Walmart Supply Network

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Procedures. Walmart focuses on making the supply chain cleaner, more efficient, and more profitable. They strive to reduce not only their impact on the environment, but the environmental effects of their manufactures and vendors (Gunther, 2014, para. 1). Walmart uses its strategic partnership with the Environmental Defense Fund (EDF) to set goals, track progress, and deliver results that can be measured (Lindsey, 2016, para. 1). In 2005 the EDF discovered that 90 percent of Walmart’s greenhouse gas emission were coming from its supply chain. Walmart realized it needed to make a change in procedures; and by the end of 2015 they had surpassed their goal by 30 percent to reduce 20 million metric tons of emissions (Lindsey, 2016, para. 2). It is as if they have taken nearly 6 million cars of the road. Having the world’s largest retailer move towards sustainability influences hundreds of manufactures and suppliers, affecting hundreds of thousands of products (Gunther, 2014, para. 3). Walmart is changing the way food is grown around the world, and is fueling a growing trend toward sustainability as a smart business strategy. Through its bold sustainability goals, they push healthier choices, support local growers, and curb agricultural pollution (Gunther, 2014, para. 4). Companies will always have a tension between consumption, growth, and sustainability. Walmart is moving as rapidly as possible to a circular model that is powered by renewable energy. It is the leading company in U.S. for total on-site solar capacity and installations (Lindsey, 2016, para. 7). As of 2016, 25 percent of Walmart’s entire operations are powered by renewable energy, with plans to double that number by 2020 (Lindsey, 2016, para. 7). Some view these sustainability efforts as more of a business choice that a concern over climate change; to these critics Walmart lets the numbers do the talking.

Infrastructure. Walmart focuses on efficient supply chain management and inventory management to manage its supply chain costs. It has made use of technology and apps to manage supply of material and inventory which also helps keeping costs low (Pratap, 2017, para. 2). Walmart and its strategic partnerships can adapt to change because of their approach to IT infrastructure (Praptap, 2017, para. 2). Walmart develops most of its IT solutions in house, and rarely ever uses competitor’s systems; this gives Walmart and its suppliers a sustained competitive advantage over its major competitors (Praptap, 2017, para. 3). They believe their information systems provide a competitive advantage over other industry players (Praptap, 2017, para. 3). They share this advantage of an in-house strategic system with suppliers. This offers a tight alignment between the company’s business strategy and the finished solution. Another advantage of in-house strategic system is the ability to keep proprietary business process and systems knowledge out of the hands of competitors (Praptap, 2017, para. 7). A third-party developer would have no problem advertising a system that was in use at Wal-Mart and then selling that system to competitors. Still the advantages of the in-house development approach should be weighed against the higher cost of development and the extra staffing required for new innovative development and on-going maintenance (Praptap, 2017, para. 8).

Walmart has grown significantly by incorporating numerous different types of information systems into their daily operations (Malone, 2012, para. 1). They have used several information systems throughout the course of its history such as: point of sale, satellite communications systems, data warehouses, retail link systems, and electronic data interchange (Malone, 2012, para. 1). Competitors recognize Walmart for their innovation when it comes to utilizing the latest technologies and information systems. Information systems structures and processes play a critical role in Walmart’s success and market profitability. They are excellent at incorporating supply chain management processing systems into their strategic partnership with suppliers (Malone, 2012, para. 2). One such implementation is the use of Radio Frequency Identification (RFID). RFID technology allows Walmart’s operations to send and receive real time data to their supply chain networks (Malone, 2012, para. 5). This makes it possible for Walmart to remain competitive in the retail industry by properly controlling its inventories. RFID technology has been available for a decade but even the retail giant had trouble reaching full implementation due to the high cost of compliance for suppliers (Lopez, 2017, para. 3). But with the rise of the cloud and fully-integrated platforms, the value of storing and monitoring product data on RFID tags has risen.

Systems. Walmart has created operational and technical systems to support the supply chain activities between them and suppliers. Suppliers seeking better integration between these systems need to develop a comprehensive enterprise strategy; this strategy is the direct connection between supplier integration efforts and the growth of their businesses (Bachman, 2016, para. 3). Smaller companies wishing to do business with Walmart have questioned the high costs of specific software acquisition and implementation. They argue the costs of annual license fees and the high costs of communication charges to transmit documents outweigh the benefits of having Walmart as a customer (Bachman, 2016, para. 4). Walmart agrees the implementation of EDI in a business can be a complex process (Bachman, 2016, para. 4). They recommend potential partners to undertake a cost benefit analysis to identify the best suited areas within their business for an EDI implementation; this analysis will explain which departments may be improved using EDI integration (Bachman, 2016, para. 4). Walmart sees the benefits of the nearly instantaneous data integration between companies as a strategic partnership requirement.

Training. Once a suppler establishes a strategic partnership with Walmart, extensive training sessions are then provided online or at quarterly conferences (Gereffi & Christian, 2009, p. 7). Suppliers learn how Walmart’s customers interact with their products; they begin working on market basket analysis to assign loyalty to their brand (Gereffi & Christian, 2009, p. 7). Identifying who is buying their products gives suppliers new potential to open new markets. Suppliers learn how to produce reports that compare performance metrics to each other which helps simplify POS information (Gereffi & Christian, 2009, p. 8) Simplifying POS reports aids manufacturers in forecasting consumer’s demand; Walmart uses this method to anticipate customer’s needs (Gereffi & Christian, 2009, p. 8). The discount retail giant will also introduce their vendor compliance strategy