Inventory Management

Assignment 2: Inventory Management

BUS430 Operations Management

Inventory Management
Target and Wal-Mart

The two service companies that I chose to focus my paper on Wal-Mart Stores, Inc. and Target Corporation. There two retailers are located fairly close to my living quarters. They both offer similar products. I have also seen these companies grow and compete with each other. Just in the recent years, they added food and beverages their products that they offer. They are a couple of miles apart. When a choice has to be made about where to go for products and services, it is usually a decision between brand and price.

Wal-Mart is the largest retailer not just in the United States but around the world. Wal-Mart’s headquarters is located in Arkansas and employs 2,200,000 people. Wal-Mart is also amongst the top three largest corporations in both the United Sates and the world. Its brand is also amongst the 25 most recognizable brands in the world by Business Magazine. In the United States, Wal-Mart offers discounts stores, supercenter stores, neighborhood market and other smaller stores.

Target Corporation is a large retailer in the United States. Target’s headquarters is located in Minnesota and employs about 366,000 people. Target has a very strong brand name. For this reason, Target is able to reach markets and maintain their loyalty of their customers. Target is ranked amongst the top 50 corporations by Business Magazine.

Types of Inventories

Wal-Mart uses radio-frequency identification for their inventory needs. Radio –frequency identification also known as RFID technology transfers information imbedded on tags placed on a product or other object, that helps track and provides identification. RFID tags offer more advantages than barcodes. They store more identifying information and clear tracking information.

Target was using barcode technology and electronic data interchange technology. Electronic Data Interchange or EDI is an electronic communication platform that provides the exchange of data. This data is exchange between two parties, either internal or external. To make this simpler it is a way to exchange electronic documents.

Goods and Service Design Concepts

Target is known as the high-end discount store where Wal-Mart is viewed as the cheapest discount store. If you were looking to buy something more modern looking, you would most likely go to Target. If you were shopping for something more economical, you would visit a Wal-Mart. Although these two store share many of similar products, they branch out and market different things. They have been going head to head for a long time now.

When Wal-Mart started to sell food Target soon followed. When Target started to focus on apparel, Wal-Mart took extra time to do the same. One thing that hasn’t change is Wal-Mart focus on being the low cost place to go and Target’s focus on being the low cost “chic” place to go.

Inventory Verses Performance,
Operational Efficiency & Customer Satisfaction

There is plenty of completion out there. With the economy not doing so well and millions of families looking for ways to get more bang for their buck, companies have to make sure that customer satisfaction is upheld. Americans are more aware of value these days and want to stretch their dollars. A great way to accomplish this is by having great customer service, excellent company performance and operational efficiency.

Some key benefits that tracking inventory delivers are high sales, a decrease in inventory stock out and rain checks and increase in inventory turnover. Many problems happen at the register. RFID helps speed this process up by having individual tags of each product to better assist the customer. Have you ever went to a store where you had to wait on line longer because of a missing price sticker or a missing label? Customer get frustrated and might make choices not to shop at that establishment again.

Target uses barcode technology. This technology will record the sales and movement of products but will not provide the in detailed manifest the RFID technology does. The RIFD technology is captures the items and inventory that is going out. It also allows for the information to provide guidelines where product needs to be restock or reordered. You can see how this will evade inventory problems.

I have an example of a time where Wal-Mart got ahead of itself. When you visit their online store you can pick an item and pick it up at the store nearest you. Wal-Mart has successfully been able to do this will their more expensive products but not so much with other lower cost products. I was looking to purchase dry ice from my local Wal-Mart. I could not find it around any other stores located near my house. I proceeded to use the search bar and found it on their website. It did not indicate it was an online item but it did state that this item could not be purchase beforehand. So I visited my local Wal-Mart and to my surprise they did not carry the item.

Another example on how Wal-Mart drops the ball when it comes to customer service is their registers. The local Wal-Mart is open 24 hours a day and seven days a week around my house. This would seem like a good way to attract customers. The problem arises when you finally get there, there is only one cashier. The line is down a long aisle. It is about a twenty minute wait on a good day. I was so upset that after this experience, I choose not to shop there for several weeks. Even though, Wal-Mart has better prices, I chose to visit the local Walgreens and pay more money because my time I would lose was not worth the wait. I get out of work late and I would rather spend a little extra money than stand on my feet for 20 extra minutes.

The RIFD technology also provides these two retail companies with more details into their company’s operations with easier to read data and understandable information. This will lead to better decision making. Management will be able to make more informed and have well organized data. Other areas that will be positively affected are stock levels, inventory control, more productive staff members and better customer experience. This will provide supervisors and management with the necessary tools to make tailored solutions for their company.

Wal-Mart Stores, Inc. have been using RDIF technologies for over a decade. The first started to use this technology to track pallets and bulk inventory. Wal-Mart tracked their inventory throughout their supply chain, from warehouses to their store. The positive attributes that can out his technology was the decrease of over stocking products and having empty shelves. A couple of years later they started to use it on individual products.

Target Corporation requires their suppliers to use EDI technology. This is how Target establishes an efficient and responsive supply chain. Communication is never a problem its suppliers and their product. Target has an excellent relationship with their vendors.


One suggestion that Wal-Mart can use to improve inventory management without affecting operations and the customer benefit package is by updating their website with real time information for all their products. Wal-Mart’s website has real time data on their big ticket items but not for their lower costs products. This will help Wal-Mart from dropping the ball when it comes to customer service. Another way Wal-Mart Stores can improve inventory management is by having more personnel on the floor to restock items on their shelves faster. I have experienced Wal-Mart’s restocking their selves after a rush instead of during a rush. This will keep their customers from experiencing out-of-stock problems.

Target also has a number of improvements that they can implement in order to improve inventory management without affecting operations and the customer benefit package. On suggestion is to update their inventory systems. Many have complained that their food is often out-of-stock. Target is considered a high end discount store, their customers tend to be more loyal. For this reason is that it is crucial that they maintain their shelves stock.


Wal-Mart Stores, Inc. SWOT Analysis. (2013). Wal-Mart Stores, Inc. SWOT Analysis, 1-11.

Target Corporation SWOT Analysis. (2014). Target Corporation SWOT Analysis, 1-11.