Supply Chain: The Insights You Need from Harvard Business Review

11 HOW WALMART AUTOMATED SUPPLIER NEGOTIATIONS

by Remko Van Hoek, Michael DeWitt, Mary Lacity, and Travis Johnson

Walmart, like most organizations with large procurement operations, has challenges conducting focused negotiations with all of its 100,000-plus suppliers. As a result, around 20% of its suppliers have signed agreements with cookie-cutter terms that are often not negotiated. It’s not the optimal way to engage with these “tail-end suppliers”—for the company or its suppliers. But the cost of hiring more human buyers to negotiate with them would exceed any additional value.

Walmart solved the problem with artificial intelligence (AI)–powered software that includes a text-based interface (or chatbot) that negotiates with human suppliers ...