In the wake of recent miscues, Wal-Mart is setting strict new policies continuing its sustainability push with its Asian suppliers, with a goal of driving the need to return defective merchandise “virtually out of existence” by 2012.  A key element of the new program is the requirement that suppliers of goods to Wal-Mart identify each factory where the products are made, allowing Wal-Mart to track and inspect those factories more easily.

Could be some pretty significant supply chain implications here:

• Supply chain visibility down through multiple levels is going to be key (into inventory in particular). This is going to make an already complex supply chain even more so.
• Collaboration and coordination between Walmart and its suppliers becomes more critical than ever
• Supply chain risk mitigation strategies will be key: With increased inspections and quality thresholds, presumably (at least initially) there will be more incidents discovered.  What if a factory is inspected and a product line has to be shut down or the entire factory needs to close temporarily, what’s the impact on the supply chain, what are the alternatives, how quickly can they react). 
• Responsiveness to unplanned supply chain disruptions will make or break Wal-Marts’ continuing performance in the midst of these stricter policies.

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Tags: Supply chain risk management, Supply chain visibility
Posted in Supply chain risk management
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