The Parable of Walmart, Target Stores and Vertical Farming

We’ve all heard that it takes a long time to turn a battleship.  However, some of the largest most complex supply chains – like those at Walmart, Target Stores, Hasbro Toys and others – are seemingly able to pivot on a dime in response to external pressures on supply lines.  Case in point, the Wall Street Journal reports that these three giants (among others) have reshaped their logistics plans to avoid US West Coast-bound ocean routes (and the subsequent OTR and rail routes) due to recent labor-dispute-driven disruptions at ports in Long Beach and Oakland.  How do these behemoth entities make such significant changes so easily and what can we learn from their example?

It is a given that organizations operating at the levels of market leaders like Walmart and Target are using supply chain logistics IT solutions to help them manage millions of inbound and outbound shipments every year.  There simply would be no way they could operate with them.  In fact, these companies are known for being the model of supply chain efficiency and they owe a degree of this acclaim to the powerful software solutions they use.

From ERP systems, to transportation management systems (TMS), Warehouse Management Systems (WMS) to Yard Management Systems (YMS) to freight and route optimizers and network design systems, every inch of their supply chains is fully visible and controlled.  And this is not just because these retail leaders understand the benefits in terms of cost savings, efficiency improvements, customer service and competitive advantage unlocked by these technologies.  It is also because they’re fully aware of the fact that conditions change at the speed of life and, although these are the metaphorical battleships, they simply cannot afford to take months (or even weeks) to correct course when the inevitable external pressures arise.

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“It is difficult to predict when circumstance and trends will propel wholesale shifts in how business is done.   When they do, the organizations with the tools, processes and practices in place to adapt quickly will be the ones that survive and thrive.  Those unable to adapt, just as in nature, will most certainly perish.”

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Take for example the fascinating early-stage innovation taking place in the agriculture industry.  A number of factors including drought, urban planning and evolving social perspectives on healthy diet are contributing to the development of so-called “vertical farming”.  The practice of vertical farming accomplishes the goal of localizing the production of agriculture by converting disused former manufacturing buildings and warehouses, deep inside blighted urban areas into state of the art indoor farms.  Read about one such project currently under development in a post-industrial section of Newark, NJ.

The effect of localizing agricultural production on existing shipping practices could be significant if the timely trend achieves critical mass and takes off across the country.  This is precisely the type of disruption to existing norms that could conceivably catch shippers off guard.  In this case, food shippers would be faced with a radically different distribution scheme than the current practice of shipping produce from California, Florida and Mexico.  Adapting to the changes such a paradigm shift would surely produce is a critical ability in order to ensure survival.  Is such a shift truly imminent with respect to agricultural production?  Perhaps.  It is difficult to predict when circumstance and trends will propel wholesale shifts in how business is done.  Regardless, we do know these shifts happen.  When they do, the organizations with the tools, processes and practices in place to adapt quickly –like market leaders Walmart and Target – will be the ones that survive and thrive.  Those unable to adapt, just as in nature, will most certainly perish.  How nimble is your supply chain logistics program?

 

 

2 thoughts on “The Parable of Walmart, Target Stores and Vertical Farming”

  • In addition to vertical farming, another disruptor in ” growing local movement”, is a company called Freight Farms, who re-purposes shipping containers into space to grow leafy vegetables, herbs, etc.
    Shippers and carriers need to be aware of trends like these and impact on their supply chains and business models.

  • What a cool idea Joe! It does seem as though there are some significant paradigm-changing activities afoot in the production of food globally. Those prepared to be flexible will be the ones that thrive as the changes roll out wholesale!

    Thanks for your comment!

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