Wal-Mart has made a strong commitment to build a more sustainable global supply chain, starting with China. In 2008, Wal-Mart placed environmental requirements on its Chinese suppliers (source). Recently, Wal-Mart announced that it will fund research to develop sustainable businesses in China, and work with suppliers to “increase the standards of its sourcing and product design” (source).
Following a broad cost leadership strategy has already made Wal-Mart’s operations around the world largely successful. Why does having a sustainable supply chain matter?
Supply chain management is critical to a business’ success, especially for ones operating on a global scale like Wal-Mart. Common supply chain challenges are cost control, risk management and supplier relationships, which can really affect the bottom line (source). Now, supply chain sustainability has become a competitive advantage. China faces ever-mounting criticism for its harmful environmental and social practices so building a more sustainable chain first in China is a smart step. I can see many benefits from this strategy. Wal-Mart will be able to generate new sources of revenue from innovating to create “greener” products. Increasing energy efficiency, and working with suppliers to cut down wastes will reduce costs. Wal-Mart’s business model and operations will be improved, allowing for better risk management. Brand value and shareholder trust will increase. Ultimately, a sustainable supply chain will continue Wal-Mart’s success in the global market.
Offical Press Release and Video from Wal-Mart:
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