Wal-Mart Stores (WMT<\/a>) has been cutting staff since the recession\u2014and pallets of merchandise are piling up in its stockrooms as shelves go unfilled. In the past five years the world\u2019s largest retailer added 455 U.S. Walmart stores, a 13 percent increase, according to company filings in late January. In the same period its total U.S. workforce, which includes employees at its Sam\u2019s Club warehouse stores, dropped by about 20,000, or 1.4 percent.<\/p>\n A thinly spread workforce has other consequences: longer checkout lines, less help throughout the store, and disorganization. Last month, Walmart placed last among department and discount stores in the American Customer Satisfaction Index, the sixth year in a row the company has either tied or taken the last spot. The dwindling level of customer service comes as Walmart has touted its in-store experience to lure financially strained shoppers and to counter the threat from online rivals such as Amazon.com (AMZN<\/a>).<\/p>\n The retailer says reports of stocking problems are overblown. \u201cOur in-stock levels are up significantly in the last few years, so the premise of this story, which is based on the comments of a handful of people, is inaccurate and not representative of what is happening in our stores across the country,\u201d Brooke Buchanan, a Walmart spokeswoman, said in an e-mailed statement. \u201cTwo-thirds of Americans shop in our stores each month because they know they can find the products they are looking for at low prices.\u201d<\/p>\n At a Feb. 1 gathering of Walmart managers, U.S. Chief Executive Officer Bill Simon said Walmart was \u201cgetting worse\u201d at stocking shelves, according to minutes of the meeting obtained by Bloomberg News. Simon said \u201cself-inflicted wounds\u201d were Walmart\u2019s \u201cbiggest risk\u201d and that an executive vice president had been appointed to fix the restocking problem, according to the minutes.<\/p>\n The stocking challenge coincides with slowing sales growth. Same-store sales in the U.S. for the 13 weeks ending April 26 will be little changed, Simon said during a Feb. 21 earnings call for investors. \u201cWhen times were good and people were still shopping, the lack of excellence was OK,\u201d says Zeynep Ton, a retail researcher and associate professor of operations management at the MIT Sloan School of Management. \u201cTheir view has been that they have the lowest prices so customers keep coming anyway.\u201d Ton says Walmart shoppers are \u201cmad about the way they were treated or how much time they wasted looking for items that aren\u2019t there.\u201d<\/p>\n Retailers consider labor\u2014usually their largest controllable expense\u2014as an easy target for cost-cutting. That\u2019s what happened at Home Depot (HD<\/a>) in the early 2000s, when it tried to trim expenses and boost profits by cutting staff and relying more on part-time workers. Eventually customer service and satisfaction deteriorated, and sales growth at established stores fell. \u201cWhen you tell retailers they have to invest in people, the typical response is, \u2018It\u2019s just too expensive,\u2019\u201d Ton says.<\/p>\n Adding five full-time employees to Walmart\u2019s U.S. supercenters and discount stores, for example, would cost the retailer about $448 million a year, assuming those workers earned the federal minimum wage and industry standards for health benefits, according to an analysis by Poonam Goyal, a Bloomberg Industries senior analyst. That would add about a half-percentage point to Walmart\u2019s selling, general, and administrative expenses, which were about $88.9 billion last year.<\/p>\n At the Kenosha (Wis.) Walmart where Mary Pat Tifft has worked for nearly a quarter-century, merchandise ready for the sales floor remains on pallets and in steel bins lining the floor of the back room\u2014an area so full that \u201cno passable aisles\u201d remain, she says. \u201cThere\u2019s no manpower in the store to get the merchandise moving,\u201d says Tifft, who oversees grocery deliveries and is a member of OUR Walmart, a union-backed group seeking to improve working conditions at the chain. \u201cCustomers come in, they can\u2019t find what they\u2019re looking for, and they\u2019re leaving.\u201d<\/p>\n At the Walmart store in Erie, Pa., 26-year-old meat and dairy stocker Anthony Falletta faces a similar predicament. \u201cThe merchandise is in the store; it just can\u2019t make the jump from the shelf in the back to the one in the front. There\u2019s not the people to do it.\u201d<\/p>\n Walmart is entangled in what Ton calls the \u201cvicious cycle\u201d 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 \u201crequires a wake-up call at a higher level,\u201d Ton says.<\/p>\n 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. \u201cI asked, \u2018Why can\u2019t we have enough hours to make the store work?\u2019?\u201d recalls Jackson, who has worked at two Walmart stores since 2009. \u201cThey said, \u2018It\u2019s orders from home office.\u2019?\u201d<\/p>\n Staff shortages at cash registers during peak hours require Jackson and her co-workers on the sales floor to help check shoppers out \u201cwhile we are trying to restock the shelves, help customers, and do other assigned projects,\u201d she says. That leaves a service vacuum across the store\u2019s departments. \u201cCustomers come back to shoes for help to find something in grocery because they can\u2019t find someone in grocery,\u201d Jackson says.<\/p>\n Tim White, an attorney, recalled trying to buy wall paint at the Walmart near his home in Santee, Calif.: \u201cYou 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.\u201d White says that while long checkout lines irritated him, \u201cthe No.?1 reason we gave up on Walmart was its prolonged, horrible, maddening inability to keep items in stock.\u201d The White family\u2019s visits to Walmart\u2014which had been a several times a week occurrence several years ago\u2014became less and less frequent until they stopped in the past year. The eight-member clan now shops at Target and Costco Wholesale (COST<\/a>). \u201cThings might be a little bit more expensive,\u201d he says, \u201cbut not so much so that it would keep me away.\u201d<\/p>\n The bottom line:<\/em><\/strong> Some employees say staff reductions have hurt Walmart\u2019s ability to keep shelves stocked at its more than 4,600 U.S. stores.<\/em><\/p>\n <\/p>\n 1. Discuss the \u201cvicious cycle\u201d of understaffing that has led to operational problems at Walmart in the retail industry.<\/p>\n 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.<\/p>\n 3. Walmart\u2019s U.S. Chief Executive Officer Bill Simon stated that Walmart was \u201cgetting worse\u201d at stocking shelves, and its \u201cself-inflicted wounds\u201d were Walmart\u2019s \u201cbiggest risk.\u201d What would you suggest and why if you were appointed to fix the restocking problem?<\/p>\n 4. Some employees say staff reductions have hurt Walmart\u2019s 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?<\/p>\n Need a Professional Writer to Work on this Paper and Give you Original Paper?<\/strong> <\/strong>CLICK HERE TO GET THIS PAPER WRITTEN<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Walmart\u2019s U.S. Chief Executive Officer Bill Simon stated that Walmart was \u201cgetting worse\u201d at stocking shelves, and its \u201cself-inflicted wounds\u201d were Walmart\u2019s \u201cbiggest risk\u201d because they correlated positively with slowing sales growth. The \u201cvicious cycle\u201d of understaffing has led to Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-72743","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/72743","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=72743"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/72743\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=72743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=72743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=72743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Averages](\"file:\/\/\/C:\/Users\/praneel\/AppData\/Local\/Temp\/msohtmlclip1\/01\/clip_image001.jpg\")
Averages based on total U.S. employee and store count, including Sam\u2019s Club and headquarters staff<\/p>\nDiscussion Questions<\/h2>\n