Look at the future of Walmart through Its supply Chain

As Gwen Ruta said, we’ve come to believe through experience that you really can create environmental progress by leveraging corporate purchasing power. And who’s got more purchasing power than Walmart? The tendency is obvious that walmart is going to play an important role in the environmental progress. In another word, it’s called sustainability. In 2008, when CEO Scott Lee went to china, he mentioned “develop sustainably”. We all know what walmart is, but do we know what sustainability is?

Generally speaking, sustainability is the capacity to endure. For humans, sustainability is the long-term maintenance of well being, which has environmental, economic, and social dimensions, and encompasses the concept of stewardship, the responsible management of resource use. However, for Walmart – a giant company, sustainability means it should develop in a healthier way, which requires it considers not only profit growth but also the impact on environment and society in a long run. In this article, I will talk about the possible paths that Walmart could take in a sustainable way: Green supply chain

Supply chain management is the “management and control process from acquisition of raw materials to delivery to the end use”. According to a survey, 9 out of 10 companies rate SCM and stock control as the most important factor to their company’s future success. As we can see, the sustainability of supply chain will decide the whole effect of the “sustainability movement”. Here let’s called it “green supply chain”. It means making the supply chain work without harming the surrounding environment.

Setting green supply chain should be the first step for Walmart to face the coming future. Since no matter Walmart does, it will bring huge effect to the whole environment. Walmart has taken a lot of actions towards this direction. However, it should have a systematic plan for future. Look back to our history and look forwards, it’s obvious that if a company wants to run in a long period of time, it should think in long term. Such as Starbucks, it has done a lot of amazing things for its sustainable development. I think Walmart should start getting rid of its old image in people’s mind, which is a giant company only thinks about making money but not considering have a good impact on human society and environment.

It’s time for it to make a change. From its current supply chain, apparently there are a lot of suppliers which Walmart can choose. But if Walmart thinks in a “green” way, are there still so many suppliers available and willing to make a sacrifice for Walmart? Probably not. And that’s something Walmart need to work on. Regarding to the green supply chain I’m talking about, I think Walmart has to do following things to make it happen: 1. Green purchasing

Make sure the products it sells are from a clean and healthy environment. This means when it comes to the things that might affect people’s health, such as vegetables or milk, then the environment that produces it should be considered. We can call it “customer-oriented” This requires Walmart widen its connection with the manufacturers and suppliers. Building a solid and closer relationship with them is what green purchasing needs. When Walmart gets bigger, it could has its own farm and own farmers, which means they can make the whole system work in a healthier and greener way as long as they have a thought like that. 2. Green consumption

Train the suppliers and customers with product knowledge and “green” information, making sure they are knowledgeable about the things they make or sell. Because each part of the supply chain may affect each other so that it might influence the final outputs and end-users. It can be called “training”. To enhance this concept, Walmart should arrange more and more this kind of activities. Meanwhile, they can put a green tag in the product, making customers believe that’s from a green environment. 3. Green recycling

Nowadays, product recycling is playing an important role in the supply chain management. It’s no more just only about batteries. For each of the product, you should think about a solution of recycling. Walmart has to consider the cost and the value of recycling, coming up with a plan after accessing and analyzing both. Walmart can build a better system towards this issue. Because if they know how to make full use of the wastes, they know how to control the overall cost and make more profits. 4. Green logistics

History tells us if the logistics part doesn’t do well, it will affect the whole efficiency of the company distributing system. Here the green logistics means during the logistics process, company tries to reduce the production of harmful elements, such as the leaking oil, emitting of chemicals and the noise pollution. As our environment gets worse, Walmart should realize that even in logistics part they can do something to reduce the harm to the ecosystem. For example, they can think from the angle of location and distance. When they choose the manufacturers or suppliers, transportation cost and convenience should be considered. Supply chain technology

In the years to come, I further predict that many of those who fail to embrace supply chain technologies will ultimately be left behind. I think Walmart won’t fall behind because it has done a lot in its technology. In the early eighties, Wal-Mart placed heavy emphasis on developing and implementing tight supply chain solutions which has put them not only to the top of the retail channel – but into the history books.

The dramatic improvement in supply chain technology makes Walmart dominate its competition in retail industry. Basically if you pick up an item in Walmart, from the moment the cashier scan your item, the whole system starts running. The central warehouse, manufacturer and even the raw material supplier will get notified in few seconds. And they will fill it in with another new product. Technology makes everything easier and faster. However, this is not enough for the future Walmart. My opinion is that Walmart can do better in this part. Here are details: 1. Accounting system

Here I’m not talking about customer accounting system. Instead I’m talking about suppliers’ accounting system. Actually Walmart could have done better. I think it can set up a new system which makes supplying much easier. It can not only reduce its labor cost, but also can bring a lot more convenience to Walmart and the suppliers. For example, it can set up a machine or device, when Walmart gets a bunch of new products in, suppliers just press few buttons get the products scanned, pay for it automatically, without talking to the person who is in charge of it. A lot of time can be saved in this way and meanwhile it makes sure the trading grow sustainably. 2. Delivery system

As online shopping spreads rapidly, Walmart has also entered this group to attract more customers. Actually it is also applicable in the supply chain management. In the future, people may not want to go out and shop, so as suppliers. But some companies are worried about the shipping speed if they order online. But Walmart can get it under control in this part by building its own delivery system or spot, and making it fast and accurate. This will make the whole experience different and unique. And it is feasible to do for Walmart because of the scale of the company. 3. Database application

This part of technology will make Walmart as a permanent home for suppliers. My point is Walmart can build up a database for each of the suppliers. It provides the platform which can be registered by all the suppliers. When a supplier sells one thing, this product information and the supplier characteristics will be recorded in the database, which means it will make a conclusion about this supplier’s production procedure and focus. And the system will analyze this supplier’s background and even come up with conclusions.

So that there will be some suggestions for the suppliers, such as how can they achieve those standards set by Walmart and how close they are. The system will automatically choose the suppliers to provide certain products. So this will be more scientific and meanwhile it can reduce the cost to do investigation about all the suppliers. 4. Quick response system

Walmart has done a lot to speed up its response to the changing environment. However, our environment keeps changing every second. It requires Walmart keep up with the speed of changes. Based on the existing system, there is no doubt for Walmart to build a responding system. And it is necessary for a giant company to keep growing in the future. Nobody can tell future, so a quick response to the crisis or change from outer environment is very essential for a company to avoid “surprise”. 5. Technology evolution

By saying evolution, I mean when Walmart has developed in a certain scale, it’s important to influence the society and environment with its current technology. The technology that Walmart has used probably could use in some other circumstances. For example, educating the farmers who plant Walmart vegetables or spreading its transportation technology to its suppliers. It probably will increase the efficiency of whole industry. There are so many cases that sharing resource can bring more profits and productivity. So this is one of the things Walmart should consider. Supplier management

For a company like Walmart, how to manage those thousands of suppliers is always an issue. How to make an effective supplier management is not only depends on technology. Setting up some standards and regulations is the first thing to do. But 21th century requires Walmart to think not just for itself. For instance, Walmart should make some standards for suppliers or farmers who provide the products. If Walmart wants to import fish, it should make sure that those fish are living in a clean and pollution-free river or sea. Walmart better comes with some numbers or specific requirement about the fish. In this era, the essence of supplier management is no more about controlling or manipulating. It’s more about win-win pattern.

Walmart could help the suppliers by offering advanced technology and resources to help them maximize the cost and fasten the production. While building the long-term mutual trust, the overall cost will be decreased for sure. Generally supplier management consists of 7 parts. There are quality, cost, delivery, service, technology, asset, people and process. During this process, Walmart can not only form a strong power of bargaining, but also improve the effective of the whole operating system. Supply chain localization

As we all know, Walmart keeps expanding to overseas countries, such as China. During this expanding, it has faced with the problem of localization. Just like people, Walmart has culture shock as well. Even though in terms of the supply chain, it has the localization challenge. Walmart is one of the largest company in the world. And in recent years, it’s expanding to countries like China. Because there are so many suppliers in China, so this can be a good opportunity for Walmart to lower its costs and increase its martket share.

But one thing Walmart should remember is how to fit its own style into the local culture and customs. I’m sure many lessons have told Walmart about localization. In order to develop in a better way, I think Walmart should learn how to deal with the local suppliers, the design of shelfing,packaging may vary according to different locations and countries. But putting a universal standards for each item is necessary for the company and accepted by customers. So I think no matter where Walmart goes, it should stick to certain of principles in business while it changes. Quality control and regulations

In order to grow in a sustain way, in the future Walmart should set up its own standards and strict regulations to the suppliers and manufacturers. Especially in the food industry, food security and quality control are vital important for the long-term development in this field. And food is always relevant to the sustainability of human beings. So good controlling on this part is first thing to make sure it is a sustainability development. From the control of raw materials producing to the end-users experience, Walmart has to set up specifit standards for various suppliers to achieve.

Take pork as an example, from the moment the pig is born, it is monitored by Walmart step by step, until the pork is put in the shelf for customers to choose. From the organic pork label incident in Walmart china, I’m sure people will get more concious about this who the whole system behind a piece of meat. Creating its own supply chain

When time is right, to make sure all the products are produced in a sustain way, Walmart will create its own supply chain, which is possible for a company like this to make it happen. Creating its own supply chain doesn’t mean abandon all the precious suppliers. But it means it can turn those trustworthy suppliers to Walmart’s. I believe that’s the tendency that Walmart could have seen. The benefit of creating its own thing is marvelous. It can build up its own “green factory”or “farm”. The farmers and workers out there can be Walmart employees. This means Walmart creates a moving cycle for itself. It’s much easier to put everything under control. Conclusion

Above few ideas are based on the case and what I experienced and learned. There might be some flaws in the ideas. But my key point is that Walmart as a large company can come up with much more ideas for protecting our environment and keep the growth sustainable. If the profit growth is all Walmart wants, then it can go far in the future. Sustainability is always a topic among the big companies. Whether Walmart can do a better job or not depends on how it makes use of its existing technology and supply system.

Use 100% renewable energy, produce zero waste, sell products that sustain our resources and environment and a win for society and a win for business. These goals are what Walmart should be moving towards. Based on what Walmart has done for decades, the supply chain will get better and better as technology develops and Walmarters change their concept of development. I’m sure there will be a bright future for Walmart’s sustainable development.