Exercise One – BCOR 2500
Business Objectives: Wal-Mart recognized that there was potential to reduce expenses and increase revenues if the company could develop a means to increase the efficiency of its supply chain and reduce employee costs related to employee theft and overall productivity. The company estimated that by increasing supply chain efficiency and minimizing stock-outs, the company could increase revenues by approximately $600 million annually. Moreover, Wal-Mart estimated that increasing overall employee efficiency could save up to $6.7 billion annually. Finally, the company recognized that approximately $575 million in expenses could be saved if they could eliminate the issue of employee theft. Wal-Mart was willing to make a long-term investment in a solution that could achieve these figures, as it is one of the few retailers in its industry that can afford to make substantial investments into the future and the potential benefits would far out way the costs in the long run. Wal-Mart estimated that in order to accomplish these objectives it would take a substantial investment over the next 5 to 10 years, as new technologies would have to be developed and pushed down to suppliers. Business Tactics: Wal-Mart believed that revenues could be significantly increased if the company could easily track the movement of goods and stock levels across all distribution centers. With this information Wal-Mart could hire workers to design algorithms to accurately forecast the quantities of each item to be delivered, based on inventories in the store, thereby minimizing stock-outs and increasing sales. Knowing where their products were at all times make it much harder for employees to steal. The company also recognized that labor costs could be significantly reduced by providing employees with easy access to information concerning inventory in stores, deliveries and backup merchandise in stock. This would increase the efficiency of individual employees by...
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