Quita!!! I hope you are feeling better. Get all of your sicknesses out now…before you sit next to me next semester 🙂
I am so happy you posted about this. I wanted to address it in my write-up, but did not have a chance because of the word limit. While there may be some truth to the accusations of Walmart being tough on its workers, I want to try and remain completely objective. In order to do so, I believe it is important to look at it through the lens of what Walmart provides its employees. Walmart employs the third most individuals in the world at 2.1 million people, behind only the U.S. Department of Defense and China’s People’s Liberation Army. Because of Walmart’s frugality, it has been able to provide careers and opportunities for over 1.4 million people in the U.S. alone. Walmart’s prudence, across all areas in its business including labor, has enabled it to achieve success on such a large scale. Without these frugal policies, Walmart probably would not be able to employ as many individuals. This moderation also applies to executives who reportedly fly coach and share hotel rooms with colleagues.
On the other side of the objectivity lens, Walmart probably has been tough on its employees. However, Walmart has listened to critics and recently adjusted its policies. This past January it raised starting salaries to $9 an hour, and promised to raise it to $10 by this coming February, well above the minimum wage of $7.25. It has also put forth more training programs, employee benefits, and flexibility in scheduling shifts. This $1-billion investment is a huge commitment to its employees. I am surprised there has not been more publicity. Critics have been quick to attack Walmart, but there seems to be no praise when they do right. It will be interesting to see two things in the coming years. First, will worker productivity increase because of the changes? Second, will the Walmart hire rate slow now that labor costs have increased and the productivity of one employee increase (less workers needed for each sale).
Thanks for your questions:
1) there is a significant amount of automation in Walmart warehouses. They have thousands of machines that pick, pack, and sort items. Walmart has also sped up its delivery times by 15% by using a new algorithm to locate and sort items. They are also starting to have workers pick and ship products from within their over 4,000 retail stores. This is more efficient than shipping a product over longer distances if it only used its warehouses.
2) I have not been able to find any results based on the mobile order and in store pickup. However I do know that almost half of the online orders placed on Walmart.com were completed on mobile devices. I am not sure whether customers picked up their orders in stores though. I do think that this purchase method is incredibly convenient. A lot of times, a certain SKU is only available as an in-store purchase. With the mobile order, a shopper can put a high demand product on hold, so he/she can ensure it is in stock when they arrive. This will save the shopper time once they are in the store.
A necessary part of this business plan is to have people buy into it. You will need everyone to start paying a separate service for organic food removal. How do you think Harvest Power can successfully tap into this demographic? Why wouldn’t people just throw organic waste into their own composts, without a need to pay a fee. Do you think Harvest Power runs the risk of not being successful because its business model does not adress the recruitment of organic waste generators?
Very interesting article, Anh. I am curious to know what challenges you see Amazon facing in the future. Do you think Amazon Prime has been a huge success for the business, or is the subscription not expensive enough to bring in a profit? Do you see Amazon needing to create a tiered pricing strategy for those who order more and get more goods shipped?
Also, do you think Amazon has more competition now that companies are starting up there own eCommerce websites? How will Amazon be able to compete with the new digital stores?
I really enjoyed this article, Dan. Do you think LL Bean should change its operational capacity? Right now the Duck Boot is a fad, what happens in a few years when they are no longer in style? What risks do scaling up its production process have when demand eventually cuts back; doesn’t LL Bean run the risk of worker and machine utilization plummeting?