MGT600 Managing People and Organisations

Wal-Mart is a leading retail store in the world that continues to offer quality services to clients in the market. Their quality improvement and control method has earned it a competitive advantage in the market as explained by Islam, Naisra, Pritom, and Rahman (2016). Currently, the company uses different quality control and improvement methods to meet the expectations of its customers. For instance, for the retail store to determine whether its product is good or defective, it applies the attribute control. The company uses this control measure to determine the rate of flaws within a sample of an item as the attribute measure. With the attribute measures, the company focuses on the percentage of items with defects from suppliers. Since customers can use the goods directly without incoming inspection, Wal-Mart has issued its suppliers with supplier certificates. It has further agreed with these stakeholders that they have to take responsibility for the security and safety of the purchased merchandise. It thus justifies that the retail store‘s suppliers work under quality control agreement.

The business has established the critical control points to accommodate the suppliers’ needs and expectations. For instances, it has created a point where suppliers disclose their manufactories (Schonberger 2008). This ensures the suppliers transport the items after security inspections. The company has also compelled the suppliers to undergo a third-party inspection. Therefore, with self-assessment audits, the company is assured of quality control and management. In fact, Wal-Mart representatives validate the self-assessment audits to confirm the quality standard of the merchandise. Finally, the company has further established its factory security standards that its suppliers must use. Given the significance of quality control and management in creating customer value, Wal-Mart has invested its fortunes in it. The paper has thus considered this process and used the Pareto Chart to analyse it based on the results.

Important Quality Characteristics or Performance Indicators

The problem experienced in this process is poor quality control and management. This problem is associated with people, process, equipment, and material, management and environment.

Fishbone Diagram

The hyper-competitive business environment has become complex thus making the processes challenging as explained by Bose (2012). In overcoming this challenge, it is important to analyse the current position to help in identifying the problems thus allow the business to move forward and resolve the issues. Fishbone Analysis is one of the practical methods to analyse the business processes intensively. Balanced Scorecard Institute (2007) recognizes the significance of the fishbone diagram in finding a problem and resolving it. The cause and effect analysis has become the tool for quality control. Wal-Mart continues to invest in fishbone diagram to improve quality. Since the retail store experiences separate problems, it has opted for the fishbone analysis instead of Pareto analysis. For instance, the company has lost connections thus interferes with its supply chain and efficient suppliers.

Wal-Mart’s representatives always have several problems that are distinct because of the different suppliers the representatives handle. For instance, the problems emanating from the suppliers could include materials, inexperienced workers, inspectional skills, and technology (Wingfield 2002). The fishbone diagrams help the company to separate the causes and its effects as demonstrated in the diagram below. It thus justifies Wal-Mart uses a continuous improvement.

Source: Joshi & Kadam 2014

The above fishbone diagram identifies the influencing factors that affect the company’s success. Since the inception of Wal-Mart, technology has been the enabling factor. Any deficiency in the process can easily affect the supply chain of the firm.

5 Whys Technique

This method reveals the reason for the problem and notably done based on different classic categories based on the fishbone diagram as explained by Bose (2012). It reveals the factors that have caused the issue.

Incompatible software

The efficient supply chain requires compatible equipment and machinery that can enhance proper management. For Wal-Mart, technology is the factor that has made it thrive as it uses it to maintain the supply chain. However, if the suppliers lack compatible technology, it becomes difficult to overcome the management issues. The IT system failed to connect with the suppliers’ computers as anticipated. The trickling effect is the high maintenance costs of the IT system thus affecting the suppliers’ operations.  Therefore, the software and hardware of the firm’s operation system lead to failures thus making it difficult to offer satisfactory customer services.

Faulty Process

Businesses thrive based on the efficient performance of their supply chain and quality control or operational processes. With a sound process, the organization gets the synergy to succeed in the retail industry. In Wal-Mart, faulty business processes were evident in the ordering suppliers to take goods shipments (Samson & Daft 2011). With this problem, customers could not access favourite products on the shelves. The company has also experienced excess stock problem and replenishment issues products. This justified that the company’s overall quality control process was incompatible with its IT system.

Workforce issue

Companies with effective and efficient human capital can maximize sales thus realize business growth. The employees of Wal-Mart never offered the standard customer services. This is the only way the firm can create a better impression. With the shrinking rates for Wal-Mart, the employees seemed to have developed negative impression. The employees could have also had trouble in communicating with management.

Material problem

The management of materials would ensure the high-performed and smooth supply chain management. Wal-Mart has to handle the unmanageable material quantity that can create inefficiency in handling the material process. The firm needs to establish an efficient warehousing system to help in handle inferior or defect products. This compelled the firm to carry undesirable costs thus affecting its pricing strategy.

Environment issue

The business environment should be conducive to high business success. Every company strives to establish the best environment to remain competitive in their industries. Wal-Mart is operating in a competitive retail market where companies are giving it a run for its money. Some of the competitors provide fierce competition thus compel Wal-Mart to fight back. With the unrest demand in the market and continuous price wars, the company’s concentration has been disrupted. The adverse environment has made the promotion-driven model difficult.

  Wal-Mart has used attribute control chart to estimate the defective products that are carried by any supplier (Schonberger 2008). Sometimes suppliers carry defective or faulty products, and the company must be extra vigilant to detect such problems early. With the control chart, the company can determine the percentage of these defective goods. As indicated in the control chart below, Wal-Mart has established an acceptable defect limits to ensure the process continues. For instance, if the percentage of the defect is outside the limits, the process would be stopped thus pursue any assignable cause. For instance, this defect could be attributed to the material the manufacturers use to manufacture the goods.

Six Sigma Practices

This is a method allows companies use to manage information, and determine the operational problems they experience. The Six Sigma method focuses on statistical analysis and facts to measure, define, and improve the operational practices, performance, and systems of an organization (Zahn, Watson, Voelkel & Patterson 2003). With the Six Sigma, Wal-Mart has managed to identify defects in its service and manufacturing-related processes thus anticipate the total customer satisfaction. In fact, with this method, the company has stood to achieve customer satisfaction. According to Joshi and Kadam (2014), the Six Sigma provides the processes companies can use to improve their products by following five steps including defining, measuring, analysing, improving, and controlling. The company, in question, has used the six-sigma practices to realize the process improvements. This reason has pushed the company to a soft landing thus making it the best retail store in the modern world.

Wal-Mart has opted for the Six Sigma procedures in nearly every operations and processes within its stores. According to the company, the supervisors and managers have undergone training on how to handle the defect products. They have the capacity to look for important features, analyse and measure these attributes. The managers have understood how they can improve and continue improving the systems through the Six Sigma as indicated in the diagram below.

Pareto diagram

This strategy has never been used by Wal-Mart but is an important strategy to determine the cause and effect of the problem. The diagram below illustrates the relationship of the percent of rework costs and rework cause. In the graph, the reasons for the rework occupy the largest share. The second largest cause is placed at the next share as indicated in the graph. The drawn line shows the accumulated effects of these causes as it moves towards the right side of the graph. According to Gorener and Toker (2013), the Pareto diagram indicates that owner changes significantly affected the organization more than any other causes. The design change is the second greatest effect as it accumulates about 75 percent of the effects.

The Pareto charts seem to address the aspects of improvement efforts based on the ranks of the issues and causes. Arvanitoyannis and Savelides (2007) held that the Pareto analysis bars are arranged depending on the frequency or severity of the problem.

Source: Ahmed & Ahmad 2011

Third-party inspection

Wal-Mart has introduced one of a unique inspection type that involves the use of a third party. To Wal-Mart, the suppliers have no option but to allow third parties to inspect the products they carry. The company also expects the suppliers to have an operator inspection that has seen Wal-Mart’s representative to validate the inspection. The company has further compelled its suppliers to undertake a transportation inspection.

Six Sigma PDCA Cycle

Given the issues of quality control and management, the company needs to use Six Sigma PDCA cycle so that it can integrate logic into its control management processes. According to Chodvadia and Hirpara (2013), this cycle involves plan, do, check, and act like the only way to implement the improvement phase. Wal-Mart has to employ this quality control method to increase profits and decrease the bottom line.

Plan

The company needs to improve its quality control measures so that the suppliers can use the compatible software on their computers (Sokovic, Jovanovic, Krivokapic & Vujovic 2009). There is no way Wal-Mart can improve its efficiency if the suppliers use the incompatible software. This will disrupt the supply chain management thus delaying the delivery of quality products to customers.

Do Step

The company has to help the suppliers in updating their software and train staff to understand how the system works (Gupta 2013). In this regard, Wal-Mart will benefit from continuous, relentless and on-going improvements. The firm will measure the performance based on efficient delivery of products to customers thus improves its profitability.

Check Step

This phase ensures the team assesses whether the measurements provide the desired results. The assessment process may involve the use of sales, returns, outputs, and the productivity of the workforce. The speed of delivery and swift flow of orders would justify the significance of this step.

Act Step

Given the positive output and results associated with introducing new software that is compatible with the suppliers’ computers, it is prudent for the company to adopt the change by compelling its suppliers and producers to use the technology to make the supply chain efficient as argued by Salah, Rahim, and Carretero (2010). Therefore, the team can affirm the changes will improve the process of quality control and management in Wal-Mart.

Conclusion

Wal-Mart can integrate quality management system and Six Sigma to maximize benefits from different systems. Without an iota of doubt, business processes provide the relevant inputs as defined in the company’s quality management system. The process has to map the interaction of processes to form analytic framework. Therefore, the six-sigma model provides an objective-oriented model that the firm can use to identify the projects promising success. As demonstrated in this study, Wal-Mart has depended on the quality chart; attributes control management, and six sigma practices to determine the quality of its processes. Given the emerging challenges in the market, the retail store should use the Pareto analysis because this model can identify the failure of products. Through this process, the company will determine the frequency of failures thus prevent the future problems.

Bibliography

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Balanced Scorecard Institute, 2007. “Basic tools for process improvement”, Module 5: Cause and Effect Diagram, Available at http://www.balancedscorecard.org/files/c-ediag.pdf 

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Wingfield, N, 2002, Nov 22. “Amazon prospers on the web by following Wal-Mart’s lead”. The Wall Street Journal, available at: https://www.wsj.com/articles/SB1037918101430594628 

Zahn, D, Watson, GH, Voelkel, JG, & Patterson, A, 2003. “What influence is the Six Sigma movement having in universities? What influence should it be having?” ASQ Six Sigma Forum Magazine, vol. 3, no. 1, pp. 33-38.