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Unit 8: Supply Chain Management

is paramount to Wal-Mart’s ability to monitor corporate operations and global suppliers Notes
to be able to support their real efforts for improvement with substantial data.

Ambitious Goals
In late 2005, Wal-Mart President and CEO Lee Scott gave his first presentation broadcast to
over 1.5 million employees in over 6,000 stores and each of its suppliers. He laid out a
detailed summary regarding Wal-Mart’s new sustainability initiative to make a positive
impact and greatly reduce the impact of Wal-Mart on the environment in order to become
the “most competitive and innovative company in the world” (Plambeck, 2007). In his
speech, Lee Scott laid out three very ambitious goals in which he vowed Wal-Mart would:

1. Be supplied 100 percent by renewable energy in the very near future
2. Create zero waste
3. Sell products that sustain Wal-Mart’s resources and the environment
Clearly, Wal-Mart is trying to differentiate itself in an area where it was once considered
a laggard. Even some of the harshest Wal-Mart critics have started to agree that the company
has begun to make good on its promises. Obviously, these goals can seem overly ambitious
to most, but they should not seem inconceivable considering Wal-Mart’s past success with
seemingly unreachable goals.

The three goals were just an introduction to Mr. Scott’s speech. He also discussed the
following goals:
1. Increase fuel efficiency in Wal-Mart’s truck fleet by 25 percent over three years and
doubling it within 10 years.
2. Reduce greenhouse gases by 20 percent in 7 years.
3. Reduce energy use at stores by 30 percent in 7 years.

4. Cut solid waste from U.S. stores and Sam’s Clubs by 25 percent in three years.
5. Buying diesel-electric and refrigerated trucks with a power unit that could keep
cargo cold without the engine running, saving nearly $75 million in fuel costs and
eliminating an estimated 400,000 tons of CO pollution in one year alone.
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6. Making a five-year verbal commitment to buy only organically grown cotton from
farmers, and to buy alternate crops those farmers need to grow between cotton
harvests. Last year, the company became the world’s largest buyer of organic cotton.
7. Promising by 2011 to only carry seafood certified wild by the Marine Stewardship
Council, a group dedicated to preventing the depletion of ocean life from overfishing.
8. Buying (and selling) 12 weeks’ worth of Restrictions on Hazardous Substances
(RoHS)- compliant computers from Toshiba.
Although this may seem like a very large list for a company to accomplish, each of these
are attainable and place Wal-Mart in a great competitive position for the future.

Sustainable Value Networks
While Wal-Mart is building value added networks of government agencies, non-profits,
employees and suppliers to “green” its supply chains, the company is using a network
approach to lower overall carbon and environmental footprint in order to increase
profitability while increasing margins. For years Wal-Mart has been narrowly focused on
operations and supply chains, growth, and profits. Recently, Wal-Mart reached out to

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