4. WALMART'S GREEN SUPPLY CHAIN MANAGEMENT
Going Green Requirements
　Lee Scott took control of Wal-Mart in 2000 with a newly adopted strategy of making logistical process more economically friendly. "Green" logistics, at its core, means implementing a system that can independently monitor oversea suppliers to make sure they meet social and environmental standards. Though the push for becoming environmentally friendly is important, a global company like Wal-Mart must consider the transformation's effect on the bottom line. Lee Scott saw the two goals as intertwined: "being a good steward of the environment and being profitable are not mutually exclusive. They are one and the same" (MSNBC, 2005). Scott provided an example by calculating that improving fuel mileage efficiency in the trucking fleet by one mile per gallon would save moan than $52 million per year. The move toward sustainability also integrated corporate Social Responsibility (CSR) into Wal-Mart's business model. Ideally, this CSR policy would function as a built-in self-regulating mechanism where Wal-Mart could monitor and ensure their adherence to laws, ethical standards and international norms. This CSR policy would be a way for the company to embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere.
The Next Level
　Wal-Mart has attempted green initiatives before, but Scott's plan is different and has the potential for success based on many reasons. In the past, Wal-Mart dealt with environmental issues defensively rather than cooperatively, proactively, and as opportunities for profit. In 1989, in response to letters from customers about environmental concerns, the company launched a campaign to convince its suppliers to provide environmentally safe products in recyclable to biodegradable packaging. However, this large-scale effort was met with some skepticism from commentators who believed that it was intended to generate benefits for Wal-Mart at the expense of its suppliers. Nevertheless, the company did earn some goodwill among environmentalists as the first major retailer to speak out in favor of the environment. When vendors claimed they had made environmental improvements to products, Wal-Mart began promoting the products the green-colored shelf tags. It should be noted that although Wal-Mart promoted these products, the company did not actually measure or monitor the improvements. Regardless, the company sold as many as 300 products with green tags at one point. By the early 1990s, the green tag program disappeared altogether, and environmental issues slipped off the Wal-Mart’s list of strategic priorities.
　The new sustainability strategy needs to be deeply embedded in Wal-Mart’s operations and supply chain management to meet the ambitious goals set in 2005. In the words of Lee Scott, “We recognized early on that we had to look at the entire value chain. If we had focused on just our own operations, we would have limited ourselves to 10 percent of our effect on the environment and eliminated 90 percent of the opportunity that’s out there” (Plamback, 2007). Wal-Mart’s leadership must therefore evaluate the entire value chain as a means of implementing sustainability through distribution systems. Creating metrics for analysis is paramount to wal-Mart’s ability to monitor corporate operations and global suppliers 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 it’s 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
Conclusion
　 According to the 2009 Wal-Mart Sustainability Report, Lee Scott was quoted as saying, “The facet is sustainability at Wal-Mart isn’t a stand-alone issue that’s separate from or unrelated to our business. It’s not an abstract or philanthropic program. We don’t even see it as corporate social responsibility. Sustainability is built into our business. It’s completely aligned with our mode, our mission and our culture.” In this case study we have outlined the requirements needed to become a sustainable business, the reason why this initiative is different than others previously attempted by Wal-Mart, goals presented by management, the new value networks, and risks Wal- Mart need to address. They have already taken major steps including a “green” website where they give tips on how customers can go green and what they can do to reduce their environmental impact. Wal-Mart critics argue that the steady does of these initiatives is an effort to deflect attention from its work-place policies and its financial performance. They need to continue to invest in its environmental policies as well as address the issues facing their workforce in order to prove these initiatives are not just a public relations stunt. However, if Wal-Mart proves that it is serious about reducing environmental impact and devoted to investing in green initiatives, critics will have to unclench their fists for a round of applause. At least for a moment.
Questions: (25 %)
Source: Heying, A., Sanzero, W., (2009) A Case Study of Wal-Mart’s Green Supply Chain Management, Operations Management case of professor Jim Constand, the University of New Mexico.