story by Kim Souza
There were hundreds of soundbites at Wal-Mart’s recent Year Beginning Meetings held in Orlando. But one that resonated with potential suppliers came from Michelle Gloeckler, senior vice president of the home category for Walmart U.S.
“We are now actively seeking suppliers like never before who can provide products made on U.S. soil,” Gloeckler said.
She issued a Request for Proposal (RFP) seeking suppliers who make or assemble patio furniture in the U.S. She said bulky items like furniture is costly to ship and adds to the retailer’s carbon footprint overtime.
“Making things closer to the point of purchase and shortening the shipping distance will lead to cost savings and environmental benefits, and it will help us solve the business problem,” Gloeckler said.
“So, we’re taking a new approach to patio,” Gloeckler wrote in her March 13 corporate blog during the retailer’s meetings with suppliers in Orlando. “We’re focusing on making patio furniture closer to your backyard, which will lead to valuable manufacturing jobs in your community.”
Gloeckler said obvious benefits to recruiting U.S. suppliers are the support for American jobs, but she also identified other benefits to Wal-Mart’s business, “like sales increases, product flexibility, improved in-stock and increased response time.”
Wal-Mart officials have said they remain committed to the onshore manufacturing initiative. Gloeckler said the retailer is already in talks with suppliers in 40 departments to find ways to manufacture on U.S. soil.
It’s been one year since Wal-Mart announced its commitment to invest $50 billion into American products by 2023. She recently noted that the 10-year timeline was necessary as the retailer works with more suppliers trying to onshore their manufacturing operations — a time-intensive endeavor. Gloeckler said the retailer is looking for categories like patio furniture that present certain business challenges when manufactured abroad. The plan is to guide such products toward the retailer’s U.S. manufacturing initiative.
Daniel Levin, CEO of Cain Millwork, recently told CNBC that it may make more sense to create new manufacturing jobs than try to bring old manufacturing processes back.
“If you need something in six weeks, you need to have it done here, not overseas and that is not changing anytime soon,” Levin said.
Phillip Koosed, CEO of BAMKO recently told CNBC that manufacturing is still a segment very much in decline and while the anecdotal stories of small manufacturing shops opening in the U.S. are nice to hear, they aren’t moving the needle forward. He too, would like see more corporate efforts going into innovation hubs than courting back old manufacturing jobs.
There were an estimated 12.065 million manufacturing jobs in the U.S. during February, 2014, slightly above the post-war February 1946 level of 11.922 million, but well the peak of 19.553 million in June 1979.
In an unexpected and unusual move, Wal-Mart announced a July 8 open call for suppliers manufacturing in the U.S. and for suppliers ready to pitch new products and new categories.
“We’re open to great products that will delight our customers, especially if they’re made right here at home. At the same time, we want our suppliers to reevaluate their business models with the U.S. in mind and look more closely at what’s possible,” Gloeckler noted in her blog.
Wat-Mart also is willing to play matchmaker in order to get more innovative contributions from its supplier base.
Walmart U.S. CEO Bill Simon said during the recent Year Beginning Meetings event that suppliers should bring their ideas forward as Wal-Mart may be able to match them with an innovator or entrepreneur.
Jason Long, CEO of Shift Marketing Group, said Wal-Mart is not just paying lip service with its commitment to source more U.S. made product as they are giving priority and preference to “Made-in-the-USA items.