Wal-Mart Stores Inc. is opening its war chest to more U.S. suppliers.
Wal-Mart on Tuesday held its first open call for U.S. vendors at the company’s Bentonville, Ark., headquarters. The retail giant is armed with $250 billion to spend over 10 years on products made in the U.S. Wal-Mart’s deep pockets drew to the open call more than 500 suppliers who scheduled 800 meetings with more than 175 buyers from Wal-Mart U.S., Sam’s Club and walmart.com.
“We believe we have the opportunity to make jobs in your communities,” said Bill Simon, president and chief executive officer of Wal-Mart U.S. “Changes in the cost of energy and transportation and all the variables that make up manufacturing are swinging in the direction of the U.S. It’s more efficient and effective to manufacture here now.
“We made a commitment to buy an additional $250 billion in 10 years,” Simon continued. “About two-thirds of what we buy already is made or grown in the U.S. American business has always been the growth engine of the economy in the U.S. After six years of moving sideways, it’s time for renewal. We can’t wait for programs or policies. We have to more forward. We’ll see growth in areas and markets where we haven’t seen growth in many years.”
Simon said Wal-Mart will cultivate American-made products through reshoring, expanding orders with current suppliers and working with new suppliers. “This is the first time we’ve ever done this,” Simon said of the event. “We’ve never opened our doors and made our buyers available in an open-call sort of way. We’re going to buy some stuff today.” About half of the 500 suppliers that attended the open call are new to Wal-Mart.
Simon noted that other retailers are following Wal-Mart’s lead. “We see other retailers moving into the same space and we like that,” he said. “This is not a Wal-Mart issue; it’s not a supplier issue; it’s an American issue.”
Michelle Gloeckler, executive vice president of the consumables division and U.S. manufacturing lead for Wal-Mart U.S., said the most competitive U.S.-made products “are made of raw materials that are available here, such as cotton, plastics and metals. Also, goods with highly automated product processes and items that are inefficient to ship are competitive.
Gloeckler said Wal-Mart’s role is that of a facilitator. “Our role is to lead,” she said. “We have diverse ways of reaching our consumers. There’s Wal-Mart stores, Sam’s Club, walmart.com. We’ve been working to integrate our digital assets with our physical assets.
“We asked our buyers to be more flexible and asked them to understand your production output,” Gloeckler told suppliers. “Maybe you can’t produce the supply for 4,000 stores. Maybe we can [help you] look at things differently. For folks that are reshoring, it takes capital to buy or lease a building and bring in machinery. We’ve done multiyear agreements to give people the certainty to invest here in the U.S.”
In the afternoon, Gloeckler called the open call a success and said Wal-Mart had made commitments to products such as sweaters, toys, home goods, kitchen items, shampoos, flashlights and inventions.
Apparel and textile production is a key part of the made in U.S. manufacturing initiative. Gloeckler said softlines executive vice president Andy Barron told her that “there were some significant [apparel] presentations during the day. We previously announced a lot of reshoring of socks and simple textiles.”
Wal-Mart launched a $10 million, five-year manufacturing innovation fund focused on textiles, dying and automated cut-and-sew. On Aug. 14 and 15, Wal-Mart will host its second manufacturing summit in Denver. “Suppliers in the last 18 months told us they’re having difficulty finding component parts,” Gloeckler said. “Factories with capacity and flexibility can display those parts in a trade-show format at the summit and suppliers can find them. We think it will rejuvenate the supply chain.”
Duncan Mac Naughton, chief merchandising and marketing officer, told suppliers that Wal-Mart’s core customer is a mom shopping for her family. “She’s leveraging her budget with us,” he said. “She’s changing and changing fast. She’s looking to buy products anywhere using digital or e-commerce. We’re looking for items that drive top-line sales. We also want exclusive breakthrough innovations. We have to win on price. If your offer is not competitive, we’ll tell you.”
Because the lead time for U.S.-made goods is shorter, Gloeckler said products finished now could be on store shelves in 60 days. Products purchased by walmart.com will be on the Web site even sooner. Walmart.com on Tuesday launched a new Made in the U.S. online shop. “We’re working with suppliers to highlight on the front of the package that the product is made in the U.S. We’re seeing more awareness of Made in America,” Gloeckler said.