Sustainability and the Green Supply Chain of Wal-Mart company
It is the wish of every individual who starts a business to succeed in it, and get the best outcome ever from what he/she started. Though this has been the wish of many, the issue of sustaining the business becomes a challenge and others or left with no option but to renounce the world of business. Facts about sustainability in supply chain management are gaining attention in both Academic, industrial practices as well as literature as an area of prospect. For such reasons, companies across geographic and industrial boundaries are implementing sustainable initiatives in the supply chain in response to pressure which they are getting from consumers, investors, regions of operation and even from the employees1.
According to Melnyk, Davis (2010), the stated that supply chains are obliged to be designed and managed to convey certain outcomes-sustainability being one of these outcomes which are mostly driven by customers’ needs. This paper seeks to look at Sustainability and the Green Supply Chain, issues related to the modern business world – where technology, globalization and environmental concerns play a critical role in shaping business processes by looking at wal-mart Company
For every company, the way to sustainability begins with supply chain. For one to be able to get what is meant by supply chain, it is fundamental to know what is meant by the same. Although there are different definitions of the same, a supply chain can simply be defined as a material, information and services, typically crossing several different organizations that are involved in producing and delivering a product or serves and an end user. On the other hand, supply chain management is a total systems approach to managing the entire flow of information, materials, and services from raw-materials suppliers through factories and warehouse to the end customer.
Wal-mart Company is a company that has exemplified the better meaning of Sustainability and the Green Supply Chain. The paper will have a look at Wal-mart Company and evaluate the market channels and logical framework, models and theories among other numerous factors that have led to the success of the company and remaining competitive and suitable to the globally changing market environment.
The greening of wal-mart’s supply chain could be traced back in 2005, after the companies CEO, Lee Scott publicized that the company was launching a new business sustainability strategy designed to accomplish three sweeping environmental goals which were to be supplied 100 percent by renewable energy to create zero waste. This shows that Wal-mart Company was well versed with the environmental factors affecting the supply chain all over the world as they were selling products that sustained people as well sustaining the environment. For Walmart Company to achieve the fundamental goals, paramount changes were to be put in place for the company to be able to manage its supply chain.
For any company to succeed, suitable network values network of stakeholders including the non-governmental organizations (NGOs), eco-friendly competitors, policy makers, academics and suppliers are vital organs that leads to success. These are also some of the tactics that the Wal-Mart company implemented to remain vital in the market as well remaining the giants in the globally competitive business. These methods helped the company to scrutinize the environment performance, extends supply chain, suggest improvement, and help implement new ways of working.
There are several ways of that companies could do to adopt green and the Wal-mart companies had eight key practices to help them adopt to “green” its supply chain.
The practices included the:
- Certifying environmental sustainable products.
- Licensing environmental innovation.
- Cutting the buyer role
- Committing to larger volumes of environmentally sustainable products
- Restructuring the buyer role
- Providing network partner assistance to suppliers
- Cutting out the middleman
- Identifying goals, metrics, and new technologies.
It has been noted that the above practices created substantial business value for the Wal-mart company, creating substantial business value for the company. To start with, they led to cost reduction, notably through improved energy efficiency. Introduction of new sources of revenue that is, the company spent over $ 16 million a year to haul plastics waste from its stores to landfills; it now pelletizes and sells the plastic to its packaging suppliers that end up to $ 28 million a year to its bottom line.
The other thing that the wal-mart company did was providing assurance of supply. For instance, when the Chinese government threatened to close several textile dye houses to reduce pollution before the 2008 Beijing Olympics, Wal-mart Company regained their trust as they involved non-governmental organizations NGO to be their partners who helped them in supplying their products, winning the clients trusts and becoming more environmental –friendly while going on with their process.
Policy makers are other factors that contributed to Wal-Mart turning green. This was as well contribute by public relations which enabled the company secure permission to open new stores and increase sales in its existing locations and more so to other countries, something that has made it possible for them to be stiff if the global world.1
According to Chandran, 2003, Wal-mart Company has had a tremendous growth of the last 20 years. The company being a retailer of goods ranging from food to technology has managed to be embedded in the lives of many American and numerous more people in the world since they have managed to reach other countries and more so China.
Wal-mart innovation in its supply-chain has been one of the cited reasons for its success. It is evident that management system as well the company’s leadership can be attributed to its efficient and well- structured supply chain management. As stated by Chandran, 2003, he stated that Wal-Mart supply chain management was the best as they moved the right items to the précised customers, at the right time and by the right most perfect means making it the best company if the tough global competitive markets.
Several strategies were put in place to make things work perfectly in Wal-Mark Company. As a business profession they introduced a system which was known as three-day barrier in their supply chain. This system made it possible for retailers to replenish or update the inventories within three day time. This was made possible since incase they were not able to replace the items; they would rose clients something that they fought with all their means possible.
Technology has also contributed a lot in the success to Wal-Mart Company. This is because the system for Wal-mart Company changed and become more efficient due to the use of technology. Technology helped the company to manage its supply chain management by breaking the undefeatable three-day barrier and made it possible for things to be communicated within seconds. This contributed a lot since the quicker the message was sent to the central warehouse of Wal-Mart giving an order of what might be needed in the store, as the message is also communicated to even the suppliers of law material, making it possible to meet its demands and therefore making the company remains more competitive in the market.
The invention in the Wal-mart inventory system made the company to be a leading retailer and this not only happened to be in the united states but globally since the company had a better name or over the world. The company’s ability to integrate information technology tools to its distribution system made it possible to its success hence becoming one of the successful businesses in the world for a long period of time.2
An example of Wal-Mart organizational structure
The structure as well the supply chain management has contributed to ultimate goals, for the company to improve the profit, maximizing efficiency and adapting to any changes that may came their ways. Being flexible to such things has made the company succeed and remain a prominent structure in the market.
When one talks of Wal-Mart organizational structure, it is evident to say that the structure is a formal composition of the task as well the reporting relationship that permits the corporation to control, coordinate and on the other hand motivate its connections as one interconnected unit to ensure a common goal is achieved. It is fundamental for organization structures to send the message of unity in the company hence portraying the necessary relationships.
As shown in the diagram above, it is quest evident that the structure has the senior president who oversees everything in the company. The structure has played a major role by pulling the components of Wal-Mart Company into one structured outline to portray the necessary relationship that helped them achieve the highest level of outcomes in the market.
The dynamics and key processes of marketing channels in Wal-Mart Company played a vital role to its success. In this case, the company not only depended on the market locally but as well internationally. China is one of the markets where Wal-Mart sends their products though they are located in United States. The structure from the top persons who are the senior presidents to the retailers who reach the consumers is well managed and everyone in the organizational structure understand the role that he/she plays something that has contributed to the success of Wal-Mart coma pony.
If one has to tell what is meant by marketing channels, it can simply be termed as the thing that happens behind the scene and it’s not noted by the consumer. In the case of Wal-Mart Company, sacrifices were made to make sure that the marketing of the company is well done since the company was spending even of $16 millions to make sure that this is done. The money was as well used to make sure that the company was in a position to sustain the supply of its products to all the consumers within the shortest time possible, making the supply of the green Chain in Wal-Mart Company to be more reliable hence winning customers trust in the globe, something that contributed to their success in the market.
The other factors that have contributed to the success of Mal-Mart is the mode of marketing strategies. In this case, expanding E-commerce has been one of their mode of marketing, among other factors like growing of power to distributors more so retailers in marketing channels, the need to reduce the distribution costs among other has resulted to the success of Wal-Mart company. In explosion of information technology and E-commerce, this has made it easier for producers and consumers to connect with no middle men and therefore makes it possible to interact globally and on the other hand disinter mediate the middle men from marketing channels. Shifting from old ways of doing things to modern that is the use of internet in marketing their products has contributed a lot to the success of Wal-Mart, something that has made the sustainable in the market and becoming sustainable in the green market.2
The other key process of marketing Wal-Mart Company is the ability to have a competitive edge that could not be copied easily by others in the market. Their promotions strategies as well their prices have become a challenge to other companies, something that has made the company the colossal in the market. With regards to product strategy, rapid technology transfer from one company to another and global competition have made it easier for companies to copy what they do but of the other hand, it has become a difficult thing to sustain and this has busted them as the company is capable to sustain hence remain in the market.
The growing power of distributors is another strategic marketing channel that contributed to the success of Wal-Mart Company. It has been noted that over the past two decades, economic cclout has shifted from the producer of goods to the distributors of goods. The shift in economic power has been noticeable at the retail level of the marketing channels more so where the giants in the market (Wal-Mart), becoming the dominant players by getting control of the marketplaces.
Other ways of their success is by getting use of the term channels managers. In this case, the company has several channel managers all over the world that aid them in marketing their products. This strategy has become successful and not applicable by other companies since it much expensive. Wal-Mart Company has many way of advertising the company through channels, but on the other hand, there are limitations of the same. In this case, even if the channels have worked and get the company into a better position in the market, there are still some weaknesses of the same strengths. For instance, the huge amount of money that is used to advertise could be used in other ways or eve paying for the raw materials.
The other weakness is that incase the channels managers are not familiar with the market or become careless, the company incur a great loss since skipping a step that is used to make the company stable and competitive could lead to immense losses and this can end up diminishing a company. E-commerce mode of marketing and selling of products have resulted in eliminating the intermediate man and this result to diminishing to some people hence a weakness that is brought by technology. Although we must accept change and move towards success, it is also vital for the company’s managers to come up with strategies that will value the company as well not diminishing every middle man since job opportunities are minimal globally.3
In conclusion, sustainability and the green supply chain has become a challenge to many companies but on the other hand some companies has succeeded as well. It is therefore fundamental for other companies to adapt Wal-Mart way of marketing their products, use their organization structure and by doing that they will as well become vital and recognized in the market hence be able to sustain themselves in the competitive market just lie Wal-Mart Company.