Walmart

The Wal-Mart logo and slogan

Wal-Mart is America's largest private employer, running a chain of department stores. The company was founded by Sam Walton in Arkansas in 1962. Walton was a Christian and tried to make his store pro-family. The current Wal-Mart CEO is Lee Scott. Wal-Mart also owns the "Sam's Club" chain of wholesale stores and the "Asda" chain of superstores across the United Kingdom. It is headquartered in Bentonville, Arkansas.

Wal-Mart is America's premier example of free market economics

• when Wal-Mart opens its supercenters -- variety plus grocery stores -- in a community, the average grocery prices in that community fall by 13 percent. Even the people who don't shop at Wal-Mart benefit from its presence. [1]

Wal-Mart is often the subject of criticism for allegedly paying low wages with insufficient health benefits and allegedly forcing "Mom and Pop" stores out of business. It was also criticized for supporting homosexuality and for not dispensing abortion inducing drugs at its pharmacies. The company's defenders reply that Wal-Mart tries to uphold a family value system and is a well-known provider of decent employment and affordable merchandise across America and the rest of the world. Wal-Mart's wages average significantly higher than minimum wage, which may explain why nearly 2 million people choose to work for Wal-Mart.

It has also been criticized for selling imports of products manufactured in China despite the fact that most other retailers also sell Chinese imports. Wal-Mart has asked Premiere Radio Networks not to air its commercials during The Rush Limbaugh Show.

Wal-Mart in the U.K.

Wal-Mart entered the U.K. in 1999 following its purchase of the Asda supermarket chain, taking over around 300 stores which remain under the Asda brand name. Wal-Mart's performance, however, has failed to meet Wall Street's expectations, and its 16% share of British grocery spending has not changed over the last eight years, partly because of the company's inability to pursue its usual expansion strategy of oversaturating markets. In the United States Wal-Mart has driven its growth by building massive superstores that dwarf all of a town's existing businesses combined and that are spaced relatively close together across a region. This strategy has enabled Wal-Mart to overwhelm local economies and force out tens of thousands of small businesses through over-development.

The company's U.K. logo

Wal-Mart has had more difficulty employing this tactic in the U.K. due to the legislation known as "Planning Policy Statement 6" (PPS6), which requires local governments to keep retail development in town centers and to limit retail development on the outskirts unless there is a clear, well-defined need. Wal-Mart has lobbied heavily for the removal of the "needs test".

In 2006 Asda-Wal-Mart were ordered to pay $1.66 million for breaking U.K. law by offering illegal inducements to workers to quit a trade union. Around 340 drivers and warehouse staff at a distribution depot in the north-east of England were offered a 10% pay rise if they left the union. The members rejected the offer. A court established that the legislation had been breached and the company was ordered to pay every worker at the depot almost $5000 each in compensation.

In December 2007 Asda-Wal Mart was one of several companies that were fined over $225 million after admitting that they fixed the price of milk, cheese and butter in a scandal estimated to have cost U.K. consumers about $526 million.

Political Contributions

Wal-Mart Stores Incorporated and its employees generally favor Republican candidates in terms of campaign contributions. In 2012, 53% of donations from the company (including employees) went to Republican candidates, vs. 47% to Democrats. 100% of major contributions from Wal-Mart Pharmacy associates went to Republican candidates in 2012.

"Kanban" Just in Time: Interdependent Fragility of the Wal-Mart Distribution System

The Wal-Mart chains of supply are lengthy and fragile. The Wal-Mart model is based on a "just in time deliver" or "JIT" or "Kanban" as the Japanese inventors called it in the 1960s. The JIT inventory control of the retail and food distribution system is both interdependent and fragile.

Wal-Mart is proof that we live in a fragile society. The kanban or "Just In Time" inventory system was developed in Japan and became popular in America starting in the 1970s. It is now ubiquitous in nearly every industry. The concept is simple: Through close coordination with subcontractors and piece part suppliers, a manufacturer can keep its parts inventory small. Kanban is a key element of lean manufacturing. Manufacturers order batches of parts only as needed, sometimes ordering as frequently as twice a week. Companies now hire Six Sigma consultants and Kaizen gurus, they buy sophisticated data-processing systems, and they hire extra purchasing administrators, and these expenses actually save them money at the bottom line.

Just In Time inventory systems have several advantages: less warehouse space, less capital tied up in parts inventory, and less risk of parts obsolescence.

The downside is that lean inventories leave companies vulnerable to any disruption of supply, for instance in the food distribution system or food production system. If transportation (UPS, post office, Fedex, trucks, ships, railroad, and airplanes) gets snarled due to a trucker strike or bad weather or a disaster, or if communications get disrupted, or a parts vendor has a strike or a production problem, then assembly lines grind to a halt. Just one missing part means that no finished products go out the door.

The kanban concept has also been taken up by most of America's retailers (with Wal-Mart leading the way), most notably its grocery sellers. In the old days — say, twenty years ago — grocery stores had well-stocked back rooms, with many extra cases of dry goods. But now in most stores the back room has been replaced with just a pallet-breakdown area. Merchandise comes in from distribution centers and it all goes immediately to the consumer shelves out front. Thus, what you see on the grocery store shelf is all that the store has on hand. What you see is what you get. The barcode scanners at the checkout counters feed a complex reordering system. If Mrs. Jones buys three jars of pasta sauce, that could trigger a reorder for three more jars. As long as communications and transportation work smoothly, then the entire system hums along like a Swiss watch. But what happens when the transportation infrastructure gets disrupted? Panic buying can clean out supermarket shelves in a matter of hours. The important lesson in all this is to get prepared in advance. Do not count on being able to buy anything to provide for your family on or after a disaster, or worse such as SHTF or TEOTWAWKI.

Threats to the "Wal-Mart" system of distrubtion

Some examples of threats to the Wal-Mart style good and food distribution system include:

• Trucker strike
• Labor union strike
• Prices of a barrel of crude oil and hence the price of gasoline and diesel
• Man-made disasters such as war and terrorism
• natural disasters such as storms, tornados, hurricanes, earthquakes, etc.

See Also

• Food distribution system: transportation (trucks, ships, railroad, and airplanes), warehousing (such as Amazon.com, Costco), and retail facilities such as Wal-Mart and supermarkets) which move food from the food production system to consumers.
• Systems of support
• Alternative systems of support
• Food Production System: Modern industrial big Agri-business versus Permaculture
• Investing in tangibles
• Preparedness movement and Survivalism

External Links

• Corporate website
• Wal-Mart retail website
• Sam's Club website
• ASDA website