The Greening of Walmart’s Supply Chain…Revisited

This is an excerpt of the original article. It was written for the September-October 2011 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2011

Volatility has always been a factor in supply chain management. It just seems that the level of volatility we’ve been experiencing recently has been higher—and certainly a lot more persistent—than anything we’ve experienced in quite a while. Those boring good old days of relative stability have been supplanted by economic turmoil and wild stock market swings; by monumental natural disasters like earthquakes, hurricanes, and tornados; by political upheavals around the globe; and by suppliers cutting way back on capacity or in some cases simply going out of business. These are among the major contributors to that sense of volatility that seems…

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Walmart made headlines in 2005 when its CEO, Lee Scott, announced that the company was launching a new business sustainability strategy designed to meet three sweeping environmental goals: to be supplied 100 percent by renewable energy; to create zero waste; and to sell products that sustain people and the environment. Achievement of these goals would require fundamental change in how Walmart managed its supply chain.

To guide that change, Walmart convened “Sustainable Value Networks” of stakeholders, including non-governmental organizations (NGOs), policy makers, eco-friendly competitors, academics, and suppliers. These SVNs, which are organized to align with the company’s overarching sustainability goals, have evolved over time. Their goal was to scrutinize the environmental performance of the company’s extended supply chain, suggest improvements, and help implement new ways of working.

In an article for Supply Chain Management Review (see “The Greening of Walmart’s Supply Chain,” July/August 2007), we outlined these eight key practices that Walmart adopted to “green” its supply chain:

1. Identifying goals, metrics, and new technologies.
2. Certifying environmentally sustainable products.
3. Providing network partner assistance to suppliers.
4. Committing to larger volumes of environmentally sustainable products.
5. Cutting out the middleman.
6. Restructuring the buyer role
7. Consolidating direct suppliers.
8. Licensing environmental innovations.

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