Wal-Mart's initiative to stock its shelves with more American-made products comes with challenges.
Existing suppliers moving production back to the United States are faced with re-configuring their supply chains. Companies with products not previously sold to Wal-Mart are evaluating how to reach the needed price points to satisfy the retailer.
Finding ways to answer those challenges and other concerns was among the chief reasons that Wal-Mart gathered executives, suppliers and government officials at a manufacturing summit Thursday in Denver. The 1,400 attendees represent 42 states. Wal-Mart held its first summit last year in Orlando, and this year's event has expanded from about 300 meetings to 400.
Wal-Mart has committed to buying $250 billion in American-made products through 2023.
"It's a journey with a destination of a recharged economy," said Michelle Gloeckler, executive vice president of the consumables division and U.S. manufacturing lead for Wal-Mart U.S.
Wal-Mart's initiative includes increasing orders from existing U.S. suppliers, finding new U.S.-based suppliers and helping those who manufacture outside America assess if it makes economic sense to operate here.
Wal-Mart CEO Doug McMillon said that by creating more jobs in United States, Wal-Mart was also seeking to increase its customer base.
"We have so many stores here, and we want customers with great jobs," McMillon said. "There are lots of practical benefits."
Among the ways Wal-Mart is seeking to bolster American companies is through a research grant partnership with the Wal-Mart Foundation and the U.S. Conference of Mayors. Awards totaling $4 million were announced Thursday, part of a $10 million commitment over the next five years. Winners were selected with a focus on tooling for injection molding, small motor assembly and textile dying/sewing.
Wal-Mart U.S. President and CEO Greg Foran, who was announced last month as the replacement for Bill Simon, briefly addressed attendees in his first public speaking appearance as CEO. Foran said little about the initiative on U.S. manufacturing, a cause that championed by his predecessor. He did encourage manufacturers and others in attendance to reach out to him with ideas.
"My door is open," Foran said. "I actually did something I may regret doing, I gave my email address to 5,000 store managers. ... My inbox is already filling up with ideas."
Among the Wal-Mart suppliers to address the summit was Michael Araten, president and CEO of the Rodon Group and K'Nex Brands, which produces a number of toys including Lincoln Logs. He said that manufacturers weren't going to return to the U.S. overnight, and said Rodon had been working for five years to get 95 percent of its work done in the U.S.
New suppliers should start small, first selling on Wal-Mart.com, Araten said, before branching out regionally and then into all stores.
"It doesn't happen in a day," Araten said.
Business on 08/15/2014