Wednesday, November 2, 2011

Hitting the Wal?

Giant retailer finding difficulties in taking over its suppliers’ logistics.

Wal-Mart has had to make adjustments since moving to take control of inbound logistics from its suppliers 18 months ago. The biggest of the “big box” retailers decided they would handle delivering the boxes to their stores, too.

In mid-2010, the company greatly expanded their program to take over deliveries of inbound freight traditionally controlled by their vendors under prepaid freight terms, shifting to increased use of freight-collect terms and sending shock waves through the transportation industry. Now, Wal-Mart concedes, they have had to back off in some cases, reported the Journal of Commerce.

“We’ve learned a lot,” said Greg Forbis, the retailer’s senior director, inbound general merchandise transportation. Wal-Mart said it has learned to treat each supplier uniquely, and when to let vendors run their own transportation. Wal-Mart has had to realize that “every supplier is unique and there’s not one cookie-cutter format that fits everything,” Forbis said this month at the annual conference of the Council of Supply Chain Management Professionals.

While looking at some suppliers’ supply chains “kind of makes you scratch your head,” he said, some other vendors had efficient transportation operations that Wal-Mart was hard-pressed to improve. “One of the key learnings was that we weren’t as good as they were in some cases,” Forbis said.

Where vendor operations were not efficient, he said, it was often because they had not been considered as a whole and subjected to professional analysis. “In a lot of cases it’s because they’ve bought companies over time and really haven’t had a chance to re-engineer their networks.”

So, almost everyone’s supply chain could benefit from a review, perhaps starting with a Logistics Report Card™ from TOTALogistix. The question is, do you want to control it, or have an 800-lb. gorilla do it for you?

Kirk Shearer
800-989-0054 x103

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