Working from the Inside outFri, 09/01/2017 - 15:38
The challenge of implementing growth plans in Mexico is that the country simply has huge potential to fulfill, according to Miguel Cavazza, Vice President of Logistics and Distribution of Walmart de México y Centroamérica. This opens the field up to many plans suggested in-house but not all are suitable for such a large region.
Cavazza is from Argentina, which has the smallest number of Walmart stores worldwide — 108 compared to the challenge that 2,300 Mexican stores present. Walmart is the biggest private company in Mexico and has targeted US$1.3 billion for logistics infrastructure over the next 10 years to support its commercial strategy and total enterprise benefits. This represents 1 percent of the US$127 billion in direct investment in Mexico registered in the four years to 2016.
Walmart’s investment will create 10,000 new direct jobs, to be added to the 192,434 jobs the business already generates in 471 cities in Mexico. The retailer spent 2015 boosting productivity. In 2016, it implemented a threeyear growth plan that its main logistics service named Backhaul. In Mexico, this logistics solution facilitates merchandise transfers from facilities to distribution centers and verifies effective delivery.
Backhaul moves dry and perishable goods for all parts of the supply chain, avoiding trips with empty trucks by moving products from other companies. This saves on transportation for Walmart’s suppliers and contributes to sustainability efforts. “We handle more than 30 percent of Unilever transportation through Walmart, for example. The collaboration and integration of supply chain transportation will continue looking to become more efficient every time. We want to improve the quality of life for Mexican families by saving them money,” says Cavazza.
The Backhaul service is a win-win for many companies. The 3,300 daily trips made by the store’s fleet require efficient routes, so satellite tracking is used to improve planning and save fuel. “Satellite tracking allows us to be more efficient, to share our economic productivity. It also guarantees a closer relationship with vendors and suppliers, fuller loads and sound product scheduling,” says Cavazza.
One key to Walmart’s improvements is the technology used to track units. The company initiated a significant investment in various systems in the second half of 2015. It has invested in servers such TMS and GLS and in a computer system that Walmart uses at an international level to operate its distribution centers.
Looking forward, Cavazza has considered boosting the eco-friendliness of Walmart’s vehicles, electric or hybrid trucks. This would require large investments from automotive companies, however, and the sustainability of such an option is questionable, he says. The company continues to evaluate the idea, considering expectations for the future of transportation, as well as cost-savings should fuel prices rise again.
With 2,300 stores across Mexico, the company has a long reach and its logistics are demanding. “The regional dispersion that we handle with multiformat stores is huge. Our logistics network is the largest in the country,” Cavazza says.
To continue growing in the domestic market Cavazza expects to be even more efficient in transportation, to improve relationships with vendors and suppliers and to become the most honest, transparent logistics service in the market, working from the inside out.