Episode 272: Crafting Walmart’s Customer-Centric Supply Chain with David Guggina

April 24 , 2024  |  By Brent Williams

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This week on the Be Epic podcast, Brent welcomes David Guggina, Executive Vice President of Supply Chain at Walmart. They delve into the transformative strategies and technological advancements reshaping Walmart's supply chain to better serve and meet the rapidly changing needs of customers globally. David shares insights from his extensive background in supply chain management, starting from his early days at Purdue University, through roles at General Motors, Anheuser Busch, and Amazon, before joining Walmart. He discusses the integration of e-commerce and physical store operations at Walmart, emphasizing the implementation of modern software and robotics to enhance efficiency and customer satisfaction. The conversation also covers Walmart's commitment to a people-led, tech-empowered approach that prioritizes both associates and customers in creating a seamless omnichannel retail experience.

Podcast Episode

Episode Transcript

David Guggina  0:00  
Time and time again, I find that the best performers aren't necessarily the people that come with the skill set already intact. It's just the folks that are dedicated to our purpose.

Brent Williams  0:14  
Welcome to the be epic podcast, brought to you by the Sam M. Walton College of Business at the University of Arkansas. I'm your host, Brent Williams. Together, we'll explore the dynamic landscape of business, and uncover the strategies, insights and stories that drive business today. Today, I have with me, Dave Guggina, and Dave is Executive Vice President of Supply Chain at Walmart. Dave, thanks for being here today.

David Guggina  0:42  
Brent I am excited to be here and look forward to the conversation.

Brent Williams  0:46  
We're excited to have you on campus both for this and interaction with our students. We appreciate your time and that maybe before we dive in, because I want to, I want us to talk about the supply chain transformation, that that you are leading along with others at Walmart, but maybe before that, for this audience, tell us a little bit about your background and, and then also the scope of responsibilities that you have at Walmart.

David Guggina  1:14  
Absolutely. So I I reside in Northwest Arkansas. I've been living here for about three and a half years. I've been with Walmart for about six and a half years. Live with my two girls, Colette and Eloise and my wife Danielle, and we love this area, love spending time outdoors. Love walking this campus. It's a beautiful area of the country. So like I said, I've been working for Walmart for six and a half years I started with Walmart, in the E commerce space. In a role we call it operational excellence. But but essentially, my focus, when I first came in was the software and the robotics that we were looking to deploy in our e-commerce and our fulfillment network. And then over time, we brought the e-commerce supply chain teams and the the legacy or the store side supply chain teams together. And then more recently, we've brought the store operation teams and the supply chain teams even closer together from an org structure standpoint, and formed a team that we call end to end. And today I oversee central US supply chain. So I've got a team that focuses on flow, end to end flow from point of origin to point of sale. I've got a team that focuses on end to end supply chain strategy. And then there's all the assets that we manage, our ports, our inbound consolidation centers, distribution centers, we have both ambient distribution centers and temperature controlled or perishable distribution centers and then fulfillment centers across the country. So over 270 assets, physical assets across the US today. Before Walmart, I started my career in supply chain when I was in college at Purdue University. I worked for General Motors. And then I spent a couple of years with Anheuser Busch. My first job there was logistics planning for the St. Louis brewery. So we didn't have software doing load planning. So it was people like myself. So routing and dispatch as well. And then I ran a canning line for Anheuser Busch. And then, you know, they were acquired by InBev. And during that time was like 2007. A company amazon.com reached out to me. And I didn't know what amazon.com was, at the time, they were pretty small. They had 10 fulfillment centers in the US. So I, I went onto their website and started became a seller just to test it out to see if I wanted to go work for this company. It was pretty, pretty seamless experience to become a seller and I thought they figured something out. So went and worked there for about a decade in a bunch of different roles, fulfillment roles, inbound, outbound, customer returns, quality control, lead, my last role was leading a virtual team. So a team that everyone worked from home, we're in 11 different countries, we provided customer service, we resided in within operations. And that was an interesting experience as well. So then I had a mentor who had left Amazon and took a short stint as the CEO of Restoration Hardware and then went to Walmart and recruited me for about something like six eight months and talked me into jumping over and at Walmart, I've found that Walmart's purpose and reason for being aligned really well with you know, how I live my life and the values that myself and my family have and this is home for me.

Brent Williams  4:59  
Yeah, wow. Home for me as well, I love it here. And, you know, I thought I would ask you this question, you know, you've had lots of different experiences in your background, and in some ways, Walmart pulls all of that together, right, you know, with the with the physical footprint, you know, the E commerce explosion, you know, in the business that's happened and, and everything else in between.

David Guggina  5:24  
It does, you know, we've been using the term saying where people and tech empowered omni channel retailer that exists to serve, and save people money so that they can live a better life. And that couldn't be more, more true, I'm not sure that the term omnichannel will stand the test of time, but I do know that the people led, tech empowered will, that's how we think about it. And, you know, we start with the people on our teams, the associates, working in our stores, the communities that we serve, and, and, you know, we're, we all are working together, so that we can bring the best experience possible for the customers that we serve them, hundreds of millions of folks across this country and the globe.

Brent Williams  6:13  
I think that's the thing that's hard to get my head around sometimes with Walmart is just how many people across the globe that you're touching on a daily or hourly basis? Well, you know, I know that just in getting to know, you know, the last couple of years, and then, you know, observing Walmart, you all have been going through quite the transformation in supply chain. And would, that's where I'd really like us to spend the majority of our time and like what's, you know, maybe at a high level, describe that supply chain transformation for us. And, but then also like, what precipitated the, the need, and the, you know, and, and the urgency in this.

David Guggina  6:59  
When I think about the need, I think about something that our US CEO, John Furner, says quite a bit, and that is that in retail loyalty exists in the absence of a better alternative. And retail's constantly changing, because our customer's needs and wants are constantly changing. Mr. Sam would say customers vote with their, their wallet, right. And they're voting, you know, every single day in our business. So the supply chain is critical to the customer value proposition that we ultimately put put in front of the folks that we serve. And we have to be able to keep up with the pace of work, which customers needs and wants are changing, and they're changing more rapidly today than I think they have in a long, long time. And I think that's partially due to the fact that technology is changing. It's not on a linear trajectory, it's on an exponential trajectory. I'd say, you know, I say all that to say in the simplest terms, we, we looked at our supply chain, and wanted to change because we want to serve. We exist to serve the customers. And, you know, outside of our values and our principles, change is the one thing that's constant at Walmart. So if I think about the, the transformation itself, I guess I would, I'd start with, you know, talking about the evolution of our supply chain. So Mr. Sam realized early on in Walmart's storied past, that owning the supply chain controlling the supply chain was, was a competitive advantage from the standpoint of providing everyday low costs, which allow you to provide everyday low prices. So he stood up the Ambien distribution network, that was where we started. And I've been in some of the facilities that are the first distribution centers that we we we kicked off over 40 years ago, and then they're running today. And then, you know, customers really enjoyed those everyday low prices. And they also they liked shopping for general merchandise with Walmart. They also wanted that experience with with consumables with fresh goods food. So then we we stood up a perishable supply chain. And then customers again, changed and wanted to have goods delivered to their doorstep. And we stood up a fulfillment network. And then more recently, you know, customers again are changing. They Want this omnified experience of not only being able to shop off a shelf, but having been able to pick up goods from their local neighborhood market and also have goods delivered to their doorstep, or even inside their refrigerators or their pantry, so we're changing yet again. But this time, we're not standing up another network, we're integrating the networks in a more connected and flexible way. And we're doing that with modern software capabilities, as well as robotics or hardware capabilities. And we're rolling those capabilities across the entirety of our supply chain, software can move at a much faster pace, because it doesn't require you to pour concrete for example. So we're moving rapidly with, you know, improved transportation management systems, yard management systems, warehouse control systems, warehouse management systems, modernizing those connecting those, but then we're also bringing in modernized robotics, I think, you know, if you look at our major investments, one common thread is automated storage and retrieval systems, which allow us to densify storage and a particular centroid or node where an asset is, so that we can improve our cube utilization for those nodes. But then it also removes a lot of the manual redundant work and helps us become more accurate. As well as increases our throughput capacity and, and our productivity, quite frankly.

Brent Williams  11:37  
Yeah. So which, really, ultimately, as the, as the customer that ultimately serves what I want, right, which is really what I want is the item that I want, or the items that I want, when and how I want it. You know, the the focus on automation, and robotics, has probably been some of the most well documented, you know, of the work that that you've done. What's the change management process been like inside Walmart to or, you know, for, for adopting not only, I guess, the technology, but also the integration of, of legacy lines of the supply chain, that can't be easy work.

David Guggina  12:21  
It's not, it's not easy work at all right. But I would say it's, it's incredibly valuable, right? The fact is that we have these nodes that exist across the US that are the right locations, right, and being able to reshape those nodes with the most modern software and hardware without having to put a new dot on the map is incredibly valuable. So it is important for us to manage through the change and be able to come up with solutions that truly change our processes, processes at the root at their core and create something totally new and different from a process standpoint, that gives you capabilities that we just flat out cannot couldn't even imagine with with the more manual processes that we've historically utilized. So so it is it is very valuable. What I would say is how we think about it. When we're implementing new technology into the supply chain. From a change management standpoint, we start with proof of technology, we cast a really broad net at Walmart, both internally and externally to try to find the best ideas, capabilities, tools to solve problems that help us serve customers better. So we cast that broad net, we call it pot proof of technology. And often that work is done in one of our labs or or at one of our partners, labs, or one of their centers. And once we found that a technology is something that we think can really help us move forward towards delivering outcomes that matter to customers quickly. Then we move to proof of concept. And that just basically brings that capability in house at a really small scale. And if that proof of concept is successful, so we'll define KPIs key performance indicators that that let us know, hey, this is bearing fruit, then we'll move from a proof of concept to a pilot and pilot is just broader scale. And we, you know, we use math to tell us, hey, what is the scale that we need to prove this capability out at so that we are confident that it can be rolled out across the network, and then we move to roll the rollout phase? And depending on the capability and how disruptive it is. We have teams that handle rolling these these initiatives out out. Some are relatively simple and easy, like a software update. You know, and it's more of an informed the site through one of our communication mechanisms. Others, like we've shared our ambient automation program where we're partnered with a company called symbiotic. That's pretty disruptive. So we have teams that focus on training, focus on prepping the site focus on, you know, ensuring that our associates have the right skills and tools so that when that change occurs on site, we can that lead time to proficiency is shrunk. And the great news is, we're getting better and better at handling this kind of change. And I see it in the data with how quickly we go from launch to fully proficient. 

Brent Williams  15:53  

David Guggina  15:54  
So, but it is, we're learning new new things on a, on a daily, weekly basis. And how to do better. 

Brent Williams  16:03  
Hourly, yeah. You know, we've talked about the customer as a key stakeholder, of course, in the supply chain transformation. associates are another really key stakeholder in in this transformation. And I'm not asking you about both well, one, I had the opportunity along with you with your team to be in one of the the new fulfill fulfillment centers. And I got the opportunity to talk with a woman that like she was elated, you know, I felt like in her role in the way that it has changed interacting with the technology, but like inside the fulfillment centers, that part of the network? How How are you equipping associates? And what's what's their reaction to these change?

David Guggina  16:56  
So let me let me back up, and then I'll answer that question more directly. How I think about this is I and I think you and I've talked about this before, briefly, but you know, I'm excited about the capabilities. I'm excited about what it means for our customers. But I would say I'm most excited, or I get my cup gets filled up the most when I spend time with our associates in the impact that this reshaping of our supply chain is going to have and is having on them. What we're doing is we're bringing together robotics software and people said differently, we're bringing together machines and humans. And machines are really good at ingesting large quantities of data and processing them at high speeds. They're also good at executing repetitive tasks with a subset of rules at high speed. With high levels of accuracy and quality. Humans are really great at problem solving. Humans are great at utilizing their creativity, utilizing empathy for one another, and upstream and downstream. Participants in the supply chain and or ultimately, the customer in our programs, in my opinion, are really focused on allowing machines to do what they do best, and allowing humans to do what they do best. And how does that ultimately show up? And how are our associates responding? You know, I think of a conversation I have with a gentleman named David shares my name at our Brooksville, Florida site, which is we're putting in the the ambient automation. And we were having this conversation and he almost got emotional, just saying, you know, when I asked him has it changed your life, he's like, I'm building a pole barn. At first, I was like, what, that's how it's changed your life. And he went on to explain how, you know, when he was driving eight to 10 miles a day lifting hundreds of items, cases every hour. He he went home and just didn't have the energy to do during the week things that you know, that he wanted to do with his friends with his family. In this case, he wanted to build a pole barn and he walked me through how he had recently completed his pole barn and how the automation allowed him to do that. So what I have found is we go through our change management process, POT proof of technology, proof of concept, pilot, and those associates that experience that change originally they are our champions. And if you can get them to interact with the rest of the population. It's it's this self perpetuating model that we don't need to sell this, we don't need to convince people that it's the right thing. They do it themselves and we see it in the data, our jobs, we are we today we provide good jobs that lead to great careers. And I think we're doing that. At an at another level, right, the ceiling is becoming the floor. And this reshaping of our network and the capabilities is helping us do exactly that. So our associates are excited about the change. And then I think you also mentioned how do we equip them, you know, we are we have learning teams that train our, our associates, and give them put the tools in their toolkit that allow them to take on these new roles. And some of those we've talked about pretty publicly An example would be like the associate to driver program. Some that we'll talk about more in the near future are associate to technician programs, which are incredible. And, you know, time and time again, I find that the best performers aren't necessarily the people that come with the skill set already intact. It's just the folks that are dedicated to our purpose, and have been with us for a long, long time. And it's just us investing in them and giving them the new set of capabilities they require to do the jobs of the future, so.

Brent Williams  21:35  
Well and it's that point that I was just thinking about, as I was listening to you thinking like those associates that are committed to the purpose have been with you. And then the investment in them that is, in some ways future proofs them in their career is, is quite a meaningful thing. You know, you mentioned David building a pole barn, I was actually last night, I was with my family on the front porch. And it was a beautiful night in Northwest Arkansas. My kids were my girls were 

David Guggina  22:06  
Good time of the year right now.

Brent Williams  22:06  
playing time of the year volleyball, and a car pulls up to our house and didn't know who it was. And long story short, gentleman starts unloading groceries and other items from Walmart. And my wife and I were both sitting there. And after he left, you know, I told her like, well, I will thank Dave, for the fact that you can sit here beside and enjoy this night instead of shopping.

David Guggina  22:34  
It's not me, 

Brent Williams  22:35  
You and your team, 

David Guggina  22:36  
There are many so many folks involved in that space. Even beyond the supply chain team, it's just unbelievable to see how the end to end operations, the stores, the supply chain, our delivery partners, Spark drivers, are all coming together to create these pretty incredible experiences.

Brent Williams  22:55  
You know, so fundamentally, right, you had heard a story of how you've impacted one of your associates lives hears, you know, at least a firsthand customer story. That's quite purposeful. So how is that purpose helping you attract the talent? I guess it's that purpose. It's helping you attract the talent from, you know, folks in fulfillment centers, but also, you know, the engineers and the expertise that you're bringing across the team, it just seems like as I interact with more and more of your teams, I'm blown away with their capabilities.

David Guggina  23:30  
Yeah, great question. I would say. I often answer things in a roundabout way. So I'll get there. But where I'm going to start is, I think for a long time in supply chain and just industry in general, even manufacturing. You know, I think it started probably in the industrial age, we had this model of there's leaders and there's followers. And there's top down directive. I think we're exiting that age and in, in most cases, at least with Walmart, we've already moved far beyond that. And we're moving into a world where there are leaders of leaders, where we are focused on empowering individuals. And I think we do that through communicating to the leaders within our organization, and even folks that are interested in potentially joining us the purpose of why we exist, right? And companies that have strong purpose, I think have an incredible competitive advantage. In today's day and age, with this model, people don't just go to do a job get directed from the top down and, you know, connect two widgets together. They want to understand why they're doing something. And at Walmart, where we're very, very clear on we exist as a company to serve. Our purpose is to save people money so that they can live a better life. And that's not just in the US that's across the globe. We're dedicated to the communities in which we reside. We want to make those communities better places. So I couldn't ask for a better tool to help us bring talent into the organization, whether it's bringing it up through the organization, from someone who started loading trucks for us, or whether it's attracting undergraduates, graduate students, subject matter experts in different fields. So all that we do kind of starts there. And then how we conduct work to deliver on that that purpose, like I mentioned earlier, is constantly changing. So we're introducing new capabilities that require us to get expertise in areas that are new and different for for the company. But again, that strong Purpose allows us to do that more seamlessly.

Brent Williams  26:17  
You know, Dave, another stakeholder in the transformation, I assume is your partner's you mentioned, there's been, you know, that, that you guys have been public about your partnership with synbiotics, as an example, has this transformation required you Walmart to work differently with those partners in some ways?

David Guggina  26:40  
I would say is we, you know, in different companies take different approaches, a lot of companies will just do the vast majority of their development in house. And don't get me wrong, we are we're builders. And if you look at the our tech organization, our software engineering organization, it's incredible what they're building, we're building capabilities in house that are helping us do things in new and different ways that are pretty, pretty unbelievable. But at the same time, we don't sit back and think that we have all the answers or all the best ideas. So I mentioned earlier that we cast a broad net. 

Brent Williams  27:24  

David Guggina  27:25  
And we partner like here locally, we partner with plug and play, I think, I think you and I've been at events, 

Brent Williams  27:32  
We have yeah, 

David Guggina  27:33  
Plug and play, you know, and they're bringing in companies and different stages, early stages of development, and introducing them to folks like ourselves, and others within the area. You know, and I, I love having the opportunity to work with these different organizations in different phases of their development and maturity. Because the ideas that are coming about are just unbelievable. So like I said, we're not, we're not so proud to think that we're the only ones with with all the great ideas. We do have incredible amounts of valuable data that can help us develop solutions with others that deliver great results for retail and great results for Walmart customers. And then, specifically on have we had to partner with folks in different ways. I guess what I would say is the scale of the change with some of our key partners is so significant that absolutely we've had to be there's been a level of depth in the partnership. That's, that is different than what I've seen in the past. It's one thing to deploy a capability, whether it's a combination of software and hardware or one of the other in a handful of sites. And then across the entire network. 

Brent Williams  29:11  

David Guggina  29:12  
And the closer that partnership is whether it's managing a ramp, or the procurement of raw materials, the closer that partnership is, the more efficient, you're going to be in the delivery of the ultimate solution. So, yeah, we've really had to lean into those relationships. And it's helped us it's helped us move much, much quicker.

Brent Williams  29:39  
Yeah, I can only imagine that the partnership piece of that is is critical. Just because of the scale. No one else you know has the scale and that is going to be required to deploy technology in hardware. Well, you know my finish up with a couple of questions. Just as your as you're looking out there maybe maybe zooming out a little bit just as you're continuing to lead, of course, the supply chain organization at Walmart and the continued transformation, just what's what excites you, you know about the future in supply chain? And, and you know, you'll be with a group of our students and in just a few minutes, what what advice do you have, you know, for Walton College students, as an example, that are thinking about careers, not only in supply chain, but more broadly, and many of them will be graduating in just a few weeks.

David Guggina  30:37  
I think what excites me, we're fortunate to be, you know, alive in this this period of time. Specifically, because of the advancements in technology, and I mentioned this briefly earlier, but technology does not follow in an intuitive like linear view, it's exponential. So the progress in the 21st century isn't going to be 100 years of progress. If you use the rate of change, you know, the last 100 years, it's going to be the equivalent of 20,000 years or whatever that whatever that would equate to, but it will be significant. And, you know, when you think about supply chain, we want to know what we own, where it is, in what quantity, in what condition all in near real time. And folks have reached for that for a long time. And it's just unbelievable to see the capabilities that we have today that we're able to deploy that are allowing us to achieve that vision. And the outcomes from that our folks will talk about speed a lot. And speed is important. But think about like the importance of being timed definite within a supply chain. And all that you can do to optimize if you know what you own in what quantity where it is all in near real time, and when it's going to be where it is today. And when it'll be to the next point. All the waste you can extract it's it's an exciting time. And then when I think about advice that I would give to new new graduates. So a couple things come to mind. First, you know, we were talking you will have a supply chain course for freshmen and sophomores I believe. You know, it's not incredibly common to do that, that early in someone's career. I think that's incredible. I think what what I found when I was in school, and I think under students will find is that they'll find that they're good at certain things. Let's say you're taking a course in supply chain, and you're doing your last mile delivery, catchment and batching design with some kind of you're building a model based on a subset of data that was given to you from your professor, you may find that you enjoy that you may find that you're good at it. I would say as you exit, school and move into the workforce, you know, find something you're good at and become exceptional at it. You know, so many folks think, oh, I need experience in a bunch of different areas that'll come. But first, whatever you start doing, if it's in supply chain, just find something you were good at, then become incredible at it and become a subject matter expert. And then others will come to you to learn. And guess what happens when they do that they're going to teach you something. And they're going to want to pull you into new and different experiences within your career. So that'd be one piece of advice. And then my, my second would be I think in today's day and age, the ability to be present and listen to someone else is so valuable. And if you give someone your your full attention, it is an expression of respect, empathy, care, and those individuals will will thank you for that. And we'll treat you differently because you treated them that way. And that'll help you build, build your network and build relationships and in that leader of leaders model, it'll help you get leaders to follow you and help you move towards whatever outcomes you're trying to drive or whatever goals you're trying to achieve. And then the last advice is, you probably want to come work at Walmart in supply chain if you're graduating so give us a call.

Brent Williams  34:57  
I love it. Uh, well, seriously, what great advice, you know, work hard, become excellent at something, and, and be a little patient. You know, that's what I talk to our graduates about Be a little patient because you're exactly right excellence. People want to be around people that that operate and work with excellence and they want them on their team. So those opportunities will come. But also want to, you know, the the advice of be present and listen, you know, in a world that's pretty noisy, right, and seems like it's increasingly noisy is quite simple, but quite powerful. So, Dave, thank you for being here today. Thanks for spending some time with me and talking about the supply chain transformation. And thanks for spending time and investing in our students. Some of the some of the students that you're spending time with today will hopefully be leaders of Walmart supply chain in the future.

David Guggina  36:00  
Hope so. Thank you, Brent. Appreciate your time.

Brent Williams  36:03  
Thank you. On behalf of the Walton College thank you for joining us for this captivating conversation. To stay connected and never miss an episode, simply search for Be Epic on your preferred podcast service.