Posted: May 25th, 2022
Contemporary management techniques: Walmart case
Walmart is one of the top retail corporations in the world. Since its inception, the company has largely operated under a brick-and-motor model. Still, in the recent past, it has adopted an online retail model largely because of the increased penetration of the internet, connectivity, and the ability to reach each potential buyer at an individual level (Our Business, 2021). Despite the success that the corporation has had to date, several critical success factors (CSF) have been selected for Walmart.
For this paper, Business Process Improvement (BPI) is selected as the contemporary management technique that is not presently being implemented that could help the organization in achieving its CSFs. This paper, therefore, is a discussion of the BPI contemporary management technique starting with a rationale for the selection of the technique than an in-depth analysis of the technique, which describes the technique, its implementation process, its application from other organizations, its applicability to Walmart, and lastly, plan for implementation.
The rationale for the selection of the BPI technique
BPI is selected as one of the contemporary management techniques that Walmart has not yet implemented. This technique is selected based on its potential to aid Walmart in the realization of its CSFs. In addition, the adoption of BPI bears the potential to improve the quality of Walmarts products that are on offer for purchase by their customers. Therefore, it is obvious that BPI that Walmart can use to improve its customers experiences, internal business processes, and increment of revenue, as well as potentially improve their staff satisfaction with the corporation as a place to work improve employee retention.
Walmart will improve its competitiveness in the retail sector if it improves its existing processes. BPI is a technique that allows managers to identify business processes and procedures that are falling short (Blocher & Hicks, 2019). BPI is used by businesses to audit and eradicate wastage and reduce the time it takes to provide products and services. BPI can also be used to identify whether the corporation is complying with established quality control and operational standards.
BPI technique is useful as it would enable the corporation to meet its business goals and demands by customers effectively. To meet its CSFs, the corporation will need to enhance the efficiency of business processes. The primary goal of BPI is to transform the performance of the corporation (McIvor, 2016). Through BPI, Walmart will be able to improve its sales and profitability levels.
BPI is also a management technique that is important for the elimination of inefficiencies in the business processes. With a focus on staff, BPI has the potential to improve employee productivity. A business can streamline its processes through BPI application, thus cut down on unnecessary costs (Nickerson, 2014). For example, the adoption of new technology can help streamline processes.
In the case of Walmart Inc., its industry has become increasingly competitive, especially in the context of COVID-19 related lockdowns that necessitate online shopping. Therefore, it only makes that sense that Walmart should seek to reduce significantly the time the delivery time of an order. As a result of the increased online traffic, companies have been forced to review their processes and embrace new innovative production technologies.
This requires updating the existing processes to catch up with the ever-changing technology and meet financial targets. In addition, the need to remain competitive in the market necessitates the adoption of new, more efficient processes, procedures, and technological systems. The decision to or not adopt new systems and processes bears the potential to affect an organizations future stability and profitability.
Various factors drive the need to change old systems and processes. The first and probably the most powerful is customer service concerns. Customers will normally raise concerns in case the quality of products and services is low. If the company fails to address these concerns, these customers will opt for alternative substitutes, leading to reduced sales and profitability for the company.
Adoption of new business processes and systems bears the potential to addressing concerns raised by customers. The second factor is the costs of production. An increase in production costs to unsustainable levels is sure to drive a firm to adopt new systems and processes that will help in the reduction of production costs. The third factor is employee productivity. In case there is a reduction in employee productivity or employees do not meet the required targets. The company would be required to embrace innovative human resource techniques and strategies (Nickerson, 2014).
The fourth factor is competitive challenges. A firm can only be competitive if it adopts lean, efficient, and effective production systems and processes. The presence of competition in the market will require a firm to differentiate its products, which would mean first understanding the products offered by the competitors (Yousfi, Batoulis & Weske, 2019). Attributes that directly influence the competitiveness of the companys products are cost, productivity, customer satisfaction, and customer needs. Lastly, firms will be driven to adopt new technology if there is new and advanced technology available. Adopting new and advanced tech is sure to improve sales and profitability, e.g., through automation of particular business processes that improve operational efficiency.
Description of business process improvement
BPI is essentially a technique used by managers to re-design operations and procedures within an organization. Firms use BPI for the realization of high quality in target function areas. Moreover, as Griesberger, Leist and Zellner (2011) argued, firms use BPI to bring about flexibility in production processes.
The adoption of BPI generates positive results in the critical areas of customer focus and operational efficiency. In some organizations, implementation of BPI results in cost reduction and improvement in organizational performance. Once BPI is adopted, a firm can evaluate performance indicators or CSFs to determine BPI implementation. Some CSFs that can be used to measure the change include customer satisfaction, product quality, time, and costs.
Implementation of BPI essentially starts with an audit of the existing operational processes and procedures. Through the implementation of the full process of BPI, an organization can achieve three goals. The first goal is to reduce the time required for processes. The implementation of BPI is done to analyze the effectiveness of how a firm conducts its business processes. Thus, as early stated, an organization can improve its process efficiency (Griesberger et al., 2011 Yousfi et al., 2019).
Moreover, it allows for the elimination of unnecessary and ineffective processes. The second goal is for the improvement of output quality. The adoption and implementation of BPI should promote better products and services with the same resources. The analysis done before adopting BPI allows for identifying any errors and defects in the production process, errors and defects that can have a negative effect and lower the quality of products and services.
Therefore, once BPI is implemented, it allows for eliminating these errors and defects, then it is possible to improve on the output quality of products and services (Griesberger et al., 2011). The third goal for the implementation of BPI is to reduce waste and wastage. Through the implementation of BPI, an organization can establish wasteful business processes. Once these processes are identified, then they are eliminated from the workflow planning. As a result, the organizations overall productivity improves with the implementation of BPI. Furthermore, BPI bears the potential to enable empoyees to focus on tasks that add value to the organization.
Implementation of BPI
Implementing BPI begins with setting clear organizational goals that are to be achieved through the particular change being sought. Thus, the implementation process begins with defining and analyzing the organizations existing processes, procedures, strategies, and structures. The analysis and auditing process can be carried out through the mapping of the business processes.
The organizations workflow software is a good technique that can be used to track and evaluate business processes. By mapping workflow, an organization will be able to understand how existing processes work. In addition, it will be able to identify and further analyze those weak and inefficient processes (Nickerson, 2014). Therefore, through the mapping of business processes, managers and other relevant stakeholders can determine the need for change in the organization.
The second step in implementing BPI is analysis. After mapping the business processes, it is then essential to analyze the established deficiencies. For example, if the BPI audit establishes that a certain process is taking longer than expected, then the second process would determine why the said process is taking longer.
The BPI implementation team will need to determine the factors that might be causing any delays in delivering services and products. In addition, such analysis can also seek to determine the said process affect the quality of products and services. In addition, the team will need to determine the possible solutions available that can be put in place to make the said process more efficient, effective, and within the expected time.
During the analysis phase, organizational managers evaluate the cost-intensiveness of processes (Palkina, 2018). This analysis would allow for the determination of those processes resulting in financial strain for the organization. Essentially, the analysis phase seeks to asker the question why? Once this question is answered through analysis determining the root cause of the identified problems, it is possible to design solutions.
Various business process improvement tools are at the disposal of managers and BPI implementation teams to assess the key causes of a specific problem. For example, Five Whys is one of the business process improvement tools available for organizations and can help unearth the underlying causes of a problem (Jardim, 2013).
The third step in the implementation of BPI is where the team re-designs or replaces the problematic processes. After identifying the ineffective processes within the organization, the cause of the problem, and identifying possible solutions, this phase involves setting up the new design goals. The BPI implementation team should first and foremost ensure that the solution that is selected can meet the organizational goals.
Before the new process is put into action, the team should determine the appropriateness of the solution given the organizations context; for instance, how does the selected solution fit with the organizations budget and expected benefits? To ensure the re-design process serves the organizations best interests, certain best practices should be followed. The first best practice is to select the right comparison metric.
Using these metrics, the BPI implementation team should compare the existing ones with the selected new ones (Nickerson, 2014). In addition, the comparison can be made based on existing and potential efficiency; in this regard, the selected new process should be more efficient than the old process. Obviously, in re-designing a process, the target new process should be more efficient than the old process.
The second best practice is re-designing organizational processes to account for errors and place a long-term vision. In some situations, the solution that has been selected can be effective in the short term but turn to be ineffective and very costly in the long term. It is therefore important that the BPI implementation team defines the scope of the proposed changes. Definition of the scope will allow the organizations managers to determine the effect of the proposed solution. The third best practice is risk analysis. The implementation team should undertake risk analysis, especially in re-designing procedures and processes.
The next step after the re-designing phase is the implementation of the solution. This step is vital as it determines the success of the entire BPI implementation process. Three district steps are proposed for the implementation process to promote success. The first is the mitigation of the risks, which is achievable by implementing the planned phases. In addition, before the changes are implemented at an organizational level, it is advisable first to undertake a test of the planned changes at a small scale for benchmarking purposes with the existing processesthe second acquisition of all the required resources for the implementation of the solution.
The organization must have the right resources in its possession before the implementation drive is initiated. For example, if the selected solution is computer-based, the organization should have all the required hardware and software, including expert knowledge for its implementation. This is vital as it allows for a seamless implementation of the changes. The third is providing appropriate information to all the relevant stakeholders, e.g., shareholders. This is vital as it helps the organization get the shareholder support vital for the success of any change initiative (Kundu & Manohar, 2012).
The change can only be successful only when shareholders are involved and kept in the change loop. When shareholders are bought in, then the funds, support, and resources needed are easily acquired to successfully implement the changes (Nickerson, 2014). The fourth is to ensure that employees are trained on the new processes. Training employees ensures that the technical know-how for processing the changes and their effects is available in-house. The last step is the reflection and benchmarking. This phase is essential as it ensures that the planned changes are carried out sequentially. The implementation team can also monitor the effectiveness of the implemented processes to determine whether they are meeting the target goals.
Some methodologies can be used for the implementation of BPI. One of these methodologies is Six Sigma. This methodology enables the organization to determine any inconsistencies, defects, and errors in the production processes. In addition, Six Sigma can be used to determine the efficiency level that a business process generates. Through the DMAIC principle, the Six Sigma methodology allows for the first step of defining the opportunities for improvement (Gygi & Williams, 2012).
The second step is the identification of metrics that the organization can use for benchmarking the new processes. The third step is analysis or unearthing inconsistencies, errors, and defects in the organizations production processes (Nickerson, 2014). The fourth step is the improvement of the organizations processes. The adopted solution should be able to resolve the problem identified in the production process. The final step is monitoring, evaluation, and control of the new processes.
The other methodology used for the optimization of organizational processes is the lean production method (Mrugalska & Wyrwicka, 2017). This method can be used for the improvement of employee productivity, among other crucial areas.
BPI application in other organizations
Several organizations have used BPI for the improvement of efficiency, productivity, and competitive advantage. Nike is an example of an organization that implemented BPI to improve the efficiency of its business processes. In particular, Nike implemented the lean manufacturing methodology for the improvement of production processes. This methodology was adopted to respond to complaints that Nike was engaging in exploitative HR pactices (Lean manufacturing and innovation, 2018).
However, the implementation has since been regarded as a business improvement opportunity to eliminate wastage in the production process (Lean manufacturing and innovation, 2018). Another objective for the implementation of BPI by Nike was to produce quality products that meet customer needs. Nike employees are trained on how to improve efficiency in various operations.
Currently, the success of Nike can be attributed to the design the future initiative. This initiative has enabled the company to adopt new innovative technologies that improve the companys competitiveness in the apparel and sportswear industry. The company has also been able to eliminate reported defects and increase lead time through the adoption of BPI. Lean manufacturing methodology has enabled Nike to improve the quality of products and cut down on production costs.
Another company that has adopted BPI is Motorola. The company used the Six Sigma BPI methodology to solve high defect rates among its products. In addition, the company used the methodology to better the quality of products and the manufacturing process. BPI was recognized as a vital performance indicator for Motorola and was used for improving the production process (Gygi & Williams, 2012).
In addition, Motorola has used innovative techniques to better its products as well as the supply chain. The Six Sigma model was adopted to respond to intense competition and decline in its sales and profitability. The adoption of Six Sigma enabled the company to remain competitive by streamlining and optimizing its production process and improving products quality. As a result of the adoption of the Six Sigma model, Motorola became a systems-driven organization. It also cut down on employee numbers by streamlining its functions.
Applicability of BPI on Walmart
As a management model, BPI can be applied to Walmart to improve its competitiveness in the retail industry. Competition in this segment increases from brands like Amazon, Costco, Walgreens, Kroger, Target, and Home Depot. To remain competitive, Walmart should increase its global reach, for example, venture into the African, Asian, and Latin America Markets. In addition, the company can introduce highly flexible quantities, thus flexible pricing to accommodate a wider array of buyers.
This way, BPI will enable to company to increase sales and profitability. In addition, BPI is a tool that Walmart can use as a tool for aligning with the ever-changing consumer trends. For example, it has been observed that consumers like shopping in supermarkets in local businesses (); thus, through BPI, Walmart can introduce Brick-and-mortar stores in neighborhoods.
Walmart can also use BPI to improve the quality of its services further. By adopting new innovative technologies, for example, virtual reality, it would be possible for customers to interact with product Walmart online store, thus improving consumer satisfaction.
Moreover, streamlining their brick-and-mortar stores and increasing payment points would reduce waiting time to checkout, improving customer satisfaction. In addition, automation of some processes in their brick-and-mortar store is sure to cut down on customer wait time. In their online store, eliminating unnecessary contact points in the supply chain and streamlining their delivery system is sure to improve customer satisfaction and profitability.
Walmart can also apply BPI to sharpen and boost its marketing strategies. The current image and perception that many present and potential customers have about Walmart is just another retail store. Still, not many especially those outside the US market see the company as an opportunity to save when shopping. The company must undertake a campaign to improve its perception and create a more visible online presence. Through BPI methodologies, Walmart can create targeted marketing messages that build on the companys brand image that is considered driven and seeks to help customers save money.
Effective implementation of BPI for Walmart dictates that the process adheres to specific steps. The first step is to carry out a mapping process that audits operational processes. This step allows for understanding how the various business procedures work, and in the process, identify those procedures that are weak and inefficient (Palkina, 2018).
For example, one of the procedures that would be identified as weak is the employee retention processes, which results in high employee turnover. Another weakness identified for Walmart is the few checkout points for their brick-and-mortar stores, which results in the high customer waiting times. This step would be useful as it would allow Walmart to realize the costs for high employee turnover and keep customers in waiting lines for a long.
Once the existing processes are audited and mapped, the next step is for Walmart to analyze for determination of the root cause of the identified weaknesses. For example, the cause for long waiting times is the few checkout points in the brick-and-motor stores. Additionally, the cause for high employee turnover is employee dissatisfaction and lack of effective motivation strategies. Due to high employee turnover, the company has to incur additional expenses in training costs, hiring expenses and related costs, etc., which ultimately eats on profit margins.
The third step is to design or re-design the existing processes. These phases would require Walmart to carry out analysis to determine how it can change the inefficient old processes in the organizations. In addition, Walmart should adopt appropriate measurement metrics to evaluate the new processes and compare them with the old processes. For example, the company would analyze how the adoption of new employee motivation strategies improves employee retention, with employee turnover being the metric. The goal is to reduce it.
The last step in this plan would be to implement the BPI initiative. Being the final step would require the acquisition of the various resources that enable seamless implementation of the change. Some of the changes that would be implemented would include adopting employee motivation strategies, installing more checkout points for their brick-and-mortar stores, extension into new markets, and adopting targeted advertising campaigns to change employee perception of Walmart.
Throughout the process, the company needs to keep Walmart shareholders informed at every step of the process. Once the various strategies are implemented, Walmart should carry out monitoring and evaluation to ensure that the instituted changes deliver the intended objectives and, wherever there are discrepancies, carry out the required corrective measures.
Lean manufacturing and innovation: How does Nike do it? ufuture, (2018, Feb. 28). Retrieved from https://ufuture.com/lean-manufacturing-innovation-nike/
Our Business, Walmart, (2021). Retrieved from https://corporate.walmart.com/our-story/our-business
Blocher, E. J., and Hicks, M. (2019).Accounting for decision making: Text and study guide.Boston, MA: McGraw-Hill.
Griesberger, P., Leist, S., & Zellner, G. (2011). Analysis of techniques for business process improvement. ECIS 2011 Proceedings. 20. https://aisel.aisnet.org/ecis2011/20
Gygi, C. & Williams, B. (2012).Six sigma for dummies, 2nd edition.Hoboken, New Jersey: John Wiley and Sons.
Jardim, K. P. (2013).Improve strategic supplier performance using DMAIC to develop a Quality Improvement Plan. California State University, Dominguez Hills.
Kundu, G., & Manohar, B. M. (2012). Critical success factors for implementing lean practices in it support services.International Journal for Quality Research,6(4). http://www.ijqr.net/journal/v6-n4/1.pdf
McIvor, R. (2016). An analysis of the application of process improvement techniques in business process outsourcing.International Journal of Quality & Reliability Management, Vol 33 No. 3, pp. 321-343.https://doi.org/10.1108/IJQRM-04-2014-0045
Mrugalska, B., & Wyrwicka, M. K. (2017). Towards lean production in industry 4.0.Procedia Engineering,182, 466-473. https://doi.org/10.1016/j.proeng.2017.03.135
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