etc but if they will not have finance then nothing can be done (Persson, 2010). In Wal-Mart, it is one of the most important activities as most of the money that company arranges is through the internal sources and by the retained earnings. Further, sometimes company also takes loans and grants from the government so that some important function in the company can be done in appropriate manner. In order to manage the finance, company has also adopted many techniques like zero base budgeting, balance scorecard, etc. Company also try to pay of all the salaries and money to the employees and suppliers in proper time (University of San Francisco Online, 2015).

Retail- It is the most important function in the company and it helps them to provide the right goods to the customers, at right place and in right time. In this competitive environment, it has become very important for companies to inform about the products that company sells in appropriate manner (Safsten, 2009). Wal-Mart try to manage its retail function in most appropriate manner by managing different functions like buying and assembling, selling, packaging, supply of the market information, etc. All these retail functions have helped the company to gain a respectable position in the market.

Assessment 2: Performance objectives of each components activities in Wal-Mart

It is very important for Wal-Mart to maintain its performance in each and every component and for that it can use the 5 performance objectives which are called as cost, quality, speed, dependability and flexibility. All these objectives will help the company to manage it functions in suitable manner.

Warehouse Management- It is crucial for company to manage the performance of its warehouse so that goods can be made available to people in most appropriate manner. In terms of cost it can be said that company can use the ABC analysis in order to segregate all the products. It has also helped them to maintain a level of inventory in warehouse. CRM technique is also used by company which has helped them to track each and every product in warehouse and it has saved lots of cos for them (Toni, 2012). In terms of speed, company has arranged the items as per their usage which help them to provide items from the warehouse to stores in much quicker time. For dependability, company try to order the inventory before it gets finishes. In terms of flexibility, company order the different types of inventory so that changing needs of people can be met. Quality in warehouse means that everything is arranged in proper manner so that quality of storing can be maintained.

Manufacturing- In terms of cost it can be said that company can use good machineries in order to produce goods at low cost (Boer, 2003). It will also help them to minimize the wastage in suitable manner. For maintaining the quality in manufacturing, company try to maintain good relations with the suppliers and also with customers so that good material can be procured. For dependability, department makes sure that it is in regular touch with the research people so that things can be developed as per need and demands of people. Speed can be maintained in company by minimizing the lag and lead time in appropriate manner. Further, flexibility in the manufacturing means to mix and match the value of output so that all the needs and demands of customers can be maintained (Cervone, 2006).

Human Resource- In terms of cost, it is important for company to use the techniques that can appoint good people. Further, retaining the employees will also help to reduce cost. Speed can be maintained by giving proper training to employees as it will help them to work hard. In terms of flexibility, rules in company should be change from time to time so that it can match with changing needs of employees (Evans, 2011). Dependability can be maintained if the department will be in regular touch with employees as well as other departments. Quality in HR will be maintained if good techniques will be used in terms of doing different HR functions like recruiting, motivation, etc.

Finance- Company can arrange the finance from its internal sources easily by maintaining the retained earnings. Speed in finance will be maintained if all the suppliers are given money on time with the salaries to employees, etc. For flexibility, it is important to make budgets as per changing market situation so that in case of emergencies extra budgets that have been assigned ca be used (Matsui, 2011). For dependability, company can ask department regarding their needs and wants so that proper budgets can be assigned for them In last quality can be maintained by using techniques like Zero base budgeting, balance scorecard, etc.

Retail- In terms of quality, all the showrooms and warehouses of the company should be maintained and also the quality of goods should be as per the standard. Speed can be maintained in terms of reducing the time of queuing in order to reduce transaction time and also new products can be launched as per changing needs of people in terms of flexibility. Dependability will be maintained by making good relations with people in order to improve the retail function and address their issues (Pitinanondha, 2009). Cost can be reduced by proper planning f all the functions and using proper strategies in order to get the attention of people.

Assessment 3: Critical evaluation of the performance objectives of each components activities in Wal-Mart

Retail- From the above assessment it can be said that quality of the different goods that are manufactured and sold in company are good but still company has not been able to manage the complaints of customers appropriately (Söderlund, 2012).

Manufacturing- In terms of manufacturing, company has not been able to minimize the wastage of goods in appropriate manner and it has increased the manufacturing cost in company. There is lack of the use of new technologies (Corporate walmart, 2015).

Warehousing- Most of the warehousing function in company is good but there is still problem in terms of loading and managing the inventory to maintain level of stock. Company use very small trucks and loading vehicles to load the commodities which take more cost and time (Wikner, 2001).

Human Resource- Company has not been able to motivate its employees in appropriate manner and because of that turnover rate in company is increasing day by day.

Finance- Company has failed to assign proper budgets for emergency situations like recessions, natural hazards and has suffered many loses due to that.

Assessment 4: Recommendations in order to improve the performance of Wal-Mart

There are various ways in which company can improve its performance in terms of its components, etc.

  • It is important for company to use the techniques like Just in Time as it will help the company to reduce the wastage and will increase the efficiency in business. Further, it will also check that there is no under and over utilization of resources (Aesthetica Technica, 2010).
  • Different motivation techniques like Herzbergs two factor theory and ERG theory can be applied as it will help company to motivate employees in most appropriate manner.
  • In order to manage finances, company can use different capital budgeting techniques and also the zero base budgeting. It will help them to allocate budget in appropriate manner.
  • Company can also go for the SAP technology as it will help them to maintain the coordination between different departments.
  • In order to handle the materials well in the warehouse, material handling tools will allow company to move from one point to another (Functions of different departments, 2014).
  • Workshop planning and layout method will also help them to arrange machines in proper manner and it will also allow company to save time and produce more units.


By summing up the report, it can be said that logistics and operations management is one of the most important part in the company and it helps to manage every aspect of business in suitable manner. Wal-Mart is one of the best companies in the world and the techniques which it uses to manage its operations is appropriate but still there are some fields that can be improved by using techniques like layout design, ERG theory, etc. it is important for company to manage in components like HR, Finance, etc in most appropriate manner by maintaining their performances.


  • Boer, 2003. Guest editorial: New challenges in operations management. International Journal of Operations & Production Management
  • Cervone, F. H., 2006. Project risk management. OCLC Systems & Services. 22(4). pp.256 – 262.
  • Evans, 2011. A project manager's optimism and stress management and IT project success. International Journal of Managing Projects in Business.
  • Matsui, 2011. Relationship between quality management information and operational performance: International perspective. Management Research Review.
  • Pitinanondha, T., 2009. A Framework for Systematic Management of Operational Risks. Asian Journal on Quality.
  • Söderlund, J., 2012. Project management, interdependencies, and time: Insights from Managing Large Systems by Sayles and Chandler. International Journal of Managing Projects in Business.
  • Wikner, J., 2001. Long-term capacity management: Linking the perspectives from manufacturing strategy and sales and operations planning. International Journal of Production Economics.
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