Walmart: systems thinking

Understanding and managing customer needs is a significant element in business success. However, inventory management faces multiple challenges that affect the supply chain. Walmart, the American giant retailer has constantly faced inventory challenges that have resulted in inefficient processes, inability to meet customer demands, and inability to manage its store space leading to loss of revenue and reputation damage (Trujillo, 2016). System thinking or system analysis is an approach of viewing systems within an organization from a broader perspective. It involves the use of diagnostic tools to understand a problem and explore multiple ways of addressing it. It is an imperative strategy when solving an issue that is chronic and has a known history where previous interventions were unsuccessful in solving the issue.

In exploring the inventory management challenges at Walmart, this proposal uses Rich picture and CATWOE system thinking tools to have a better understanding of the problem and propose an appropriate solution.

Rich Picture for Walmart

Walmart inventory management challenges occur due to the poor tracking of goods in the store. This affects the distribution chain causing a lack of stock in the shops and loss of revenue. The various factors that related to the scenario are illustrated in the rich picture below. The system thinking tool shows that the outcome is a loss of revenue. The inability to track goods in the stores is caused by a lack of effective software after abandoning RFID software in 2009 shortly after its introduction in 2006 (Rosenblum, 2014). This has caused messy stores that lead to the destruction of goods and time wastage as workers trace goods manually. Untimely tracking of goods causes a shortage of products in the retail shop which leads to customer frustration, dissatisfaction, and loss of customers to competitors. This has an impact on the reputation of the organization which affects its image and revenue.