Wal-Mart’s Use of Just-In-Time (JIT) Philosophy for Improved Productivity and Cost Reduction

According to Crosson and Needles the Just-In-Time (JIT) operating philosophy requires that “all resources—material, personnel, and facilities—be acquired and used only when they are need. Its objectives are to improve productivity and eliminate waste. ” They go on to sate that this process allows funds to be reallocated according to the goals of the company’s business plan since they are no longer invested in inventory. This method helps retailers like Wal-Mart “assign more accurate costs to their products and identify the costs of waste and inefficient operation” (2011).

And from the looks of things…Wally World knows what its doing. Wal-Mart utilizes JIT throughout their stores by having extremely flexible time slots for hourly employees and through contracting with whole sellers. This allows the company to move away from the ‘just in case’ strategy and meet demand as it occurs (Hubpages). This affects their vendors in that Wal-Mart will partner with wholesalers only in order to receive the lowest costs possible on goods. They will also be able to put in orders for items as needed without having to go through a ‘middle man’ in order to meet the demand of their consumers.

It’s cut and dry. Like most things in business there always seems to be a very dark cloud inside a silver lining. Wal’Mart’s smart business decisions have lead to a monopolization of several local industries, seriously jeopardizing small businesses across the nation. There are labor issues and people across the country actively boycott the superstore…But at the end of the day, most American’s are cheerfully spoiled by the, everything, right now, and cheap mentality.

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And three days ago, I went into to Wal-Mart, picked up a prescription, bought a facial exfoliate, a baby shower gift, and some veggie burgers…. It’s a hard truth. Convenience wins out :-/ Crosson, S. V. , & Needles, B. E. (2011). Managerial accounting. 9th Edition. Mason, Ohio: South-Western Cengage Learning. Hubpages. (2010). Why physical distribution is the key to Wal-Mart’s marketing strategy and lower prices. Retrieved from http://s10ecbiztalk. hubpages. com/hub/keytoWal-Martsmarketingstrategyandlowerprices

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