Do You Know the Difference Between Strategic Sourcing & Category Management? Going the Last Mile!

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Those of us that are Supply Chain junkies have heard all the stories about Walmart.   Back in the day (and maybe even today) Walmart was notorious for their somewhat aggressive, even brutal Strategic Sourcing tactics.  They could and did “make” many Suppliers wealthy AND they could and did “break” many Suppliers and put them out of business.  They cared little about building Supplier relationships and more about squeezing every last nickel they could out of a Supplier contract AND every year asked for more.  They were revered as a Supply Chain success story by many and a failure by some.  Over the years, they have matured, as we all have, and have softened their approach but they are still a powerhouse by most standards are using their strengths and competitive advantage to take on Amazon, Fedex and the U.S. Postal Service.  I heard the story on NPR yesterday and smiled because I think their new offering is pure genius. 

Walmart new GoLocal is a white label last mile delivery services for other retailers.  Evidently the “last mile” of any delivery is the most arduous and complex.  Walmart has been building their own platform and capability over the last few years and now want to provide that service to other retailers thereby creating a new revenue stream.  According to an article in TechCrunch, “We’ve worked hard to develop a reliable last mile delivery program for our customers,” said Tom Ward, senior vice president, Last Mile, Walmart U.S., in a statement. “Now, we’re pleased to be able to use these capabilities to serve another set of customers – local merchants. Be it delivering goods from a local bakery to auto supplies from a national retailer, we’ve designed Walmart GoLocal to be customizable for merchants of all sizes and categories so they can focus on doing what they do best, leaving delivery speed and efficiency to us,” he added.   They plan to use their existing pool of gig workers (and perhaps add 000s more) and eventually Walmart employees to provide the service. 

While any retailer could use GoLocal, getting started requires some technical integration.   Walmart will provide an API that plugs into their existing commerce platform, which will ping GoLocal when customers place orders. This alerts GoLocal to dispatch the driver while Walmart captures delivery experience feedback.  This technical connection also gives Walmart access to local delivery data to analyze that could aid in improving its own delivery business or inform decisions about fulfillment center placement — a potential competitive advantage.  Since most retailers will not want Walmart garbed workers delivering their products, the Walmart name will be invisible. 

“This service is one of several initiatives Walmart now has underway to generate revenue by serving the needs of other retailers”.  Walmart is taking operational and digital investments that they have made for their own business and using them to develop new revenue streams.  I love to hear these stories, because as Sourcing / Supply Chain professionals, you have an opportunity to provide the same Value for your businesses.  The Sourcing  / Supply Chain organization is in the perfect position to identify internal functions that can be monetized and sold (sometimes even to your competition).  As you are moving toward Category Management (the Value Creating Level of Maturity), identifying new revenue streams should be part of your role as a strategic business partner AND  an internal consultant .  I ask you, “Are Going the Last Mile?” 

Let us know what you think and join in the conversation . . . . . . .

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Anne has been leading consulting and financial management organizations for over 25 years. She has extensive expertise in Strategic Sourcing, change management, contracting & contract management (both the buy side and sell side) organizational design and supply chain management. Anne has a passion for collaborating and educating her clients while helping them to uncover hidden value in their organizations. In addition, Anne has been named by Supply & Demand Chain Executive as a “Top 100 Provider Pro to Know” every year since 2007 and a 2013 Top Female Supply Chain executive.
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