Wal-Mart

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The Wal-Mart logo and slogan

Wal-Mart is America's largest private employer,[1] 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[2] 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[3] 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.[4]

Contents

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.[5] 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.[6]

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.[7]

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.[8]

"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 delivery" or "JIT" or "Kanban" as the Japanese inventors called it in the 1960s[9]. 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.[10]

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.

Threats to the "Wal-Mart" System of Distribution

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

Wal-Mart: America's Largest Arms Trader

In general a strong supporter of the Second Amendment, Wal-Mart is America's largest firearms retailer or "FFL" (Federal Firearms Licensee) due to the shear number of its mostly rural and suburban stores that sell rifles and shotguns and "ammo". Wal-Mart is famous among "gun nuts" (gun enthusiasts) for the lowest price on ammunition ("bullets" in laymen's terms).[11]

See Also

External Links

Walmart.jpg



References

  1. Christian Science Monitor. Wal-Mart: world's largest company
  2. "Wal-Mart launches gay-friendly initiative" August 21, 2006
  3. Is Wal-Mart good for America?
  4. Thinkprogress.org
  5. Planning Policy Statement 6: Planning for Town Centres Planning Portal. Accessed 22 January 2008
  6. Asda fined for trying to make workers quit union The Guardian, 11 February 2006. Accessed 22 January 2008
  7. Supermarkets fined for price fixing The Guardian, 8 December 2007. Accesed 22 January 2008
  8. Wal-Mart Stores: Totals. Opensecrets.org. The Center for Responsive Politics. Retrieved on 2012-12-05.
  9. The Japanese invented the "just in time delivery" or "JIT" inventory control system called "kanban" in Japanese.
  10. Christopher Steiner, 20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better, http://www.amazon.com/20-Per-Gallon-Inevitable-Gasoline/dp/B0046LUJCS Accessed December 15, 2014
  11. Ammohaulics Annonymous, Calguns.net, http://www.calguns.net/calgunforum/showthread.php?t=902274&highlight=walmart Accessed December 15, 2014, Wal-Mart Milpitas ammo in stock! http://www.calguns.net/calgunforum/showthread.php?t=544052&highlight=walmart+milpitas http://www.calguns.net/calgunforum/showthread.php?t=714078&highlight=walmart+monterey
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