Spend Matters giving Walmart kudos is like giving Al Capone a good citizenship award for supporting a soup kitchen by Jon Hansen

Posted on November 19, 2013


The great advantages of having access to a real-time industry news feed is that I can track everything – and I mean everything – that happens in the procurement world.  The benefit of course is that there is no shortage of both interesting and timely subject matter about which to write.

One such example is a November 18th post in the Spend Matters blog.

Obviously ignoring the data highlighted in my article “Public Sector Procurement and the Walmart Effect,” Spend Matters’ recently gave Walmart “kudos” for disclosing “supplier problems” in Bangladesh.

While you can certainly acknowledge and approve of Walmart’s initiative to audit 279 factories in an effort to address safety issues, how do you reconcile this effort with the predatory practices that have led to razor thin margins that threaten the very existence of suppliers.

Now you may say that one has nothing to do with the other and perhaps to a certain degree you would be right.  But . . . and there is always a but, seemingly noble efforts in one area of the business does not diminish the need to address serious problems in other areas.  Hence the Al Capone reference.

Al Capone Soup Kitchen

Al Capone’s Soup Kitchen (click image to watch video)

Even if you overlook Capone’s true motivation for funding the soup kitchen, the fact is that he financed this effort through what could only be called questionable business activities.  Similar to the undeniable benefits of the soup kitchen, Walmart’s attempt to use it’s considerable leverage to effect needed changes in third world factory safety, does not excuse the negative effect that its underlying business model has on suppliers.  Once again refer to the data in my earlier post.

The real question I have is why this aspect of the Walmart operation is not given more coverage.  Especially when you refer to yourself as being a “procurement and supply chain” blog, as Spend Matters does.

So here is my question to you . . . does the effort on the part of Walmart to address safety issues in overseas factories lessen the importance (and impact) of the company’s predatory practices relating to vendors in its global supply chain?


Posted in: Commentary