News/Events

A new report co-written by WDI’s Scaling Impact Initiative that investigates Walmart’s efforts to incorporate small producers into its global supply chain was presented today at the 7th Annual Global Entrepreneurship Summit 2016. The summit, held in Silicon Valley, Calif., is one of the foremost gatherings of the world’s preeminent entrepreneurs and featured a keynote address by President Barack Obama.

“Incorporating Small Producers into Formal Retail Supply Chains” focuses on lessons learned by Walmart in its efforts to bring smallholder farmers and female artisans from developing countries into its retail infrastructure.

An earlier WDI study, which was turned into the teaching case “Walmart and USAID: The Evolution of a Global Cross-Sector Partnership,” examined Walmart’s attempts over the past 10 years to bring smallholder farmers into its agricultural supply chain in partnership with USAID.  Linda Scott, Emeritus DP World Chair for Entrepreneurship and Innovation at Saïd Business School at the University of Oxford, had previously looked at the retailer’s efforts to sell the handicrafts made by women-owned businesses through Walmart’s online consumer marketing.

For the report presented at the summit, the research team consisting of Ted London, vice president of the Scaling Impact Initiative, Colm Fay, research manager of the Scaling Impact Initiative, and Scott, interviewed key stakeholders, analyzed relevant data, and developed a set of strategies and frameworks based on Walmart’s experiences in Africa, Asia, and Latin America.

Walmart had mixed success in its efforts to engage with smallholder farmers and artisans, and was interested in understanding and sharing what had worked and what had not.

“They faced some real challenges and they wanted to share these with the broader community,” Fay said.

While difficult, success is possible. The report found that small producers could be integrated into the global supply chain of a large retailer. The key is understanding the current capabilities of the supplier, as well as key aspects of the product, market, and ecosystem in which the product operates.

In order for small producers to be successful, retailers, development organizations and local governments may need to partner and invest in things such as improved credit systems, transportation, and market information.

The paper identified four performance dimensions and 18 influencing factors that indicate whether a retailer could successfully engage with a small producer. A Sourcing Readiness Checklist provides an actionable approach for retailers to systematically assess whether their sourcing strategies are likely to have a positive impact.

London said the report should provide insights for other formal retailers who are already engaging with small producers or are considering it.

“We don’t just need to encourage retailers to engage with small producers, we need to help these retailers execute more effectively,” he said. “That’s the real goal and the focus of the report.”

London also said that a teaching case for WDI Publishing will be developed out of this latest project.

The report and checklist are available to download free on WDI’s website at: www.wdi.umich.edu/walmart.

Photo credit: Shankar S. on Flickr