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WALMART SUSTAINABILITY STRATEGY(INVENTORY MANAGEMENT IN SEAFOO

SUPPLY CHAIN

MANAS R

50

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INTRODUCTION

BY 200! WALMART WAS SOURCING APPRO"# $50 MILLION IN SEAFO

ANNUALLY

WALMART%S SEAFOOD BUSINESS WAS GROWING ROUGHLY 25& PER Y

WORLDS FISHERIES OUTPUT HAD DECLINED TO 3& OF THE YEAR'0

(ACCORDING TO PETER REDMOND)

PETER REDMOND! VP FOR SEAFOOD AND DELI! BELIEVED SEAFOOD S

CONTINUITY WAS THE SINGLE GREATEST LONG TERM ISSUE

WALMART ADOPTED SUSTAINABILITY STRATEGY IN 2005:

SUPPLIED BY 00& RENEWABLE ENERGY

0& WASTE

SELL PRODUCTS THAT SUSTAIN PEOPLE AND THE ENVIRONMENT

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MSC PROGRAM WAS STARTED BY UNILEVER AND WORLD WILDLIFE

PROVIDED CERTIFICATION STANDARDS BASED ON UN CODE OF CO

FOR RESPONSIBLE FISHING

MSC'ACCREDITED CERTIFYING AGENCIES AUDITED FISHERY AND P

COMPLIANCE TO ENSURE PRODUCTS WERE MANAGED SUSTAINABL*BOAT TO PLATE+

DIRECT COST OF CERTIFICATION RANGED FROM $50000 TO $5000

WAS PAID FOR BY BOAT OPERATORS OR PROCESSING PLANTS

ON AVERAGE! CERTIFICATION TOO, '2 YRS FOR COMPLETION

MARINE STEWARDSHIP COUNCIL

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WALMART AND MSC CERTIFICATIO

TO HELP ADDRESS SUSTAINABILITY ISSUE! WALMART STARTED WOWITH MSC

WALMART WANTED TO SELL 00& MSC CERTIFIED WILD'CAUGHT S

BY 20

WALMART STARTED TO PUSH SUPPLIERS TO INCREASE NUMBER OF

AND PROCESSING PLANTS TOWARDS MSC CERTIFICATION

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THE FISHIN% COMPANY

MAJORITY SUPPLIER OF FRO-EN FISH FILLETS TO WALMART

MANISH ,UMAR! CEO EMBRACED MSC PROGRAM EVEN THOUGH IT

COMPLE"ITY! TIME AND EFFORT WITHOUT INCREASING NEAR TERM

,UMAR FELT HIS EFFORTS WOULD SECURE AND E"PAND BUSINESS

WALMART IN THE LONG RUN

THE CASE DEALS WITH THE FISHIN% COMPANY%S SALMON SUPPLY C

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WILD PACIFIC SALMON SALMONS SPAWN IN FRESH WATER (NEAR SHORES) AND MIGRATE TO SALT W

SALMONS RETURN TO FRESH WATER TO SPAWN DURING MAY'SEPTEMBER

IN ALAS,A! WILD SALMON FISHING IS ALLOWED FOR A LIMITED SEASON UNDCERTAIN OPERATORS! BY NORTH PACIFIC FISHERY MANAGEMENT COUNCIL

THE LENGTH OF SEASON VARIED TO ENSURE A SUFFICIENT NUMBER RETURN

SEASON VARIED FROM A WEE, TO A COUPLE OF MONTHS

PRICES COULD FLUCTUATE BY 30& IN A SEASON

AVERAGE PRICE OF HEADED AND GUTTED WILD PIN, OR CHUM SALMON WAS$.POUND

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CURRENT PROCEDURE

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ALTERNATIVE

PROCESS FISH IN ALAS,A

EMPLOYEE WAGE' $2000

HIGHER PROCESSING COSTS DUE TO UNCERTAIN SUPPLY AND ONLY

SUPPLY PERIOD OF ALAS,AN SALMON

PROCESSING DELAYS IN PEA, SEASON CAUSING DEGRADED /UAL

TRANSPORT COSTS TO MAINLAND US

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FARMED SALMON FILLETS

FARMED FRO-EN SALMON FILLETS FROM CHILE

SALMON COST' $3#00.POUND(FILLET)

PROCESSING' $0#50.POUND

TRANSPORT COST FROM SOUTHERN CHILE TO US' $0#20.POUND

AVAILABLE YEAR'ROUND

,UMAR PURCHASED LARGE /UANTITIES FOR LOWER FREIGHT CHA

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ADDITIONAL COSTS (IN US)

PORT TO COLD STORAGE' $0#0.POUND

HANDLING CHARGE TO MOVE FISH TO WAREHOUSE' $0#0.POUND

HOLDING FEE' $0#05.POUND.MONTH

GROUND TRANSPORT FEE' $0#5.MONTH

FISHIN COMPANY ,EPT LARGE STOC, TO SUPPLY WALMART ON JUS

BASIS

FARMED SALMON WAS BOUGHT TO STORAGE (RATHER THAN DIREC

SENDING PARTIALLY FILLED TRUC,S TO WALMART) TO REDUCE GR

TRANSPORT CHARGES

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FISHIN COMPANY ADDITIONAL DAT

WILD SALMON SOLD' 5 MILLION POUNDS

RETAIL PRICE' $4#50.POUND

FARMED SALMON SOLD' 0 MILLION POUNDS

RETAIL PRICE' $#00.POUND

PRE TA" NET PROFIT FOR BOTH PRODUCTS' $0#05.POUND

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DISCUSSION

HOW SHOULD WALMART RATIONALI-SEAFOOD SUPPLY CHAIN TO REDU

COSTS AND PROMOTE SUSTAINABIL