Wisdom Engine

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The current difficulty in implementing such a system is again tied to the lack of standardisation. At present, while Cui, Gaur, and Liu (2020) demonstrate how companies are investing a significant amount in blockchain technology to increase the visibility and reliability of supply chain applications, they equally note how there are challenges in creating partnerships with companies that are offering competing solutions or using different blockchain technologies. Metka (1990) notes how multiple competing versions of a network protocol existed at the beginning of the 1990s. It was many years before the widespread adoption of the Internet Protocol led to increased network effects. At the time, many lenders and manufacturers would hold off implementing network-based systems or outsource them because of the risk associated with implementing technology that would quickly be obsolete. Similarly, many firms in the supply chain industry are waiting for a standard to be implemented across blockchain and distributed databases that will enable them to seamlessly integrate with other firms in a manner analogous to the deployment of standardised shipping containers.

The supply chain process incorporates a range of entities and processes across the entire fabrication and distribution system, including factories, suppliers, and customers. It integrates the entire movement of systems from raw materials through to the manufacturing of parts to the delivery of those parts and the manufacturer of the final process, that is distributed through retailers to fulfil customer orders for products. Stewart (1997) defined a model for this process, known as the supply‐chain operations reference (SCOR) model. Models such as the SCOR model then led to the development of computer-assisted supply chain configuration such as the methodologies promoted by Huang, Sheoran, and Keskar (2005). While such models have demonstrated potential to revolutionise the supply chain industry, the fragmented nature of the various solutions and the lack of security have hampered adoption (Hall, Algiers, & Levitt, 2018). Nevertheless, the authors note that both vertical and horizontal integration improves the adoption of supply chain innovations.

The promise of standardised communications that integrate secure GPS-, IoT- and IIoT-, and 5G-based communications will require the development of interoperable standards and their deployment across multiple vendors. While it may initially seem difficult, the long-term benefits mirror the creation of interoperable standards across the internet. Supply chain members need to push for interoperable standards that work across multiple industries. For instance, the growth of Web 2.0 applications occurred when standardised applications could be integrated with a process known as a mash-up (Anjomshoaa et al., 2009; Krishnan, 2019). Guinard et al. (2009) demonstrated early on how this form of integration could create a “Web of Things”. Such integration would benefit global logistics and enable the integration of supply chain management, purchasing, accounting, and sales applications to reduce cost and risk and increase profitability.

Gutiérrez, van Meesnijk, and Arrowsmith (2012) researched and presented the development of more secure supply chains, focusing on developing better shipping containers. Even given the security problems and the risks associated with shipping containers (p. 3-4), the benefits presented by a standardised product demonstrate the gains achieved when a network effect is developed (p. 4). As the authors note, a combination of improved material science and miniaturised sensors fundamentally changes shipping containers, resulting in improved security and tamperproof transport. While the authors note that hybrid glass-carbon fibre panels would allow radar-transparent structures to be built (p. 4), that can be monitored to reduce people smuggling and other illicit activities, the introduction of microsensors and IIoT could achieve such results at a far lower cost.

Qureshi and Abdullah (2013) demonstrated how intelligent transport systems could reduce operating expenses and reduce transport delays in global logistics. Subsequent research (Im, Shin, & Jeong, 2018) has demonstrated that unmanned autonomous shipping operations could become part of the distributed IoT architecture. Aslam, Michaelides, and Herodotou (2020) have referred to such developments as the Internet of ship (IoS) paradigm and note that open challenges including security and privacy need to be considered fully for it to be realised. Yet, with the adoption of more secure systems based on blockchain and cryptographic technologies, peer-to-peer systems operating across a distributed network will securely implement such systems—using resilient systems that are not based on traditional centralised models (Hammi et al., 2018).

As Walmart navigates the complexities and uncertainties inherent in the global retail sector, strategic planning and the adroit application of cutting-edge technologies like blockchain and artificial intelligence (AI) can help mitigate risks and maintain operational efficiency. Blockchain technology emphasises transparency, traceability, and security and allows Walmart to manage risks associated with counterfeit goods, supply chain disruptions, and supplier compliance (Ahram et al., 2017). Blockchain’s immutable, decentralized ledger system ensures the authenticity of goods, tracks their journey through the supply chain, and records supplier adherence to agreed-upon standards and contracts. This level of visibility and accountability aids in managing uncertainties related to quality and delivery while also fostering trust between Walmart, its suppliers, and its customers.

While the logistics and maritime industries are, in theory, the oldest industries focused on the development of solutions and systems for coordination by the International Standards Organisation (ISO) technical committee (Thomas & O’Malley, 2021, p. 34), many newer technologies have not been integrated into the process, and IoT-based solutions remain outside the control of the system. Given that the maritime electronic standards have been deployed for over a century and the integration of common standards for radio, radar, and shipping containers has proved so lucrative across the industry, it would be in the interest of global groups such as the United Nations (UN) to promote an integrated supply chain solution and set of standards.

Chen et al. (2014) noted the importance of standardisation, and discussed the difficulties with integrating legacy applications and securing technologies based on early RFID implementations. Here, the privacy and security challenges are paramount. The requirements for IoT solutions in any industry, including supply chain management, are primarily based on low-cost, secure systems. Suppose secure systems such as the blockchain are not correctly implemented. In that case, the difficulty will be ensuring energy sustainability (p. 357) in such systems, so they may be run at low power-consumption levels. For such systems to be successful, simplified blockchain-based distributed control systems that leave verification to external nodes must be created and implemented in a standardised manner.

Qian, Härdle, and Chen (2020) studied industry interdependencies and the related network effects. In their analysis, the authors note that while it is difficult to precisely model interconnecting network structures amongst industries, dense, widely distributed systems can produce significant economic value. For instance, the development of standardised shipping containers increased the productivity of the initial suppliers that integrated such systems, leading to increased profitability (Kaluza et al., 2010), which in turn led to widespread adoption amongst other shipping companies. Finally, Ham and Johnston (2007) use a case study approach to document the integration of multiple systems and demonstrate how intra-industry supply chain management can be improved using distributed sensors and IoT-based monitoring.

The development of integrated and standardised systems has presented a challenge for as long as technology has existed. Still, over time, the gains through the network effect generally lead to the development of a dominant technology such as in the form of the Internet Protocol (IP), VHS, wireless standards, and other technology paths that enable widespread interconnectivity. Xiaohong, Jinlong, and Shuanping (2021) argue that evolutionary models may be used to represent the outcomes of supply chain and logistics standardisation. Yet, while demonstrating that a single technology platform will become a dominant standard, such an approach fails to address the issue concerning which particular platform will become most widely deployed.

Winkelhaus and Grosse (2020) argue that the development of logistic systems should mirror Industry 4.0 and seek to integrate within a wider range of structures. Of note, simple technologies such as RFID can be integrated using IoT bridges to create highly integrated smart factories (p. 20) that may be directly integrated with retail and logistic systems. In defining what the authors note to be Logistics 4.0, it is argued that the deployment of IoT systems will lead to new paradigms of mass customisation (p. 20), improved logistics processes, and the creation of objects that go beyond simple identification towards the integration of complex device-based identity (p. 25).

Combining blockchain and AI can create a robust risk management framework for Walmart (Kashem et al., 2023). Blockchain provides a trustworthy record of transactions and movements across the supply chain, while AI analyses this data to predict potential risks and offer strategic recommendations. This fusion safeguards Walmart’s procurement and supply management activities and ensures a consistent supply of goods, meeting customer needs and expectations. Effectively managing uncertainties through these advanced technologies reinforces Walmart’s competitive position in the retail sector, enabling it to deliver superior customer value and maintain operational excellence, even in the face of changing market dynamics and unforeseen disruptions (Deiva Ganesh & Kalpana, 2022).

Standards organisations such as the ITU, IEC, ISO, and IMO have been instrumental in developing telecommunications and electronic system standards that have promoted the adoption of shipping and logistics technologies (Thomas & O’Malley, 2021, pp. 35-36). The ITU, for instance, was founded in 1865 and later integrated into the United Nations (UN) to standardise telecommunications protocols. Developing globally distributed systems that are enforced through national regulations will create a widespread uptake in global logistics systems that are linked to IoT technologies. Yet, the problem stems from the rapid change occurring within such industries and the current lack of integration within technologies, including 5G.

Additionally, many firms have looked to the integration of technologies often referred to as ‘private blockchains’ (Cook & Zealand, 2018), not understanding that such systems are neither interoperable nor robust nor secure. Mistry et al. (2020, p. 2) note how the majority of existing IoT solutions are derived using centralised infrastructure with traditional client/server cloud structures. The difficulty derives from the single point of failure that this creates, which can “topple the entire system” (p. 2). Similarly, the authors note that the lack of trust between the entities engaged in exchanging transactions and commercial records limits the distribution range.

To mitigate the potential impacts of these uncertainties, Walmart could deploy various strategies that not only leverage its existing capacities but also embrace cutting-edge technologies such as blockchain (Tan et al., 2018). At the core of these strategies is establishing a diversified supply base and logistics network, offering Walmart flexibility in the face of geopolitical disruptions. By sourcing from multiple regions, Walmart can hedge against changes in trade policies or sanctions that disproportionately impact certain regions. Similarly, in response to environmental crises, a diversified logistics network can ensure alternative supply routes, thereby maintaining the flow of goods.

IoT and IIoT systems can be implemented to run over decentralised peer-to-peer architecture using advanced 5G-based network technologies (Mistry et al., 2020, p. 3). When linked to a single public blockchain, the ability to integrate simple authentication methodologies or even allow network nodes to validate transactions creates a methodology that can reduce the power consumption and computational overhead associated with such devices in integrating advanced cryptographic technologies. Yet, as the authors further note (p. 4), the lack of standards and regulations concerning both 5G and blockchain technologies has led to undesirable consequences and fragmentation.

The lack of regulation and standardisation in the global supply chain industry, and the fragmentation of industry bodies, have slowed the deployment of standardised systems (Thomas & O’Malley, 2021). The lack of systems in shipping operations alone has led to large-scale losses and even the injury and death of crew members (p. 33-45). In addition, the global logistics industry has failed to integrate standards even across the shipping industry, relying on trade secrets (p. 33)—in place of global standards that can increase efficiency and provide remote monitoring and maintenance even on larger vessels.

The integration of simple systems in IoT- and IIoT-based supply chain management can lead to many security and reliability problems if not done well. The standard systems used within sensor-based distribution, for instance, have not been created with much security or reliability in mind. Yet, integrating blockchain-based technologies into IoT-based systems may create a more resilient and secure system. In particular, integrating both agents and distributed hash table (DHT) databases linked and monitored for integrity against a blockchain network can lead to a more resilient and secure system (Wright & Savanah, 2021).

AI offers unparalleled opportunities to map the movement of goods and services, making the supply chain more transparent and efficient (Deiva Ganesh & Kalpana, 2022). Suppliers using AI can use predictive analytics to forecast demand accurately, enabling them to adjust production in real-time and minimize waste. AI can also analyze a wealth of data from various sources to identify trends and patterns, thereby predicting potential disruptions in the supply chain. By pre-emptively recognizing these disruptions, Walmart can take proactive measures to mitigate any adverse impacts, thereby maintaining a consistent supply of goods.

Blockchain tokens can revolutionise Walmart’s supply chain by providing real-time visibility and traceability (Alkhader et al., 2020). These digital tokens represent physical assets and can be tracked throughout the supply chain, from the raw material stage to the end consumer. This can help Walmart ensure product authenticity, monitor product movements, and identify bottlenecks or inefficiencies in the supply chain, thereby reducing losses associated with counterfeits, theft, and inefficiencies. This kind of visibility can also reassure consumers about the origin and quality of their purchases, enhancing Walmart’s brand image and trustworthiness.

Monitoring supplier performance continuously and providing constructive feedback is another critical area where blockchain can play a transformative role. With blockchain, Walmart can create an immutable, accurate record of supplier performance indicators such as quality, delivery, cost, and innovation (Ozdayi et al., 2020). The clarity provided by this technology enables suppliers to understand their areas of improvement and align their goals with those of Walmart. Additionally, Walmart can launch capacity-building initiatives, such as training programs on blockchain technology, to improve supplier capabilities and their comfort with adopting this technology.

AI can also automate and optimise logistics, a critical area for a global retailer like Walmart. AI-powered logistics solutions can determine the most efficient routes, considering factors like traffic, weather conditions, and fuel costs, to ensure the timely and cost-effective delivery of goods (Punia & Shankar, 2022). Moreover, suppliers equipped with AI capabilities can support Walmart in offering more innovative products to its customers. AI can analyze consumer behaviour and preferences to identify gaps in the market or predict upcoming trends, guiding the development of new, highly targeted products.

To enhance the overall effectiveness of its supplier evaluation and selection process, Walmart could consider adopting a comprehensive supplier scorecard linked to a machine learning system (Guan et al., 2023). This would involve assessing potential suppliers on a range of criteria, not just cost and reliability but also financial health, operational efficiency, sustainability efforts, and capacity for innovation. By doing so, Walmart could ensure a more holistic assessment of suppliers, leading to better-informed selection decisions that align with its strategic goals and the evolving demands of the retail industry.

As a titan in the global retail industry, Walmart’s procurement and supply-chain management practices are decisive in shaping its performance and competitive standing (Bank Muñoz et al., 2018). The company faces many uncertainties, including geopolitical disruptions, environmental issues, economic fluctuations, technological advancements, and evolving consumer preferences. Such complexities can significantly impact Walmart’s procurement and supply-chain activities. To navigate such uncertainties, Walmart needs to implement a multifaceted approach, including diversifying its supply base, adopting robust risk assessment and contingency planning, embracing technological advancements, focusing on sustainability, and establishing cost-effective strategies.

The promise of systems based on the Internet of things (IoT) and industrial Internet of things (IIoT) for the supply chain industry is large and growing. Such technologies promise to increase the ability to collect data using a variety of sensors, from local recording using RFID technology to more complex wireless systems and sensors, up to the ability to log and analyse the movement of systems globally. As global interconnectivity increases with more widespread and stable wireless networks and mobile networks, the ability to send information becomes ubiquitous.

Walmart Inc., headquartered in Bentonville, Arkansas, is the world’s largest retail corporation by revenue and employees (Bank Muñoz et al., 2018). Operating various formats of retail outlets in 27 countries under 55 different names, Walmart commands an extensive global supply chain. Its key product categories include groceries, clothing, home goods, and electronics, which are sourced from an array of domestic and international suppliers. This paper explores the critical uncertainties in Walmart’s procurement and supply management, and offers recommendations for managing these uncertainties and enhancing supplier relationships.

Creating such systems requires integration across more than mere supply chain- and logistics-based solutions. It is important to integrate the benefits that can occur outside of supply chain operations to fully recognise the benefits of such applications. Yet, the difficulty with such an approach lies in gaining agreement across different vendors, which requires gaining widespread industry adoption of particular standards. As 5G rolls out, creating new technologies provides opportunities for members to work in conjunction with each other and provide interoperable solutions (Giust et al., 2018).

Mohamed et al. (2020) further demonstrate that IoT systems can be extended into integrating unmanned aerial vehicles that can deliver products to the last mile or the customer. While existing problems with regulations and the integration of competing vendor products limit such deployment, such systems will eventually become part of the normal logistics deployment process. If correctly implemented, the promise, noted by Attaran (2017), of increasing interconnectivity coupled with decreasing costs will lead to the improved integration of systems and improvements across transport technology.

The development of global shipping accelerated with the integration of standardised shipping containers (Notteboom & Rodrigue, 2008). But, at present, the fragmented nature of monitoring in sensor systems, when combined with the lack of development in electronic data interchange (EDI) and other forms of shipping and logistics bills, has led to a wide fragmentation of solutions and standards. In addition, different countries, trading blocks, and regions have different requirements, and the range of proprietary systems has led to multiple proprietary systems failing to interact.

Importantly, shipping containers are, “above all, cheap practical vectors for commerce” (Gutiérrez, van Meesnijk & Arrowsmith, 2012, p. 5). Solutions that significantly increase the cost of transportation should be avoided; rather, economically inexpensive sensors should provide alternatives to high-cost materials. In addition, the decreasing cost of technology provides opportunities to implement different types of sensors or to integrate monitoring and control devices securely within shipping containers and transport vehicles, without necessitating the development of new metamaterials (Bandyopadhyay & Sen, 2011).

Most critically, in conducting a literature review associated with the integration of smart technologies and IoT, Winkelhaus and Grosse (2020, pp. 25-29) demonstrate how the logistics process will be integrated from packing and the periphery of objects (p. 28) through to the wider distribution process in a manner that increases e-commerce opportunities, improves warehousing capabilities, and reduces transportation costs (p. 26). Such systems are also noted to improve order picking, storage, and just-in-time inventory management and reduce packaging and waste.

Artificial intelligence can also optimize supply holding, reducing the costs associated with overstocking or understocking. Machine learning algorithms can analyze historical sales data and variables such as seasonality, promotional activities, and economic indicators to accurately forecast future sales (Punia & Shankar, 2022). This allows for precise inventory management, ensuring Walmart has the right stock at the right time. Efficient inventory management reduces costs and enhances customer satisfaction by avoiding stockouts and ensuring products are available when consumers want them.

Effective procurement and supply management practices are pivotal in an increasingly complex global retail industry. Blockchain, a distributed and transparent ledger system, can augment these practices, enhancing Walmart’s competitiveness significantly. Central to this strategy is fostering robust, collaborative relationships with suppliers where mutual objectives are intertwined. Blockchain’s transparency and traceability could open new avenues for collaboration, extending from joint product development initiatives to shared sustainability goals, thereby boosting product quality and overall operational efficiency (Tan et al., 2018).

Evaluating the supplier selection process from the industry context perspective, Walmart’s strategic priorities, the supply market, and supply network characteristics reveal opportunities for further enhancement. While cost efficiency and reliability are essential, expanding the criteria to include strategic alignment, sustainability, and technological capabilities of suppliers can optimize the selection process. Incorporating a comprehensive supplier scorecard and assessing a wider array of criteria like financial health, operational efficiency, sustainability efforts, and innovation capacity could yield more holistic evaluations.

Technological advancements, especially blockchain (Christopher, 2016), can offer transformative solutions to Walmart’s procurement and supply management activities. Blockchain technology could provide a transparent and immutable ledger, ensuring traceability and verification of transactions along the supply chain. This could aid in making more informed purchasing decisions and enhance trust among all stakeholders. Walmart could also utilize cloud-based procurement solutions to streamline its operations, improve efficiency, and enable real-time collaboration with suppliers, improving response times and decision-making processes.

The rising consumer demand for sustainably and ethically sourced products calls for an intensified focus on sustainability in procurement activities. Blockchain can play a significant role here by providing visibility into suppliers’ practices and confirming adherence to sustainable and ethical standards (Ahmad et al., 2021). By prioritizing suppliers demonstrating solid commitments to sustainability and ethical practices, even if their prices are slightly higher, Walmart could enhance its brand image and earn long-term customer loyalty.

As one of the largest multinational retail corporations, Walmart’s procurement and supply-chain management activities are significantly influenced by various uncertainties. First among these are geopolitical disruptions (Yeung & Coe, 2015). Changes in trade policies, the introduction of tariffs, or the imposition of sanctions can drastically impact the cost and availability of goods. To maintain the efficiency and effectiveness of its supply chain, Walmart must continuously monitor and adapt to such policy changes.

Economic fluctuations also pose a significant challenge. Consumers may reduce spending in economic downturns, decreasing demand (Greenwald & Stiglitz, 1993). Alternatively, during periods of economic growth, increased competition can drive up the prices of goods, affecting Walmart’s cost structure. In both scenarios, Walmart’s procurement and supply management activities must be agile enough to adapt to these changes, which might involve seeking more cost-effective suppliers or adjusting procurement strategies to match changing demand.

Moreover, introducing Central Bank Digital Currencies (CBDC) into Walmart’s payment system could reduce transaction costs and simplify cross-border payments. This digital currency, governed by a country’s central bank, can streamline the payment process, reduce transaction times, and lower business costs (Kim et al., 2022). Using CBDC can also reduce the reliance on traditional banking systems, minimizing the risk of payment delays and adding more value to Walmart’s procurement and supply management activities.

Mumtaz et al. (2017) demonstrate how the fragmentation of wireless IIoT technologies limits the adoption and integration of such systems. Therefore, a three-level integration is recommended where industry-based solutions are developed over cross-technology integration from different suppliers, the cross-organisation of information across different enterprises, and the cross-domain integration of business ecosystems across different industries (p. 31). In creating operability, different vendors also benefit from gaining access to a wider range of markets.

Furthermore, integrating artificial intelligence with blockchain opens new avenues for managing risks and uncertainties (Charles et al., 2023). AI’s predictive analytics can analyze blockchain data to forecast potential supply chain disruptions, giving Walmart a proactive stance in managing these risks. For instance, machine learning algorithms can use data stored on the blockchain to predict possible delivery delays or identify suppliers that pose a risk due to past non-compliance issues.

Consequently, the challenges associated with the lack of logistic standardisation noted by Min et al. (2014) present both opportunities and problems for the industry. As the authors note, even within countries such as Korea, the lack of a total system architecture capable of integrating both inbound and outbound supply information limits the ability to fully utilise machine learning systems and monitor the movement of goods using advanced technologies.

Risk assessment and contingency planning are vital components of Walmart’s strategy (Sheffi, 2009). This proactive approach involves systematic identification and evaluation of potential risks and creating contingency plans to tackle these risks effectively. For instance, if a critical supplier is in a region prone to natural disasters, having a contingency plan, such as identifying alternative suppliers or increasing inventory levels, can provide a safety net, ensuring uninterrupted supplies.

Suppliers who integrate AI into their operations can provide a significant competitive advantage to Walmart. From improving efficiencies in production and logistics to enhancing product offerings based on customer preferences, AI-powered suppliers can help Walmart navigate the complexities of the retail industry (Tarallo et al., 2019). Through these technology-driven partnerships, Walmart can stay at the forefront of retail, meeting and exceeding customer expectations while improving its bottom line.

The difficulty with such an approach (Xiaohong, Jinlong, & Shuanping, 2021) is that many organisations will underinvest in the short term and monitor the investments and deployments of other suppliers and integrators. While some companies will gain significant advantages by investing in technologies that end up as a large-scale standardised platform integrating IoT and supply chain management systems, others will find the investment in obsolete technologies detrimental.

In the face of economic fluctuations, cost-effective strategies are paramount. Walmart could strengthen relationships with suppliers to negotiate better terms and conditions. Committing to longer-term contracts with suppliers, facilitated by blockchain smart contracts (Cong & He, 2019), could secure lower prices and guarantee supply, even during economic downturns. These smart contracts could automate transactions based on pre-set rules, reducing administrative costs and the likelihood of disputes.

Another substantial uncertainty is the rapid advancement of technology. The retail industry is increasingly digitised, with e-commerce emerging as a significant growth area (Dekhne et al., 2019). As such, Walmart must ensure its procurement and supply management activities can keep up with these technological advancements. This might involve integrating digital tools to streamline procurement processes or data analytics to make more informed purchasing decisions.

Environmental concerns constitute another significant uncertainty. Given the global expanse of its operations, Walmart’s supply routes can be significantly affected by environmental disasters like hurricanes, floods, or fires. For example, a flood in a region where a key supplier is located could disrupt the production or shipment of goods, impacting Walmart’s ability to stock its stores and serve its customers (McKnight & Linnenluecke, 2019).

Furthermore, the motivational aspect of supplier management can also be enhanced through blockchain. Long-term contracts can be executed as smart contracts on a blockchain, providing suppliers security and demonstrating Walmart’s commitment to the relationship (Natanelov et al., 2022). Similarly, performance-based incentives can be automated through blockchain. In recognition of exceptional performance or innovation, suppliers can be rewarded through tokenized incentives on the blockchain platform.

Furthermore, sustainability has become a critical priority for many consumers and businesses (Bateh et al., 2014). This warrants a greater emphasis on the sustainability practices of suppliers in the selection process. Suppliers who demonstrate firm commitments to sustainability, such as those with responsible sourcing and waste reduction practices, can help Walmart cater to the growing consumer demand for ethically sourced and environmentally friendly products.