Whole Foods Inventory Management Paper

Founded in Austin, Texas Whole Foods Market is a supermarket that sells natural products at a reasonable price. After opening its doors for the first time 1980, Whole Foods became an immediate success. At the time natural food supermarkets were not common in the United States, which made Whole Foods unique and diverse. Since then, Whole Foods has become a vastly popular chain supermarket that continues to expand each year. According to Chapter 12 in the textbook, inventory management is crucial to every business and there should be a good balance between inventory investment and customer service. For most businesses, inventory is one of the most expensive assets, and most companies try to reduce costs by reducing inventory, just like how Whole Foods did in recent months. It is important for businesses to set up an inventory planning and control system to effectively have control over its inventory. For firms, inventory typically represents as much as 50% of total invested capital, and with appropriate inventory management planning, low-cost strategy can be attained. For past few years, Whole Foods struggled with achieving an appropriate inventory management strategy. Whole Foods could not find a balance with inventory levels, and multiple stores had excess inventory with back rooms and freezers chaotic with unsold items and food

It has been predicted this type of inventory management system will only be popular for a short period of time, just like how just-in-time inventory was popular a generation ago. Although the system sounds beneficial, it is dangerous when companies like Whole Foods lower their inventory too much and are left with empty shelves and angry customers. Moreover, Whole Foods believes their order-to-shelf system isn’t entirely to blame, and thinks other factors, such as the weather contributes greatly to supply