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Thursday, September 02, 2010
Thursday, September 02, 2010
Latest Procurement News
Posted: Monday, January 04, 2010, 9:21AM
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KNOWLEDGE MANAGEMENT TAGS
"Supply Chain Management"
Supply chain consolidation could save Walmart $12bn
2010 will see Walmart begin a programme designed to slash billions of dollars from its global supply chain by consolidating purchasing across its international operations.According to the Financial Times, the effort will centre on increasing the proportion of goods that the retail giant buys directly from manufacturers, rather than through third-party procurement companies or suppliers.
Eduardo Castro-Wright, the head of Walmart's US stores, told the FT that the retailer views the consolidation of global sourcing as "a major source of leverage for the company in years to come".
Castro-Wright has predicts that the transition to direct purchasing could cut costs by 5-15 per cent across the firm's global supply chain within five years. This equates to potential savings of $4bn-$12bn should the company succeed in making 80 per cent of purchases directly.
As part of its effort to combine purchasing for the 15 countries in which it operates, Walmart has established four global merchandising centres for general goods and clothing, including a centre in Mexico City focused on emerging markets, and a centre in the UK to serve its George brand, according to the FT.
"It is also shifting to direct purchasing of its fresh fruit and vegetables on a global basis, rather than working through supplier companies. By the end of the year, the retailer plans to be directly purchasing sheets and towels for its stores in the US, Canada and Mexico, as well as its clothing for its Faded Glory line and for licensed Disney character clothing," the FT stated.
Procurement Tags - Supply Chain Management, Walmart
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