Today, Bloomberg reported that retailer Walmart has announced a change involving the role of chief operations officer of the retailer’s U.S. business unit.

According to the published report, this executive move is quite unusual from two dimensions.

The first is that it that this change is occurring just prior to the start of the all-important and critical holiday customer fulfillment period. Chis Nicholas, who previously led the U.S. business unit’s finance operations will now assume the U.S. COO role.

Normally, such executive leadership changes tend to occur at the start of the retailer’s fiscal year which occurs in the February time period. This allows for leadership continuity to strategic and tactical plans with the start of each fiscal year.

The other dimension is that the existing COO, Dacona Smith, who has been a 30-year employee, was one of the highest-ranking Black executives serving in this retailer’s executive ranks. Reportedly, Smith was elevated to the role of Executive Vice President and COO of U.S. stores.

U.S. CEO John Furner informed employees of this executive change this week. Other executive changes included Steve Schmitt as the new CFO for the U.S. business unit and Seth Dallaire to assume the new role of Chief Revenue Officer for the U.S. business unit.

Walmart’s U.S. business unit accounts for two-thirds of total revenues and the lion’s share of company profits.

In his communication to employees, Furner reportedly indicated that the goal of this leadership change is to do a better job in the “flow of inventories in new and more productive ways.”

Readers may recall that over the last two years, the retailer has made senior executive changes to better integrate store and online sales channels including overall supply chain management and IT leadership roles. The retailer has since honed the company’s online fulfillment strategies to place brick and mortar stores as an integral part of the online experience including ship from store. In May, Furner announced the departure of the then supply chain operations chief Greg Smith who was going to seek an exciting opportunity outside of Walmart.

According to Walmart’s updated executive leadership web page, Nicholas’s responsibilities now include “all aspects of Walmart’s U.S. store operations and supply chain – including strategy, innovation, automation, store operations, distribution center and fulfillment center operations, last mile delivery capability, and real estate.” Both Nicolas’s and Smith’s title appear to overlap but the latter’s existing leadership responsibilities are not detailed.

A further listed supply chain executive is Joe Metzger, EVP, Supply Chain Operations for the U.S. Metzger joined Walmart in 2019 after senior supply chain leadership and integrated supply chain roles at Kellogg Company and Kraft.

Bloomberg cites criticism from R5 Capital, an equity analyst firm issued in January that indicated that U.S. stores were “an operational disaster area’ with “rampart out-of-stocks” and “significant operational inconsistencies” as a catalyst of this current executive shuffle. Then again, Walmart was not the only retailer dealing with such conditions.

 

Added Supply Chain Matters Perspectives

It is apparent that making such senior executive changes among the Walmart U.S. ranks at the very start of Q4’s all-important holiday fulfillment period would indeed be a sign of urgency. The tapping of a finance executive to lead supply chain strategic, tactical and operational customer fulfillment activities tends to have a mixed record of accomplishments. It strikes at the often-conflicting goals of added efficiency vs. increased agility and decision making. There are exceptions when financial executives have on the ground operations experience in their backgrounds.

This will a certain development that broader retail industry supply chain management teams need to pay close attention to over the coming weeks, especially beneath the surface.

 

© Copyright 2021, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.