Wal-Mart Seeking Control of Inbound Supply

image: Wal-Mart truckAs the business world actively pursues improvements in the supply chain, many companies are also taking an active role in managing their inbound logistics and outbound distribution processes.  These comprehensive business sustainability programs include not only internal company operations but strategies to address processes that extend beyond the physical boundaries of the business.   Many larger corporations, like Wal-Mart, are addressing the need for efficient, cost-effective, and minimal impact supplier distribution systems.

“Wal-Mart is contacting all manufacturers that provide products to its more than 4,000 U.S. stores and Sam's Club membership warehouse clubs.  The goal: to handle suppliers' deliveries in instances where Wal-Mart can do the same job for less, then use those savings to reduce prices in stores.”  Kelly Abney, Wal-Mart's vice-president of corporate transportation.

For the most part, today’s supplier distribution systems rely heavily on the use of self-procured air and truck delivery. These transportation modes come with significant environmental and social touch points.   With increase control, Wal-Mart may be positioned to address:

•    Heavy energy consumption to weight ratios
•    Heavy emissions to weight ratios
•    Increased road and infrastructure costs
•    Large distribution and warehousing footprints
•    Road and air traffic congestion

Within our professional consulting experience, businesses need to similarly develop process of policies to address sustainable distribution practices across all freight transport modes.  Key components of a sustainable logistics strategy include:

•    Sustainable model to product distribution.
•    Integrated transport philosophy coordinating all transportation modes.
•    Openness to explore alternative transportation.
•    Aligned values with freight and end-customer delivery partners.

The successful implementation of any sustainable business decision takes buy-in and commitment from key stakeholders.  Driven by the eventual pass-through saving to its customers, Wal-Mart is leveraging its massive purchasing power and existing logistics resources to implement a new supply chain model.

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