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Select a business that you believe has a good communication network. Examine its network design and explain why you think the network is effective and efficient. Recommend a better network design which can support the decisions and operations of the business if there is any.
Your paper should be a minimum of three pages long APA style. Include a network diagram as reference, and at least more than two scholarly references, in addition to the text.
My company of choice, one that has a good communication network, is Walmart. Walmart is the largest retail market in the world according to the Fortune Global 500 list of 2014 and was founded in 1962 by Sam Walton. According to Fishman (2006, p. 5-6), the company has more than 2.2 million employees worldwide working in its various chain hypermarkets, department stores, and grocery stores all over the world. Since its inception, the business has always focused on meeting customer needs and thus has always employed impeccable customer service. It also sells its products at low prices by ensuring efficient supply chain management whereby it implements the hub-retail-spoke system. The system guarantees the ordering, assembling, and distribution of goods at the same location as well as tracking and preparation of reports. In 1974, Walmart introduced computer systems and began to utilize the EDI system to communicate with suppliers about orders required and store sales information. Computer use was meant to ensure the cataloging of items reconciled and was maintained by providers to the stores.
Network Design and Why the Network Is Effective and Efficient
Walmart has always put a value on its distribution, inventory control, and communication systems to ensure competent management. In 1974, computers were incorporated and were later replaced by the use of point-of-sale scanners that were meant to reduce the time that customers took to check out. The scanners recorded the sale of the products and reduced product quantity in the inventory in order to reconcile the products in the store.
Since 1987, the business has relied on a satellite communication system put in place as their communication network design. The system which was estimated to have cost twenty-four million dollars became the first private satellite to be used by a private company (Wang, 2006, p. 45). It was used to link up the organization’s headquarters, distribution centers, suppliers, and stores by ensuring direct transfer of information among them. It constitutes two-way data and voice communication and one-way video communication that promote communication and reduce its cost. Additionally, it is utilized in communication whereby managers communicate easily with all employees and also hold meetings with different store managers concurrently. The system achieves this by utilizing voice and computer data and video broadcasting which are transmitted from the headquarters to all other stores. For instance, the satellite signal is used to relay broadcasts during holiday seasons concurrently as a way to boost sales. The system also links over 1,800 suppliers to Walmart.
The system facilitates timely placement of orders whereby the satellite system timely informs a manager about depletion of a product and a reorder of the product is sent out to the supplier simultaneously. The goods are brought, paid for, and shipped to the designated stores electronically. In the instance that products cannot be shipped to particular stores, they are availed at a central distribution location where computers powered by the satellite system sort them out, scan and barcode them, and distribute them to their respective destinations. The system is also used to control the climate in different stores. It does this by linking all Walmart stores’ lighting, heating, and air conditioning controls to the company’s headquarters, thereby reducing the cost of its management and use.
The satellite system is efficient as it has helped Walmart’s business operations become instantaneous. It cuts down on cost through optimal use of time and efforts. It does so by ensuring that data, voice communication, and messages are relayed at a speed of 56 kb each second making it the fastest method of data and communication movement as compared to 24 kilobytes per second for communications through the telephone (Wang, 2006, p.47). In the same breadth, increased speed is witnessed during credit card approval that translates to speedily expedited customer service thus attracting more customers due to efficient service provision. Utilization of this system to order and pay for products ensures that there is a constant supply of different products at all times and this ensures customer satisfaction and efficiency. Sharing of videos to be broadcasted in the stores as well as information sharing in general have become faster as now they are electronically sent as opposed to mailing them to respective stores. Therefore, with these improvements, Walmart has benefited from increased sales, reduced service costs, and time, translating into profits for the business.
Walmart seems to have realized the importance of communication competence for improved business performance. “The logic here is that superior communication competence results in better individual and organizational performance” (Garnett, Marlowe & Pandey, 2008). An organization would experience better effectiveness, performance, and goal achievement by having communication competence. Specifically, productivity may be boosted through downward task communication while the same productivity may be better predicted through person communication. At Walmart, whatever organizational change done has to take into account the need for communication. One of the core values of the company is “respect for the individual”, which emphasizes the importance of listening (Walmart.com, 2017). The company believes that by listening and being open to feedback, all employees may be able to collaborate with one another and better serve customer needs.
Implementation of the satellite system by Walmart has resulted in over 100 billion dollars in sales as compared to sales made in 1985 of 8.5 billion dollars. Further, utilization of the wireless networks has enabled the business create significant presence on social media platforms such as Facebook and Twitter and additionally use websites to market and sell its products. These social media platforms have therefore widened the market for Walmart’s products as customers can familiarize themselves with various products sold at the company’s stores. Therefore, reliance on this system for communication has proved to be efficient, cost-effective, and profit-boosting and as such, Walmart should maintain it.
Walmart communication network diagram (Wal-Mart Supply Chain Source, 1992, March–April 2, pp.60).
Fishman, C. (2006). The Wal-Mart effect: How the world’s most powerful company really works, and how it’s transforming the American economy. New York, NY: The Penguin Press.
Garnett, J., Marlowe, J., & Pandey, S. (2008). Penetrating the performance predicament: Communication as a mediator or moderator of organizational culture’s impact on public organizational performance. Public Administration Review, 68(2), 266-281.
Wal-Mart Supply Chain Source. (1992, March–April 2), Adapted from Garrison Wieland for “Wal-Mart’s Supply Chain,” Harvard Business Review 70 pp. 60–71.
Walmart. (2017). “Managing risk in our supply chain”. Corporate.walmart.com. Retrieved 15 December 2017, from https://corporate.walmart.com/sourcing/managingrisk
Wang, J. (2006). Economies of IT systems at Wal-Mart-A historical perspective. Academy of Information and Management Sciences Journal, 9(1), 45-66.