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One of the problems we had was how much of our fish was coming to us third-,
fourth-, or even fifth-hand. Sometimes our supplier turned out to be nothing more
than a packer that was going out to a market saying, ‘I need 50,000 pounds of
salmon no matter where it comes from.’ Through the chain of custody, we started
to see when fish was being handled four or five times, and we knew it couldn’t be
good for the fish [since the texture and flavor of fish is degraded over time,
especially through freezing and refreezing]. And it's certainly not good for
traceability. It brought us a lot more awareness about our supplier base, so now
things can come to us a lot more directly.
As Walmart gained greater visibility to its seafood supply chain, it could consolidate its business
with the best available suppliers. Through consolidation, the seafood network believed it could
eliminate seafood stock-outs and raw material shortages while reducing supplier costs through
standardized packaging, reduced paperwork, and improved transportation efficiencies. These
changes were estimated conservatively to result in $14 million in increased revenues and an
additional $4.3 million in profits per year.
The Role of Suppliers
Because Walmart had delegated the implementation of the MSC certification program to its
suppliers (as well as NGO partners), companies willing to take the lead in driving sustainability
into the supply-base stood to differentiate themselves from the competition and further
strengthen their relationships with the company. For example, Manish Kumar, CEO of the
Fishin’ Company, Walmart’s majority supplier of frozen fish fillets in the U.S., embraced the
program even though it added significantly more complexity, time, and effort to his job without Walmart’s Sustainability Strategy (A) OIT-71A p. 12 increasing near-term profits. “I had no idea what the MSC was in January,” he said. “Today, I
spend half my day, every day, working on something related to the Marine Stewardship
Kumar felt that his efforts were helping to secure and expand his business with Walmart in the...
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This note was uploaded on 01/14/2014 for the course LGST 210 taught by Professor Sep during the Winter '10 term at UPenn.
- Winter '10