Wednesday, September 4, 2013
"The Greening of Walmart's Supply Chain"
This week’s topic is about new product designs for operational effectiveness and planning demand and supply in a supply chain. The title of the interesting article I found is “ The Greening of Walmart’s Supply Chain…” by Erica Plambeck and Lyn Denend. Plambeck and Denend discuss Walmart’s initiative to develop environmental friendly processes in order to sustain the company. In 2005, Walmart’s initial goal was to: 1) be supplied 100 percent by renewable energy, 2) create zero waste and 3) sell products that sustain people and the environment. In efforts to achieve this goal,
(Plambeck & Denend, 2011)one example
would be that Walmart now pelletizes and sells the plastic waste to its
packaging supplier which added $28 million a year to their revenue as oppose to
adding $16 million to their costs. Walmart recognizes that the biggest
environmental impact is embedded in their supply chain and has begun some
initiatives to reduce their carbon imprint.
One initiative created by Walmart was the Sustainability Consortium. The sustainability consortium is a collaborative effort between manufacturers, retailers, NGOs and universities. The efforts are intended to gain a better understanding of the environmental and social impacts of the consumer products Walmart carries. One of the end goals with the information is to create a brand-label that spotlights the environmental impact of one brand versus the other brand.
An other tool Walmart has developed is a database that contains a list of 3,800 chemicals that are know to be harmful to the environment and to humans. The idea behind this tool is that suppliers will be alerted if any toxic chemicals are detected and find solutions to eliminate the chemicals.
In conclusion, Walmart is being proactive on identifying problematic areas in their supply chain, impacting the environment. Their sustainability strategy still has a ways to go since the company continues to expand everyday. If the company does not make changes quick enough, government policy may need to take over to make drastic changes in Walmart’s supply chain.
Do you think that Walmart could change their supply chain quickly enough before environmental policy penalties are implemented? Are countries willing to implement these policies to have a great enough impact to change Walmart's behavior?
Plambeck, E., & Denend, L. (2011). The Greening of Walmart's Supply Chain. Supply Chain Management Review , 17-23. http://faculty-gsb.stanford.edu/plambeck/Documents/SCM1109_Walmart.pdf