Leaked Walmart memo lists strategy to tackle Overstock, stop deliveries

  • Walmart is allowing regional general managers to partially or completely stop the system.
  • Employees said the system, ISA, placed automated orders for products that were already in the store.
  • This change comes as employees have a wide range of issues due to overstock at the store.

According to an internal memo seen by Insider, Walmart is allowing stores to shut down its automated inventory-ordering system in light of the company’s excessive overstock in recent months.

Walmart sent a memo to store managers on Saturday, two days after Business Insider published an in-depth look at Walmart’s excess-inventory issues. In the report, store-level employees detailed the myriad pallets that provided the floor with unmistakable, spacious boxes that blocked access to spaces like private breastfeeding rooms and bathrooms, and outdoor trailers filled with overstock.

Walmart did not immediately respond to a request for comment for this story.

“We have heard your concerns regarding the ISA tearing system” and the regional general manager “will now be able to submit changes,” the memo said. Depending on how overloaded their stores are, these managers may decide to keep the ISA running, close the ISA for general merchandise but keep it running for food and consumables, or close the ISA entirely. can. The memorandum also states that stores must complete various inventory procedures before opting to close the ISA.

An employee at Walmart, Florida, told Insider that ISA is a computer-generated algorithm for scheduling orders introduced by Walmart a few years ago, and the company “has been getting more aggressive with it over the past year and a half.” “

memorandum

An internal memo received by store managers detailing the process of stopping the ISA.

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Many store employees and store managers have told Insider that the inventory system has caused a myriad of problems for stores, including ordering more items than they already have.

“The system will automatically zero the count for ‘not’ seen items in a few days,” said a Texas store manager who’s been with Walmart for more than a decade. “So if something doesn’t get on the shelf in 24-48 hours, the system will zero it out, then the ordering system will see that we’re out and then order more merchandise. It’s a vicious cycle.”

The Texas store manager said the pause at the ISA is meant to “slow down the inventory flow.” But it may only be a band-aid solution: Several managers said they felt pressure to get the ISA up and running as quickly as possible. The Texas store manager said his supervisors said, “It would be in my best interest to hold the freight by Friday and work toward getting the ISA back the following week.”

Walmart leaders said in May that the company ended the previous quarter with a 32% increase in inventory due to inflation and supply-chain issues. Analysts have told Insider that they expect this issue to persist well into 2023, with store-level employees paying a price.

“We’re being blamed for poor procedures when it’s really a flawed system,” the Florida employee said. “There’s basically no chance in the store.”

Towering box at Walmart store.

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Towering box at a Walmart store in Ohio.

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