When it comes to the benefits of automation in logistics, a big organization like Walmart can benefit hugely. With blockchain gaining mainstream acceptance, Walmart is investing $3.5 billion into its Canadian operations with the support of DLT Labs and other technology partners.
DLT Labs recently launched a blockchain-based supply chain system and it has quickly produced dramatic efficiencies and savings for Walmart Canada’s 500-thousand annual shipments – reducing invoicing disputes and discrepancies between carriers of Walmart from 70% down to under 2%.
“Walmart is a world leader in developing and adopting transformative technology to optimize operations so its customers can ‘Save Money. Live Better’. DLT Labs is proud to be Walmart Canada’s technology partner in bringing the world’s largest blockchain solution into production for transportation management and payments. This innovation has already virtually eliminated the challenge of invoice reconciliation that pervades the transportation industry, reducing discrepancies that could reach 70% of all invoices to well under 2% with our technology, delivering profound operational improvements and cost savings,” said Loudon Owen, CEO, DLT Labs.
Imagine the potential savings for both Walmart and its supply chain partners in the long term?
5-year $3.5 billion investment in Canada
Walmart Canada’s investment will impact every aspect of its operations leading to a faster e-commerce experience with re-invented, “smarter” stores, an enhanced omnichannel shopping experience, modern digital tools to ensure associates can serve customers better, and two new distribution centers to speed up the flow of products.
“We need to do everything we can to delight our customers every single time they shop with us, whether it’s online or in the store. We’re challenging ourselves to be better and be relentlessly focused on excellent omni customer service and experience,” said Sam Wankowski, Chief Operations Officer, Walmart Canada. “This means better stores, quicker service, and doing what Walmart does best – focusing on customers, always at Walmart’s everyday low prices.”
Walmart will renovate 150 stores – one-third of its Canadian operations – with digital technology to create “smarter” stores including:
- Expanded electronic shelf labels, shelf scanners to monitor product volumes, robotics, and computer vision cameras to simplify, minimize touches, and maximize efficiency and inventory accuracy.
- A new checkout experience to reduce touchpoints, including tap-to-pay, and bigger self-checkout and “Check Out With Me” mobile payment technology to allow associates to check out customers anywhere in the store.
Other investments will include two new distribution centers in Surrey, BC and Cornwall, Ontario, as well as a next-generation update to its 550,000 square foot distribution center in Vaughan, Ontario. The new distribution centers and systems will increase speed, inventory management and delivery for in-store and online customers.
“The retail business is as dynamic as ever and this investment ensures we’re developing a supply chain that is the envy of the world. The better the supply chain, the quicker our customers can get the products they want. This investment will transform our supply chain and create hundreds of Canadian construction jobs along the way,” said John Bayliss, Senior Vice President, Logistics and Supply Chain, Walmart Canada.
Blockchain here, blockchain there
The new blockchain technology platform with DLT Labs will form part of the world’s largest transportation payment and logistics system according to Walmart Canada.
“While the return on investment for Walmart is confidential, Walmart is an extremely financially disciplined organization that requires a clear and substantial ROI. In the case of their adoption of DL Freight™, the speed of payback was extremely fast, and the annual return on investment is easily measured in millions of dollars. At the same time, the carriers are also experiencing material savings in time and money, so all members of the Walmart / DL Freight transportation ecosystem benefit operationally and financially,” Owen added.
Owen said In the US transportation industry alone, KPMG estimates $140 billion is tied up daily in invoice disputes. “There are overpayments, underpayments, and non-payments. The only thing parties can agree on is that there are delayed payments, which in turn drives up working capital costs because of the need to borrow, often through accounts receivable financing or factoring,” Owen said.
Even factoring is difficult or impossible when the invoices are not yet approved. “Assuming a 10% ‘cost of capital’ applied to these funds, that means $14 billion a year in the US is captive and allocated to disputes; and this capital could clearly be put to more productive use,” Owen noted.
The search for efficiencies and cost savings in both the logistics and payment sectors is accelerating for retailers with the impact of COVID-19 and the need to compete more effectively with Amazon and other online competitors. Let’s just say the “new normal” looks nothing like the old and eventually, we’ll all be the better for it.
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