MGT603 Systems Thinking Online Tutoring

System 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.

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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.

CATWOE Analysis of Walmart

CATWOE is a problem-solving checklist with six defined elements to explore the system or process by highlighting the roots involved in converting inputs into outputs. The six elements are Customers, Actors, Transformation Process, World View, Owner, and Environmental Constrains (CATWOE) (Pandey, 2011). This tool does not explore the problem as seen in the Rich Picture. The table below represents a CATWOE analysis for Walmart.

Through this tool, Walmart should address the needs of the customer which is the availability of stock in the shops. The actors are responsible for ensuring efficiency in the distribution chain by ensuring there are adequate goods in the store and appropriate technology is used to track them to ensure they are placed on the shelves on time. This process should be handled by Walmart through the management at different levels (IT, Storage, Supply Chain, and Retail). The execution of this process should follow the law and ethical practices as well as operate within the available resources. After an effective integration of these inputs, the retailer will experience customer satisfaction, increased sales, and recover the declining revenue.

References

Pandey, A. (2011). What is CATWOE analysis?

Rosenblum, P. (2014). How Walmart Could Solve Its Inventory Problem And Improve Earnings. Retrieved from https://www.forbes.com/sites/paularosenblum/2014/05/22/walmart-could-solve-its-inventory-problem-and-improve-earnings/#6b22359a5db1

Sylvester, A., Tate, M., & Johnstone, D. (2007). Re-presenting the literature review: a rich picture of service quality research in information systems. PACIS 2007 proceedings, 113.

Trujillo, P. (2016). Walmart Is Addressing Inventory Problems With a New System. Retrieved from http://www.waspbarcode.com/buzz/walmart-2/