Walmart supply chain efficiency

Walmart delivered 361 million more cases while driving 287 million fewer miles because of their supply chain efficiency in 2011.

REfficient, at our core, is to help companies be efficient and effective with resources – whether inventory, money or the environment. We see everyday how a smart solution, such as purchasing RE, can save significant money and help the environment through reuse and waste diversion.

But let’s look elsewhere. Take Walmart for example, a company that drove supply chain efficiency early on to offer lower prices to customers. While there has been criticism of the company due to “The Walmart Effect”, some of the company’s initiatives around efficiency and sustainability are worth noting due to their results. Their 2012 Global Responsibility Report details these results which include:

  • Walmart improved efficiency in its fleet by 69% in 2011 as compared to the baseline year of 2005. They did so by increasing pallets by trailer and better managing routes. Yet this also allowed them to deliver 361 million more cases while driving 287 million fewer miles.
  • Network efficiency avoided nearly 41,000 metric tons of CO2, which was the equivalent of taking 7900 cards off the road.

Besides transportation and supply chain efficiency, Walmart has made bold steps in the area of renewable energy and energy efficiency.

  • Walmart has 150 solar installations in seven countries, which delivers 71 million kilowatt hours of energy annually to their facilities. This is enough to take 9,600 vehicles off the road for a year.
  • In California alone, 75% of their facilities will use some form of renewable energy by the end of 2012.
  • Electricity represents the second-highest operating expense at the majority of their stores and clubs. In 2005, Walmart discovered a game changer with the installation of LED freezer case lighting, which reduced energy consumption by 70%. LED freezer case lighting has since become the industry standard. Walmart has adapted the technology to other areas, such as parking lot lights and sales floor lighting.

Walmart’s goal is to reduce their greenhouse gas emissions by 20% by 2020. The company says that these efforts are good for the environment, but also good for their bottom line. Ultimately, these initiatives keep costs low for their customers.

There are other benefits as well. Walmart’s initiatives are also a great source of marketing for the company. Walmart won over 70 significant environmental awards around the world in 2010. This is great recognition for their efforts and also a great source of marketing and PR for the company.

If the business case did not exist for sustainability and efficiency, we would likely not see the same devotion and uptake by a company like Walmart. After all, Walmart is the world’s third largest corporation and the biggest employer globally. The numbers for efficiency and sustainability have to make sense.

And Walmart is showing they clearly do, regardless of how the company is viewed.