How should the operations management strategy be aligned with the strategic management strategy?

At the Walmart store in Erie, Pa., 26-year-old meat and dairy stocker Anthony Falletta faces a similar predicament. “The merchandise is in the store; it just cant make the jump from the shelf in the back to the one in the front. Theres not the people to do it.”

Walmart is entangled in what Ton calls the “vicious cycle” of understaffing. Too few workers leads to operational problems. Those problems lead to poor store sales, which lead to lower labor budgets. The decision to hire more workers “requires a wake-up call at a higher level,” Ton says.

Rochelle Jackson, who works at the jewelry counter at a Walmart store in Springfield, Mo., says a supervisor recently told her the number of hours available to schedule employees is linked to sales performance: The worse the sales number, the fewer hours available. “I asked, ‘Why cant we have enough hours to make the store work??” recalls Jackson, who has worked at two Walmart stores since 2009. “They said, ‘Its orders from home office.?”

Staff shortages at cash registers during peak hours require Jackson and her co-workers on the sales floor to help check shoppers out “while we are trying to restock the shelves, help customers, and do other assigned projects,” she says. That leaves a service vacuum across the stores departments. “Customers come back to shoes for help to find something in grocery because they cant find someone in grocery,” Jackson says.

Tim White, an attorney, recalled trying to buy wall paint at the Walmart near his home in Santee, Calif.: “You wait 20, 25 minutes for someone to help you, then the person was not trained on mixing paint. It was like, you have to help them help you.” White says that while long checkout lines irritated him, “the No.?1 reason we gave up on Walmart was its prolonged, horrible, maddening inability to keep items in stock.” The White familys visits to Walmart—which had been a several times a week occurrence several years ago—became less and less frequent until they stopped in the past year. The eight-member clan now shops at Target and Costco Wholesale (COST). “Things might be a little bit more expensive,” he says, “but not so much so that it would keep me away.”

The bottom line: Some employees say staff reductions have hurt Walmarts ability to keep shelves stocked at its more than 4,600 U.S. stores.

 

Discussion Questions

1. Discuss the “vicious cycle” of understaffing that has led to operational problems at Walmart in the retail industry.

2. From an operations management perspective, retailers consider labor (usually their largest controllable expense) as an easy target for cost-cutting. Discuss the effectiveness (or lack thereof) of this operations strategy.

3. Walmarts U.S. Chief Executive Officer Bill Simon stated that Walmart was “getting worse” at stocking shelves, and its “self-inflicted wounds” were Walmarts “biggest risk.” What would you suggest and why if you were appointed to fix the restocking problem?

4. Some employees say staff reductions have hurt Walmarts ability to keep shelves stocked at its more than 4,600 U.S. stores. How should the operations management strategy be aligned with the strategic management strategy?

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