Carol Spieckerman

Wal-Mart Gets Truckin'

May 24, 2010

FROM RETAILWIRE:
Among Wal-Mart's strengths has been an ability to find ways to drive costs out of the supply chain. Now, the company has decided that there are more supply chain savings to be had and all it has to do to make them happen is keep suppliers from making deliveries to its distribution centers. What do you think will be the effect of Wal-Mart taking over deliveries from manufacturers?      [more...]

Walmart is positioning this as allowing suppliers to focus on what they do best (manufacturing products); however, retailers' definition of what suppliers do best has shifted dramatically in a relatively short period of time and no two have the same point of view. Not that long ago, it was assumed that suppliers were better at marketing, manufacturing and sourcing; now, retailers are picking and choosing which suppliers will participate and where. In all fairness, though, Walmart is walking the talk internally as well. Last year, when John Fleming, Walmart's Chief Merchandising Officer outlined Walmart's phased sustainability index, he and defined the "merchant (buyer) of the future." Whereas the merchant of the past focused on products and how well they sold, the merchant of the future will be laser focused on "total product lifecycle management." To me, that means that buyers will have greater accountability to factor in everything from human rights to traceability, transportation and packaging usage when making supplier and product decisions.

If executed properly, price will be an outcome of this scrutiny so it won't have to be the primary consideration; however, one thing is for sure: buying decisions will not be based on superficial attributes going forward. Suppliers that look at Walmart's latest reach in isolation will be missing the point; it needs to be added to the growing list of supplier attributes that Walmart and others (they will follow) are considering.