Supply chain management: Wal-Mart invests in logistics

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The other day, I wrote a column about the lessons supply chain professionals can learn from the recent volcano in Iceland.

A news announcement from Walmart Stores the other day got me thinking about what we can learn from the world’s largest retailer. The answer, by the way, is that investments in your supply chain count, even in a down economy. They might count even more in a down economy.

Walmart is, after all, the world’s largest retailer and the largest employer in the United States. That said, much of the news about Walmart lately has been negative. For awhile, retail analysts thought that affluent consumers who were holding their noses while looking for bargains in Walmart’s aisles had made a permanent shift. Turns out, that may not be the case. Walmart’s sales have disappointed of late as those more affluent shoppers return to Target and the blue collar worker who is Walmart’s bread and butter remains under stress thanks to higher gas prices and continued layoffs. Walmart is now looking to the overseas markets for its future growth.

But that doesn’t mean Walmart is tucking tail and running for the hills. In fact, Walmart, which has always prided itself on having the leanest and meanest supply chain in the business, continues to look at its warehouse and transportation operations to stay on top. Along with the usual commercials touting Walmart’s low prices, Walmart has been running television ads featuring truckers who talk about the role they play in helping consumers save money. Can you think of another retailer that uses its supply chain to attract customers?

But what really caught my eye was an announcement last week from Walmart about a new Lifelong Learning Program. In partnership with American Public University, an online university, Walmart will invest up to $50 million over the next three years to provide tuition assistance to associates who want to earn college credit. The point of the program, according to the New York Times (Walmart did not return our calls), is “to help employees get more education and to build a better work force.” Classes will be offered “in areas like retail management and logistics.”

What does it tell you when a company that uses its supply chain as a competitive advantage decides to invest up to $50 million during the worst economic downturn in the last 80 years to build a better work force and improve its logistics?


About the Author

Bob Trebilcock
Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

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Improving Packaging: The Cost of Shipping Air is Going Up
Retailers and manufacturers that insist on using inefficient and sloppy packaging methods—oversized boxes, inefficient packaging, poorly constructed palletized contents—are paying for their mistakes in sharply higher freight rates. Pitt Ohio White Paper, Logistics White Paper, Dimensional Packaging
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From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
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