The Darwinian struggle for global manufacturing orders

Sometimes, I just like the way the British phrase things, as this sentence which started an article on sustainability in the Financial Times that I read while in London. Here, they were calling out the “Wal-Mart Price” which demands extreme cost cutting in every area possible to meet the demands of the global giant.

In Beijing last week, Lee Scott – CEO of Wal-Mart, spoke at a “sustainability summit” which was highlighting the vast Wal-Mart supply chain and their initiative to use their purchasing power to raise environmental standards throughout China. It is being called the most ambitious private sector effort to reduce waste and pollution in the country, to date.

It looks like Wal-Mart will be enforcing some of these new programs with the use of eSourcing technology, on top of it all.

In the US, the retailer has embraced a series of environmental initiatives over the past three years, including developing solar power systems and promoting more sustainable products such as, low energy light bulbs. This year, it introduced a packaging scorecard that evaluates the efforts of suppliers to reduce waste, which is now being translated in Mandarin.

Environmental groups are lauding the effort with some skeptics thinking this will just be added to the agenda (and cost structure) while they demand YOY cost reductions from suppliers.

At the very least, in emerging countries, the government will not be the ones to take corrective action of companies that cut green corners. It takes the end consumer to enforce change. It looks like Wal-Mart is making these efforts, probably based on the climate of customers which are, in turn, demanding it.

Still quiet here.sas

Leave a Response

*