Walmart's supply chains and their management
INTRODUCTION
Sustainability management is a strategic approach used by organisations to integrate social, economic and environmental consideration within the operations and process of decision making (De Vass et al, 2021). It aims on the environment preservation and ensures the achievement of ethical responsibility and long term business objectives and viability of the organisation. Sustainability management is a structured approach of the combination of sustainability with the organisation’s objectives and management. It involves the production practices and consumption to ease the overall impact on organisation and facilitates the optimum conservation of resources (Vadakkepatt et al, 2021). The foremost objective of management of sustainability is based on effective global economy management and aims to secure the sustainable organisation’s future. It is a constructive approach, facilitates sustainable future of the organisation by cutting down the additional costs of fuel and energy resources and through enhancing the optimum utilisation of resources (Frei et al, 2020). Moreover, the management of sustainability acknowledges the organisation about the significance of adopting sustainable practices to ensure development and long-term business growth.
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This report is based on the Walmart Inc., one of the top global retailers and established as world’s most valuable and renowned brand, operates its business in estimated 24 countries by way of Walmart Stores, discount centres, supermarkets, warehouses and membership clubs (Walmart, 2024). Headquarter of Walmart is situated at Bentonville, Arkansas, The United States. In addition, the organisation operates approximate 10,500 stores and various websites and platforms of E-commerce in different global countries. In 2023, the overall profitability of Walmart was recorded at estimate 648 billion dollars across world (Statista, 2024). It offers multiple variety of retail products, includes dairy and fresh produced products, grocery items, toys, apparel, electronics and home appliances, furnishing items and many more. The Sustainability objectives of Walmart focus on driving strategic positive impact within the supply chain management at global level. The sustainability practices of Walmart focus on the preservation of nature, climate, people and waste in the management of supply chain to maximise the competitive strength of the business and within communities in achievable ways (Walmart, 2024).
However, the organisation currently faces several challenges related to management of supply chain in sustainable manner along with the reference to its ambitious goals to minimize the adverse impact on environment (Chowdhury and Quaddus, 2021). This report examines the key operational area of concern based on the management of supply chain within the organisation and highlights the significant issues related to unsustainable practices and its adverse impact in the brand image and business values. In addition, this report evaluates the strategic business practices of Walmart with the identification of alternate business practices within the management of sustainable or green supply chain. At last, the recommendations are provided to improve the key sustainability issues within the supply chain and propose a series of practical recommendations to the retail sector emphasises on the adoption of digital technologies and appropriate strategies to improve its sustainable supply chain performance.
Concerned Areas
Walmart, one of the largest global retailers, has embraces digital capabilities and sustainability practices in its commitment and business values and objectives (Walmart, 2024). It also focuses on the conservation of environment, climate, and aims to preserves the nature from the pollution and adverse impact of release of harmful gases during the production and manufacturing of products. The business value is associated with reduction of adverse impact of business activities on nature with the adoption and promotion of sustainable practices in its business operations (Sanders, 2020). However, the organization faces multiple challenges within the key concerned are of managing Green or sustainable supply chain within the organization. Issues related to the unethical sourcing, increased carbon footprints, quality of the product, deforestation, excess disposal of waste and emission of greenhouse gas are the major issues faced within the concerned area of sustainable management of supply chain (Trivellas et al, 2020). The organization faces the unethical practices within the SCM, includes degradation of environment with the emission of greenhouse gases, with the increased use of transportation vehicles, results in increased pollution.
Furthermore, Unethical practices emerge as a key concerned area in the sustainability management within the supply chain (Sánchez-Flores et.al 2021). Improper disposal of waste and increased pollution is another example of unethical practice of supply chain, has an adverse impact on the brand value and goodwill, leads to failure in comply with the CSR practices related to the protection of environment. An unethical chain of supply further contributes to the increased use of natural resources due to release of excess waste and contributes to the challenges related to pollution and deforestation (Shashi et al, 2020). Walmart is also alleged with the lack of transparency within the green supply chain, emerges as a concerned area of issue. This leads to arise complexities for the stakeholders and consumers in related to identify the key information about the product and its sourcing. The shady practices of unethical supply chain practices related to the non-disclosure of information related to carbon footprints, release of harmful gases or greenhouse gases and waste disposal results in lack of transparency among its stakeholders and consumers (Mondol, 2021). This has a significant negative impact on the brand value due to which stakeholders and consumers lost their interest within the organization. This negatively impacts the CSR practices, reduces the competitiveness and minimizes the efficiency of operations and revenue turnover of the company.
(Source: Walmart, 2024)
The transportation and energy sectors are emerged as the most concerned area of sustainable supply chain as these sectors are considered as the global polluters (Park and Li, 2021). Walmart faced challenges based on the increased consumption of energy resources to maintain its supply chain operations leads to arise issues of climate change, affordability and increased emission of pollutants. The objective of sustainability practices aims to increased implementation of renewable sources of energy for effective management of supply chain operations. It was resulted that Walmart reported an increased in emission of greenhouse gases with a rate of 14% (Shenavar, 2024). However, the increased consumption often results in rapid consumption of energy resources, results in failure of effective maintenance green supply chain within the organization emerges as a concerned issue. Walmart is termed as the multinational retailer, with a market share of 12.67% and has remarkable $572 billion sales within the global retail sector (Frei et al, 2020). On Contrary, for maintenance of SCM operations in smooth and effective manner, the retail sector organization heavily relies on the logistic sector for the fulfillment of the requirements and demands of the customers.
As a result, the excessive use of fossil fuels in equipment and vehicles leads to high emission of polluted gas, enhances carbon footprints and substantial depletion of resources (Esmaeilian et al, 2020). Additionally, waste generation and overconsumption of resources emerge as the inherent or concerned issues of the logistic sector within the supply chain industry. Apart from that, material used in the packaging also contributes to the degradation of environment, leads to non-compliance with the CSR practices of the organization. This has a negative impact on the competitiveness and brand image, results in decreased efficiency, profitability and overall performance of the supply chain management. Another concerned area within the management of SCM is associated with oversupply challenges (Chowdhury and Quaddus, 2021). In August, 2022, Walmart was alleged for the excess oversupply and inventory issues, resulted in reach of $1.5 billion, which is 15% more than the normal level of inventory managed by the supply chain. It arises due to lack of alignment among the performance of overall supply chain and the sustainability goals (Shenavar, 2024). Issue related to oversupply of products has an adverse impact on the financial performance of the organization due to increase in the cost of storage and transportation, high maintenance and excess waste.
Business Practice’s Evaluation
To overcome the Issues based on the management of sustainable supply chain performance, Walmart could adopt different business practices to overcome the relevant areas of concerns. The sustainable management of supply chain becomes complex in the current time among which the advanced technology can assists the organisation for the strategic operations of supply chain management. Furthermore, De Vass et al, (2021) mentioned that in the advanced technological world, digitalisation is considered as one of the best business practises could be adopted to manage the concerned issue of oversupply of retail products and transparency issues. The business practise of Digitalization strategically aligns with the sustainable supply chain as it promotes accuracy in inventory management, improves the performance and efficiency of the SCM and minimizes the operation cost. As per the view of Vadakkepatt et al, (2021) it also minimizes the probability of missed sales and declines the requirement of physical inventory.
In addition, digitalisation is associated with the use of big data and advanced digital technologies for the business transformation and to enhance competitiveness and business value. Frei et al, (2020) critically acclaimed that with the application of advanced technologies in the green SCM; it could enhance its efficiency and transparency and increases the resilience of supply chain. Digitalization could assist the SCM to accomplish the organisation’s triple line concept, based on the economic, social and environmental performance. However, Chowdhury and Quaddus, (2021) argued that adoption of digitalization as a business practise could impose risks and challenges related to the privacy, cyber security, digital divide and ethical challenges. Therefore, the sustainable supply chain could focuses on the adoption of strategic and holistic approach of advanced digitalization by balancing the threats and opportunities. Trivellas et al, (2020) critically acclaimed that it should be strategically aligned with the digital actions and goals with organisation’s values and vision of sustainability.
Another alternate business practice of recycling could be adopted by the organisation to address the concerned issue of excessive supply chain waste. According to the view point of Sanders, (2020) recycling focuses on the conservation of natural resources with their optimum utilization, results in reduction of waste. Furthermore, it reduces the emission of harmful gases and pollutants by way of sustainable sourcing of SCM products to ensure the recycling concept. Sánchez-Flores et.al (2021) critically contended that the business practise of recycling is not effective as compare to the other business practises as it possess burden on the organisation to sustainable source its products. This affects the quality and longevity of the products, leads to increase customer retention and reduces profitability and brand image (Shashi et al, 2020). Another alternate business practise is related to the implementation of procurement policies of sustainability as it facilitates strategic assistance to the organisation in terms of creating sustainable choices.
(Source: Walmart, 2024)
Mondol, (2021) evaluated that the procurement policy could be adopted by the Walmart as an alternate business practises, encourages organisation to avoid plastic, increases the use of recycled materials, aims to encourage about the opting of natural and local resources. Furthermore, business practises related to the ethical consideration could be adapted to facilitate fair and equal treatment to their workers. Park and Li, (2021) analyses that this practises also includes in the CSR practises of the organisation which provides the set of clear rules and guidelines to facilitate smooth and streamlines operations of business and aims to avoid the unfair, unsustainable and unethical practices. To adhere the procurement policies, the concerned issues based on the sustainable supply chain could be effectively addressed. However, Esmaeilian et al, (2020) contradicted that the compliance of sustainable procurement policies becomes complex for the organisation due to lack of guidance and controllable measures.
In addition to this, Walmart could adopt the increased collaboration within its business practice to enhance sustainability within the operations of SCM. For example: manufacturers could implement standards of human rights and ethical practices for their dealers and distributors. As per the view of De Vass et al, (2021) this results in increasing trust among the customers and minimizes the chances of regulatory risks which reveal the organisation’s commitment towards ethical practices and sustainability within supply chain management. Furthermore, the adoption of collaboration as an alternative business practice leads to encourage ethical behaviour within the dealers, suppliers and distributors and furthermore, improves the transparency between different stakeholders and consumers of the organisation. Vadakkepatt et al, (2021) contended that the alternative business practice of collaboration required high time and efforts of the organisation, has a negative impact on the time efficiency and results in increases complexities within the sustainable supply chain management (Chowdhury and Quaddus, 2021).
Recommendation and Conclusion
- It has been recommended to Walmart that with strategic coordination and collaboration with the digitalized supply chain, it could enhance its contribution and manages effective performance within green supply chain. To address the concerned area of resources utilization and inefficient supply chain operations, it could enhance its digital capacity with the installation of satellite system and AI to maximise the effectiveness and overall performance among sustainable chain of supply (Trivellas et al, 2020).
- It has been suggested that the organization can adopt the technological advancement of blockchain within the supply chain, aims to forecast the demand of consumers. This leads the organization to gain useful insights and facilitates better understanding the consumer needs. This will provide the target outcome based on minimizing the excessive supply of products, results in reduction of overall supply chain costs and reduces the production of waste (Sanders, 2020). Suggested KPI to measure the success is the waste rate of supply chain and total inventory level.
- Walmart could address the concerned environmental issue related to sustainable supply chain with the adoption of electronic trucks and other vehicles. This results in increasing social responsibility, enhances economic value and aims to reduces the adverse impact on environment (Mondol, 2021). Proposed KPI to measure the success is the increased rate of economic value of the organization and reduction in cost of supply chain operations.
- It has been recommended that Walmart could adopt the digitalization strategy with application of Artificial Intelligence within the chain of supply. It assists organization to monitor and effective control on the utilization of resources and energy. This helps the Walmart to address the potential issue related to energy consumption and further provides the benefit of reduced carbon footprints within the supply chain operations (Park and Li, 2021). Suggested KPI is increased rate of transparency, On-Time Delivery (ETAs) and order accuracy.
The above report concluded about the sustainable supply chain issue of Walmart Inc., a global retailer deals with diverse range of retail products and services. The business objectives are related with the management of sustainable practises within the organisation. Furthermore, the business value of Walmart aims to promote and conserve the nature, climate, environment and resources to minimize the negative impact of organisation on communities and nature. There are multiple key concerned areas within the supply chain among which the organisation faces complexities in their effective management. the concerned areas of sustainable supply chain includes unethical souring, unfair supply chain practises, deforestation and excessive waste generated from the supply chain, furthermore, increased emission of greenhouse gases and release of other harmful pollutants has an adverse impact on the brand’s image, communities and negatively affects the profitability of the organisation. To address the concerned areas of sustainable supply chain, Walmart could adopt the alternative business practises of digitalization, increased collaboration and procurement policies to enhance sustainability within the chain of supply.
REFERENCES
Books and Journals
Chowdhury, M.M.H. and Quaddus, M.A., 2021. Supply chain sustainability practices and governance for mitigating sustainability risk and improving market performance: A dynamic capability perspective. Journal of Cleaner Production, 278, p.123521.
Dai, J., Xie, L. and Chu, Z., 2021. Developing sustainable supply chain management: The interplay of institutional pressures and sustainability capabilities. Sustainable Production and Consumption, 28, pp.254-268.
De Vass, T., Shee, H. and Miah, S., 2021. IoT in supply chain management: Opportunities and challenges for businesses in early industry 4.0 context. Operations and Supply Chain Management: An International Journal, 14(2), pp.148-161.
Esmaeilian, B., Sarkis, J., Lewis, K. and Behdad, S., 2020. Blockchain for the future of sustainable supply chain management in Industry 4.0. Resources, conservation and recycling, 163, p.105064.
Frei, R., Jack, L. and Krzyzaniak, S.A., 2020. Sustainable reverse supply chains and circular economy in multichannel retail returns. Business Strategy and the Environment, 29(5), pp.1925-1940.
Mondol, E.P., 2021. The impact of block chain and smart inventory system on supply chain performance at retail industry. International Journal of Computations, Information and Manufacturing (IJCIM), 1(1).
Park, A. and Li, H., 2021. The effect of blockchain technology on supply chain sustainability performances. Sustainability, 13(4), p.1726.
Sánchez-Flores, R.B., Cruz-Sotelo, S.E., Ojeda-Benitez, S. and Ramírez-Barreto, M.E., 2020. Sustainable supply chain management—A literature review on emerging economies. Sustainability, 12(17), p.6972.
Sanders, N.R., 2020. Supply chain management: A global perspective. John Wiley & Sons.
Shashi, Centobelli, P., Cerchione, R. and Ertz, M., 2020. Managing supply chain resilience to pursue business and environmental strategies. Business strategy and the environment, 29(3), pp.1215-1246.
Trivellas, P., Malindretos, G. and Reklitis, P., 2020. Implications of green logistics management on sustainable business and supply chain performance: evidence from a survey in the greek agri-food sector. Sustainability, 12(24), p.10515.
Vadakkepatt, G.G., Winterich, K.P., Mittal, V., Zinn, W., Beitelspacher, L., Aloysius, J., Ginger, J. and Reilman, J., 2021. Sustainable retailing. Journal of Retailing, 97(1), pp.62-80.
Online
Shenavar, E., (2024). Strategies for Managing Sustainable and Digitally Enhanced Supply Chains: A Case Study of Walmart's Green Supply Chain Management. Online. Available through: <https://www.linkedin.com/pulse/strategies-managing-sustainable-digitally-enhanced-supply-shenavar-ylkce#:~:text=However%2C%20Walmart%20faces%20several%20challenges,and%20external%20factors%20such%20as>.
Statista, (2024). Revenue of Walmart worldwide from fiscal year 2012 to 2024(in billion U.S. dollars). Online. Available through: <https://www.statista.com/statistics/555334/total-revenue-of-walmart-worldwide/>.
Walmart, (2024). About Us. Online. Available through: <https://corporate.walmart.com/about>.
Walmart, (2024). Sustainability. Online. Available through: <https://corporate.walmart.com/purpose/sustainability#:~:text=Our%20vision%20at%20Walmart%20is,sustainably%20use%20our%20natural%20resources>.
4 Years | PhD
