Walmart’s Supply Chain Sustainability Lessons
By Susan Fourtané | EbnOnline
Walmart is by far the leading retail brand in the US, with a brand value of $131.88 billion in 2014. It has been a leading retailer since Sam Walton opened his first store back in 1962. Walmart’s success is in great part due to how the company manages and motivates its supply chain toward continuous betterment and sustainability.
What the electronics supply chain can learn from how Walmart moves toward a sustainable supply chain might be both inspiring and beneficial, and it may positively impact every other aspect of business management as well. “The first rule of thumb in creating a solid supply chain sustainability is to think broadly,” wrote EBN’s editor in chief, Hailey McKeefry, in her blog, The Benefits of Supply Chain Sustainability .
Walmart masters SCM via its Sustainability Hub
Since the beginning, Walmart focused on controlling costs by implementing innovative ways of product use, consumer behavior, and performance tracking technology in its supply chain. Walmart quickly transformed all the collected customer behavior data into wise use of historical data and big-data analytics.
Walmart is currently working with approximately 6,000 of its suppliers, which represent about 60 percent of the company’s sales, to participate and incorporate the Sustainability Index. This will affect Walmart’s buying decisions across more than 700 categories. This allows Walmart to work toward its goal of making the products it sells more environmentally friendly throughout the supply chain.
Walmart’s new retail standard is driving improvements in sourcing, packaging, and transportation to reduce energy consumption, manage risk, and bolster local communities. By 2017, Walmart will buy 70 percent of the goods it sells in US stores only from suppliers that use the Index. This, in turn, pushes suppliers and suppliers of suppliers, and so on; it involves, evolves, and advances the sustainability of the whole supply chain.
Some of Walmart’s goals, toward which the company is also steering its suppliers, include:
- To produce zero waste
- To be supplied with 100 percent renewable energy
- To sell products that sustain people and the environment
Adding value to supply chain management
Walmart’s 2014 Global Responsibility Report focuses on the value of good supply chain management by:
- Improving the sustainability of the products customers love
- Integrating sustainability into the business of buying and selling merchandise
- Reducing cost, improving product quality, and creating a more resilient supply chain
- Strengthening customers’ trust in retailers and the brands they carry
Walmart is showing that one company can create a chain of change within its supply chain by applying the right incentive and motivation to its suppliers to do the same with their supply chains. This is the way to sail toward supply chain sustainability for a better planet, one supply chain at a time.