With a flash of the pen, The Wall Street Journal recently proclaimed the Wal-Mart Era to be “drawing to a close.” Not that the company will disappear but the singular dominance it has exerted upon the global business scene, says the paper, is on the ebb.

This, if true, makes it an opportune moment to wonder what’s going to happen to the supply chain model that Wal-Mart drove down the food chain.

 Regardless of what zealots claim, evolution happens. Paradigms change-in business as well as nature. Such is the dynamic of history-one era’s colossus writes the rules of engagement but when the economic climate changes-as it inevitably does-giants are rendered less competitive by exactly the things that produced earlier success.

The argument about Wal-Mart goes like this: competitors are making serious in-roads into the company’s market share, big vendors are weaning themselves away (Procter & Gamble derived 18% of its revenue from Wal-Mart in 2003, now it’s 15%), international expansion has stalled (failures in Germany and South Korea), and the stock hasn’t significantly advanced in years.

In terms of supply chain clout, when Wal-Mart mandated that its big vendors implement RFID a few years ago, people expected the technology to take off. Earlier this year, however, with little notice, the company suspended that mandate after suppliers complained that there was no acceptable return on RFID investment.

Just as the company serves as a kind of symbol for the ‘big box’ American consumer-driven economy of the last decade, so has its supply chain been the inspiration for many U.S. enterprises. Simply put, that supply chain translates into aggressive overseas outsourcing financed by dollars sustained at an artificially high level by foreign creditors. Or, as a trade banker recently said to me, simplifying the complexities of trade flows and imbalances into a pithy phrase, “it comes down to China making cheap stuff and Americans buying it on credit.”

Skeptics have long warned that this model is unsustainable.

That time may be finally at hand as a perfect storm starts to gather: growth of the U.S. economy lags behind its trading partners, with the ultimate impact of the credit crisis a looming sink-hole; productivity gains, the magic bullet that has spared the U.S. from inflation, are slowing; debts are coming due. No surprise, the dollar trades at lows not seen in a decade.

“After 16 years during which the U.S. mainly borrowed and bought while much of the rest of the world lent and sold,” the Wall Street Journal recently concluded, “the global economy appears to be undergoing a fundamental shift.”

The ‘macro’ here is that it’s time to reappraise your long-term supply chain strategy. As Sandor Boyson of the University of Maryland pointed out in last month’s World Trade, multinational enterprises are becoming more risk averse in terms of protecting their key supply chain assets.

The intent is to maximize response capacity as the primacy of ‘import-centric’ supply chains, feeding components and goods into U.S. assembly plants and distribution centers, will increasingly be rivaled by ‘export-centric’ ones (40% of the revenues of the S&P 500 companies are currently earned abroad). Supply chain agility, the ability to exploit changing circumstances and emerging foreign opportunities without impairing profitability, will become a critical competitive differentiator.  

If the supply chain of the Wal-Mart era was a command-and-control approach designed to deliver a finite number of standardized mass products at minimum cost, the post-Wal-Mart supply chain can be expected to operate on a more flexible scale with increased emphasis on customized products for differentiated markets.