Are You A Supply Chain Big Dog?

It's always good to see the mainstream business press pick-up on Spend Management issues. US News and World Report has a short piece in their June 19th issue that talks about how Wal-Mart is placing new demands on its suppliers (no surprise here). According to the article, "Coca-Cola sells a lot of Coke, and quickly. Its athletic drink, Powerade, doesn't do as well. So Wal-Mart says it wants the soft drink shipped directly to stores and the athletic drink shipped to warehouses. Sounds simple, right? It's part of a new push by Wal-Mart to cut $6.5 billion in inventory, and thus costs -- an effort that has already paid off with increased profits in the company's most recent quarter". The article makes Wal-Mart out to be a bullying "supply chain big dog" that likes to show its teeth when battling with suppliers, forcing them to meet new inventory and shipping demands. In the automotive industry, bullying behavior has made GM incredibly unpopular with its supply base (in contrast to Toyota, which also makes strong demands, but practices a collaborative supplier management approach, first and foremost). Perhaps Wal-Mart should learn to be more like Toyota and less like GM, letting its big dog bark speak more than its bite.

Jason Busch

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