Excerpts from
www.wal-mart.com:
Employment Overview
"Fact: More than 1.2 million Associates work at Wal-Mart in the U.S. The majority of Wal-Mart's hourly store associates in the U.S. work full-time. That's well above the 20 - 40 percent typically found in the retail industry. We are a leading employer of Hispanic Americans, with more than 139,000 Hispanic associates. Wal-Mart is one of the leading employers of African Americans, with more than 208,000 African-American associates. More than 220,000 of our associates are 55 or older. We project we will create positions for more than 100,000 new jobs in 2005."
"Benefits
Fact: Wal-Mart offers affordable health care benefits to our associates. We work hard to offer good, affordable coverage to our people. Historically, Wal-Mart has paid about two-thirds of the cost of the Associates' Medical Plan. We insure more than 568,000 associates and more than 948,000 people in total, who pay as little as $17.50 for individual coverage and $70.50 for family coverage bi-weekly. Unlike many plans, after the first year, the Wal-Mart medical plan has no lifetime maximum for most expenses, protecting our associates against catastrophic loss and financial ruin.
Today, we offer eight health care options, plus HMOs in some areas. We have different deductibles to meet individual needs.
Associates also have access to world class healthcare at the Mayo Clinic, Stanford University Hospital, Johns Hopkins University Hospital and many other leading health care facilities without insurance approval.
In recent years, Wal-Mart has contributed 4 percent of an associate's eligible pay to the combined Profit Sharing & 401(k) plan. Our hourly associates, just like our management and executive associates, receive bonuses and other incentives for helping the company achieve its goals. In FYE 2005, we spent $4.2 billion on benefits for our associates."
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Some seem to be critical of Wal-Mart to the point of actually accusing Wal-Mart of causing or perptuating the off-shoring of manufacturing. Wal-Mart officials correctly insist that they are much better off if they can buy merchandise made in the US. David Glass, Wal-Mart CEO from 1988 - 2000 is quoted in Thomas Friedman's book "The World is Flat" as follows:
"I spent two years going around this country trying to talk people into manufacturing here. We would pay more to buy it here because the manufacturing facilities in those towns would create jobs for all those people who shopped in our stores. Sanyo had a plant here [in Arkansas] making televisions sets for Sears, and Sears cut them off, so they decided they were closing the plant and going to move part to Mexico and part to Asia. Our governor asked if we would help. We decided we would buy television sets from Sanyo if they would keep the plant in Arkansas, and they didn't want to do it. They wanted to move it, and the governor even talked to the Japanese owning family to try to persuade them to stay. Between his efforts ours, we persuaded them to do it. They are now the world's largest producer of televisions. We just bought our 50 millionth set from them. But for the most part people in this country have just abandoned the manufacturing process. They say, 'I want to sell to you, but I don't want the responsibility for the buildings and employees and health care. I want to source it somewhere else.' So we were forced to source merchandise in other places in the world."
Wal-Mart has done one thing extremely well: it has optimized its supply chain. It has focused relentlessly on three things:
1) working with manufacturers to get them to cut their costs as much as possible,
2) working on its supply chain from those manufacturers, wherever they might be in the world,, to Wal-Mart's distribution centers, to make it as low-cost and frictionless as possible, and
3) constantly improving Wal-Mart's information systems so it knew exactly what its customers were buying and could feed that information to all the manufacturers so the shelves would always be stocked with the right items at the right time.
In many ways, Wal-Mart has taken a page from the Sears, Roebuck and Company 1950's - 1960's playbook and implemented it worldwide using modern computer and communications technology. In fact, any DP forum participants that are old enough and that might have attended Harvard B School, might recognize the similiarities from some classic B school case studies of years past. In the years following WWII, Sears assembled a stable of suppliers of various goods, goods ranging from appliances to clothing, that Sears would purchase and sell under Sears own brand name (e.g., Kenmore, Allstate, Silvertone, Roebucks, etc., some of which are still in use today). Sears soon became the dominant customer to these manufacturers, and as their dominant customer, began dictating rather than negotiating terms of purchase. (Like the Ft. Smith, Ark., TV mfg. mentioned above). Sears studied their supplier's businesses until Sears knew to the penny what the suppliers cost of production were. Sears always allowed the manufacturer to earn a fair, but absolute minimum, economic profit. In that way, Sears growth far outpaced that of its nearest rival, Montgomery Ward, and eventually grew to be the world's largest retailer -- until Wal-Mart came along, that is.
Are some criticisms of Wal-Mart justified? You bet. One can only hope that there is now recognition at Wal-Mart that there is a fine line between a hyper-efficient supply chain that is helping people save money and improve their lives and one that has pursued cost cutting and profit margins to such a degree that whatever social benefits it is offering with one, it is risking taking away with the other.
