Introduction
Resilience and sustainability are the key factors for the success of a company or an organization. Resilience is the ability of a company to survive change, while sustainability is the ability of an organization to continue with its roles without abating its value. Over time many companies and organizations have been established; however, some have risen to greater heights while others collapsed. Walmart has experienced growth and withstood the test of time since its establishment. It is vital to explore the factors that enable Walmart to develop at a time when its competitors risk closure.
Greening the Global Supply Chain
Greening the global supply chain is an initiative to promote a sustainable environment. A safe and healthy environment for growth means that companies consider the effects of their products on the people and the environment (Chen et al., 2019). Walmart has been in the frontline along with other companies championing sustainability; many companies and organizations have taken part in this collective process. Walmart began its efforts toward sustainability in 2005; Lee Scott, chief executive officer, established three main goals that were to guide the Company in it its journey to for a green global supply chain (Agrawal & Yücel, 2021). These three goals were; to transition to 100% renewable material, achieve zero waste operation, and produce materials that sustain both the environment and resources.
The Company has joined in the war against social issues that hinder sustainability, including poverty, poor waste disposal, climate change, unequal recruitment, corruption, and poor working conditions. The Company aims to reduce carbon dioxide emissions to the atmosphere by 2030. As of 2022, the Company had reduced CO2 emissions to 540million MT from 1 billion MT, which has been significant in averting the negative effects of climatic changes (Agrawal & Yücel, 2021). Furthermore, the Company has adopted recycled and biodegradable to reduce pollution and waste disposal. The Company has reduced plastic materials, which have been the leading causes of water pollution (Sheffi, 2015). The Company has seen that its tenders are only allocated to authentic and well-vetted companies. This ensures that the supply chain delivers quality and safe products to its clients.
The Company is aware that achieving a green and sustainable living on its own is impossible; as such, the Company has formed collaborations with other companies, non-governmental organizations, and supply chains in order to raise awareness of the proper and safer methods of food production (Chen et al., 2019). The Company has set standards for its suppliers to ensure they supply safe products and also aid clients in making informed decisions on the time of food they consume (Park & Li, 2021). Additionally, the Company also participates in philanthropic activities, all in the name of promoting green living. According to Sheffi, the supply chain has all the power to combat excessive carbon dioxide emissions effectively because they deal with the suppliers directly. Thus, if they set quality standards, the suppliers will have to follow them to remain in the market.
Environmental Supply Chain Innovation
Over the years, there have been many inventions that have, in different ways, influenced the supply chain. More so, their other innovations have promoted supply chain activities while, on the other hand, causing harm to the environment (Chen et al., 2019). These inventions have created innovative opportunities for the Company, thus promoting its growth (Park & Li, 2021). The Company has also developed some innovative ideas to increase efficiency, which has resulted in increased income. These innovations include solar panel shades, shopping list apps, textile production, sustainable electronics, sustainable networking, and certified seafood. In promoting sustainable energy production, Walmart has established solar panels as shades in its parking lots (Sheffi, 2015). This has been significantly profitable since the Company has been able to generate cheaper and clean energy, thus reducing its expenditure and increasing its returns. Furthermore, upon installation of these shades, the Company has witnessed an influx of customers since, unlike other outlets in Walmart; their cars will be shaded from the sun.
Additionally, the Company has seen soaring profits from the sale of seafood. A study was conducted, and it established that if the harvesting of seafood continued at the same rate, then there would be nothing to harvest in the next 50 years (Park & Li, 2021). Seafood has subsequently declined since then, so Walmart took the opportunity and partnered with the Marine Stewardship Council and established a program for producing seafood. This enabled the Company to make up to $750million from the sale of seafood (Park & Li, 2021). This was an opportunity since there was a wide shortage of the product. However, Walmart has to ensure that all the suppliers are certified because some are only concerned with the money and not the consumer’s health.
Production of organic cotton has resulted in immense pollution of the environment, as many such producers have opted for synthetic cotton, which is cheaper and safer for farmers and processors. Nonetheless, most customers prefer organic products and are willing to pay more for an organic product. Walmart thus took advantage of the opportunity and attached organic labels on these products (Park & Li, 2021). Customers paid more for the product because they believed it was authentic and not because it was safer for the environment. Most customers prefer organic products despite their hefty prices; as such, Walmart has seen to it that organic products are adequate and fit the taste of their clientele.
Environmental, Health, Performance in Strategic Sourcing
Strategic sourcing is the approach to how a company manages its supply chain in the process of gathering relevant information regarding the acquisition of products and other materials. It also factors in the goals and possible returns for the Company and its supply chain. In 2010 Walmart adopted a new strategy for its sourcing; through this strategy, the Company was able to save money (Park & Li, 2021). The Company eliminated intermediaries and changed its procurement procedures, which were the primary suppliers. Walmart seldom bought products directly from the suppliers. Therefore in the new strategy, the Company would acquire over 80%of its products from the manufacturers directly (Park & Li, 2021). The Company was able to eliminate markup fees for the intermediaries and thus saved the company billions of dollars.
The Company activated the new sourcing strategy by establishing main food and textile stores and began ordering fruits directly from global markets instead of using agents. This plan was enabled by the acquisition of Asda, which was already used to direct sourcing (Sahay et al., 2016). The strategy improved efficiency and increased profits for the Company, and above all, the Company was able to vet and ensure that the suppliers provided certified products (Park & Li, 2021). Walmart has since adopted many other strategies as supplements to the direct sourcing strategy, which was prompted by factors like; efficiency, environmental protection, and customer safety. These strategies have benefited the Company by creating entrepreneurial opportunities that helped Walmart generate even more income (Chen et al., 2019). For instance, in the case of strategic dealer partnership, the Company initiated social networks that ensured lower prices in exchange for long-term purchases, which amplified the Company’s profits. More so, the Company can guarantee the safety of its customers; this is through critical vetting and certification of the products.
Walmart has also adopted the cross-docking strategy; in this strategy, the Company does not use warehouses because the products are transported by trucks to the stores. Products are transferred from inbound trucks and put into the outbound trucks at the distribution stores. To achieve this, Walmart has acquired a fleet of trucks and hired even more (Sahay et al., 2016). This saves the Company on storage costs; however, this has resulted in increased exhaust gas emissions, resulting in climate change (Maamoun, 2020). Increased company operations have created an opportunity for the Company to adopt technology, which has helped keep track of the sales and help customers get everything they wish to buy. Walmart developed a shopping list app that helped clients to remember everything they needed (Park & Li, 2021). Additionally, it developed a tracking system that helped keep track of inventory to know the product that needed restocking.
Renewable Energy in Emerging Markets
In the past few years, campaigns for adopting green energy have taken everybody by storm as they have increased rampantly. As such, almost all organizations and companies have started shifting to renewable sources of energy (Maamoun, 2020). Consequently, Walmart has also invested in renewable sources of energy and aims to be a 100% renewable energy company by 2035 (Agrawal & Yücel, 2021). The Company is focused on ensuring that all its stores use energy. Initially, Walmart used over29000 gigawatt-hours per year with an estimated power bill of $ 1 billion annually (Agrawal & Yücel, 2021). Walmart entered a partnership with the ENGIE North America power company and was supplied with over 500 megawatts, making it the Company with the highest procurement for renewable energy in 2019 (Sheffi, 2015). To cut the cost of power while also protecting the environment, the Company has installed solar panels on its parking rooftops for the stores in California.
Walmart has also procured wind energy from the states of Texas, Oklahoma, and South Dakota; this will help reduce carbon dioxide emissions. As much as these projects will help combat environmental degradation, they have also created income for Walmart through its partnership with ENGIE North America (Agrawal & Yücel, 2021). Walmart saw the need for renewable energy as an opportunity and seized the chance. Using wind energy is cheaper than non-renewable sources; as such, the Company subsequently saves more money that would otherwise be used to service power bills. By 2019 the Company had increased its solar energy coverage by 35%; these efforts have been geared toward achieving its goal of 100% renewable energy (Agrawal & Yücel, 2021). The Company has identified an opportunity to supply renewable energy to other stores, which has increased its revenue.
Greening the Suppliers
Greening the supplies refer to the process of producing products that are environmentally friendly and have very little or no impact on the environment whatsoever. Many companies have joined the movement and begun producing environmentally friendly commodities to mitigate the effects of pollution (Simms, 2020). Walmart began its campaign for environmentally friendly products in 1989; the Company established its agenda to ward renewable energy and biodegradable packing material (Park & Li, 2021). However, the campaign got negative feedback from the public, but this did not stop management from launching the project in 2005 (Agrawal & Yücel, 2021). The CEO initiated the go green initiative and argued that profitability and environmental sustainability were the same, unlike other people’s beliefs.
Walmart established guidelines that were to be followed by its suppliers, for any company to supply Walmart with its products, it must meet the threshold. The products must be safe for consumption and harmless to the environment. Furthermore, the Company promotes green products by attaching labels, encouraging customers to purchase them (Chen et al., 2019). Greening supplies has created opportunities for the Company and suppliers who are determined to create a sustainable environment. For instance, people are more likely to pay higher for organic products, and thus the Company ensured most, if not all, the products in the stores were organic to increase its returns.
Reverse Logistics for Recycling
Reverse logistics is a form of supply chain management whereby the product returns from the buyer to the store and the supplier. The primary aim of this process is usually to regain the value of the commodity or for efficient disposal (Shokouhyar et al., 2021). Recently, return products have increased, and their worth is estimated to be in trillion dollars annually. Nonetheless, return goods are common for online purchases; they account for at least 30%, unlike in-store acquisitions, which are less than10% (Chen et al., 2019). Reverse logistics is essential in waste management; for instance, in Canada and the U.S, Walmart began the initiative of using retail trucks to collect wooden waste bags since pollution was becoming a concern due to excessive littering (Sheffi, 2015). The trucks then take the waste to a recycling station where the plastic pallets are recycled, and the wood is sawed to produce sawdust sold and used as animal bedding (Sahay et al., 2016). The recycling process plays a vital role in reducing pollution of the environment.
Management of the Unexpected
Companies are faced with unforeseen situations and scenarios that, if not dealt with appropriately, could collapse. as such, companies have employed professionals to deal with such issues. During the COVID-19 pandemic, many companies were caught unaware, and some of them resulted in closure (Sahay et al., 2016). Similarly, Walmart was unprepared for the pandemic; however, it adjusted rapidly to fit the prevailing conditions by increasing the number of associate cleaners and the frequency of cleaning the store. The Company installed thermal guns at every store’s entrance and adhered to CDC guidelines on using face masks and hand sanitizers. Furthermore, the Company ensured that all stores were sufficiently stocked to ensure all needs of the clients were met (Maamoun, 2020). When the situation became dire, the Company shifted to home delivery services for its customers to ensure they acquired everything they needed during the lockdown. The swift response to unprecedented situations has shielded it from challenges like bankruptcy and even closure.
Lifesaving Supply Chain and Disaster Management
A lifesaving supply chain refers to the commodities set aside as a reserve to save lives in case of a disaster. Disasters like earthquakes, storms, hurricanes, and pandemics can occur anywhere and anytime. One must stay prepared to manage the tragedies (Sheffi, 2015). Companies and other organizations have laid out plans and guidelines to follow if a disaster occurs (Maamoun, 2020). Walmart is no exception; it has strategies that ought to be followed when a disaster happens; for instance, the Company has taken part in helping civilians whom a tragedy has hit. Examples of such tragedies include; the 2021 U.S tornadoes, the KwaZulu riots in South Africa, and the COVID-19 pandemic (Chen et al., 2019). During the tornadoes, Walmart donated food, water, snacks, basic needs, gift cards, and baby food. The Company helped the government to provide relief aid for the victims through the Walmart Foundation.
Logistics and Humanitarian Aid
Logistics and humanitarian aid refer to the transportation of disaster victims to a safer place. It involves the movement of all people related to the disaster, including the victims, volunteers, causalities, and relief workers. Walmart and Walmart foundations have played significant roles in providing logistic and humanitarian aid to victims of disasters. Since 2016 the Company has spent approximately $132million on disaster management and preparedness (Sahay et al., 2016). The Company uses its trucks to send victims and causalities to safer grounds and transports volunteers and relief workers to attend to victims (Shokouhyar et al., 2021). Although these are usually somber moments, they also create opportunities for the Company, and this is by providing more customers for their stores and also a collection of waste materials for recycling. Walmart stores are all over the U.S, and mobile stores also make high sales during tragedies.
Information and Knowledge Management
Information management is the organization of data acquired from various sources, after which it is arranged and processed. Conversely, knowledge management is acquired through learning and the understanding of data. Management of information and knowledge is vital as it helps employees to remain focused and efficient as they understand the objectives of the organization’s objectives Walmart, information and knowledge management has been utilized significantly, is because it is vital in ensuring employee retention and maintaining the Company’s competitive benefit (Maamoun, 2020). Informed employees are important since they understand why and how they are expected to perform certain functions. More so, knowledgeable employees ensure customer satisfaction. The Company focuses on advancing technological knowledge, which fosters development and eventual profitability (Sheffi, 2015). Furthermore, knowledge enables the Company to have a competitive lead over its competitors while increasing the efficiency of the processes.
Conclusion
Walmart is among the largest companies in the U.S as it has grown tremendously since its inception. It has been on the frontline in the fight for a sustainable environment and reduced pollution. As such, the Company has implemented policies that steer it toward achieving its goals; for instance, it has cumulatively installed solar panels and entered into partnerships with companies producing renewable energy. More so, the Company has established mechanisms for reverse logistics to reduce pollution while promoting recycling and reusing waste material. The Company has also developed a welfare foundation that helps victims of disasters by providing food, drinks, and social amenities. Additionally, the Company has invested in information and knowledge management, which has significantly facilitated its growth by increasing profitability, customer service, and competitiveness.
References
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