The Walmart's Supply Chain Controversy

Business Logistic:
The Wal-Mart Supply Chain

Controversy
A New Era of Sustainability

UN Global Compact-Accenture CEO Study 2010
Must-have for the integration of sustainability into core business

Shape customer awareness, attitudes and needs towards sustainability
Generate new knowledge, skills and mindsets for sustainable development
Bring the value of sustainability in the supply chain to the investors
Create a clear and positive regulatory environment for sustainability
Sources: UN Global Compact-Accenture CEO Study 2010
Shape customer awareness, attitudes and needs

towards sustainability
Change in
Marketing Strategy
Providing
transparent
Information
Direct
communication
Developing a new corporate message supports current corporate

strategy of Wal-Mart
Old slogan: Always Low Prices Always
New slogan: Save money. Live Better.
Sustainability label - combining IT technology and desire of

customers to have greater transparent information of suppliers:
- Distance travelled
- History of product
Live demonstration of tips and suggestions about

environmentally friendly behaviour (Unilever/Asda Family
kitchen)
Sources: Dasgupta et al. 2009; Business action to influence consumer demand 2010; Lacy et al. 2010
Generate new knowledge, skills and mindsets

for sustainable development
Associates
&
Manager Training
Program
Supplier Training
Program
Business growth in a
profitable and
sustainable manner
Assistant Management Training (AMT)

The 12-week Manager in Training (MIT) program
Lifelong Learning Program
My Sustainability Plan Wal-Mart's global engagement
platform
Bharti Wal-Mart (established in 2010) carries out various training

programs for suppliers to ensure that all suppliers are well
integrated to Wal-Mart systems and policies.
Supplier Orientations: to ensure better supplier integration in
Wal-Mart system, policies and procedures
Orbit Training: to help take purchase order online and ensure
timely execution.
Vendor Meets: category specific vendor workshops.
Sources: Walmart website, careers.walmart.com/training-and-development, bharti-walmart.in/SupplierTrainingProgram
Bring the value of sustainability in the supply

chain to the investors
Communication
Strategy
To save both money and
resources in the whole
supply chain, Wal-Mart uses
existing technologies and
proven business practices.
Strategies:
Raising energy efficiency
(267,786 kWh less
energy; net sales
increased 15.2% to
$125.9 bn. for FY2012)
Making waste profitable
Developing sustainable
packaging
Better Image
Renewable energy
Zero waste
Sustainable products
Win-Win
Customer wins
Supplier wins
Wal-Mart wins
Wal-Mart will be able
to compete in the
market place in the
future.
Sources: Sustainability 2.0 Goals, www.walmartstores.com/Sustainability/8844; www.youtube.com/watch?v=_wcpHnsz1sE
Create a clear and positive regulatory

environment for sustainability
Wal-Mart Practices
Helps its suppliers to reduce energy use through partnership with

the Environmental Defense Fund, PricewaterhouseCoopers,
ClearCarbon, .etc
Has other partnerships with NGOs, but has agreed not to disclose
information about their identities
Voluntary
environmental and
social regulations
Institutions are weak in controlling and enforcement of existing

regulations
Corporations shall go beyond the existing regulations
Regulatory compliance between corporations and governments
Multi-organizational
Partnerships
Formed by businesses, cities, governments, and NGOs

Create the potential for industry-wide social and environmental
improvements in the developing countries
E.g. Round Table for Sustainable Palm Oil (Unilever, Migros,
Sainsbury's , the WWF, the Malaysian Palm Oil Association, and
103 another members)
Sources: Rabet 2009; Sturken 2010
Create a clear and positive regulatory environment for

sustainability
Solving sweatshops problem
Overall program of collective actions

Stop cost-cutting through using sweatshops to cut Wal-Marts super
profits
Invest additional funds to improve social standards for suppliers
Stimulate other companies to switch to fair purchasing prices
Establish permanent local commissions to set and control minimum
social standards
Sources: ZENITH Management Consulting, 2005.
Summary
1. Nowadays companies begin to face new challenges to integrate sustainability into their core
businesses.
2. State-of-the-art information technologies may provide transparent information to customers
concerning the sustainability issues.
3. New training programs are being created for associates and suppliers to involve them into
overall sustainability along the whole supply chain.
4. Investments in sustainability of the supply chain will benefit all the relevant parties in long
run.
5. In cooperation with other companies, NGOs and states Wal-Mart shall create strict
environmental and social regulations in the countries of its suppliers.
6. Overall program of collective actions as a solution to eliminate sweatshops.
References
Business action to influence consumer demand for low-carbon goods and services. Department for Business,
Innovation and Skills. (2010) PricewaterhouseCoopers.
Dasgupta, M., Southerton, D., Bows, A., McMeenkin, A., (2009). Consumer, Business and Climate Change,
Sustainable Consumption Institute, University of Manchester.
How to Exploit Wal-Mart's Weaknesses? (2005). Zenith management consulting case study. Available
through: http://www.docsfiles.com/pdf/1/how-to-exploit-wal-mart-s-weaknesses-summary-casestudy.html.
Lacy, P., Cooper, T., Hayward, R., Neuberger, L., (2010). A New Era of Sustainability, UN Global CompactAccenture CEO Study.
Rabet, D., (2009) The interplay of the foreign international corporations and the state in environmental
governance, University of Sydney, Government and International Relations.
Sturken, E., (2010) Why Walmarts Carbon Commitment can make such a difference. Retrieved June 10,
2012 (http://www.edf.org/news/).
Sustainability 2.0 Goals, www.walmartstores.com/Sustainability/8844,
www.youtube.com/watch?v=_wcpHnsz1sE.
Walmart website, careers.walmart.com/training-and-development, bhartiwalmart.in/SupplierTrainingProgram.
How to Exploit Wal-Marts Weaknesses. Case Study, (2005). Retrieved from: www.zenithconsulting.com/research/walMart/Wal-Mart-Strategy.pdf

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Business Logistic:

The Wal-Mart Supply Chain

A New Era of Sustainability

Must-have for the integration of sustainability into core business

Sources: UN Global Compact-Accenture CEO Study 2010

Shape customer awareness, attitudes and needs

Developing a new corporate message supports current corporate

Sustainability label - combining IT technology and desire of

Live demonstration of tips and suggestions about

Generate new knowledge, skills and mindsets

Assistant Management Training (AMT)

Bharti Wal-Mart (established in 2010) carries out various training

Sources: Walmart website, careers.walmart.com/training-and-development, bharti-walmart.in/SupplierTrainingProgram

Bring the value of sustainability in the supply

Sources: Sustainability 2.0 Goals, www.walmartstores.com/Sustainability/8844; www.youtube.com/watch?v=_wcpHnsz1sE

Create a clear and positive regulatory

Helps its suppliers to reduce energy use through partnership with

Institutions are weak in controlling and enforcement of existing

Formed by businesses, cities, governments, and NGOs

Sources: Rabet 2009; Sturken 2010

Create a clear and positive regulatory environment for

Overall program of collective actions

Sources: ZENITH Management Consulting, 2005.

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