Walmart’s Supplier Management Creates Map of Accountability

Walmart’s Supplier Management Creates Map of Accountability

Walmart’s Supplier Management Creates Map of Accountability

walmart-supplier-management

Large and small retailers alike have a responsibility to sell goods that were safely manufactured.  As a leader in the industry Walmart has guidelines in place for its suppliers.  Walmart’s supplier management system sets the benchmarks and criteria for brands that sell through the retailer.  Suppliers are required to ensure certain protocols are in place in plants where products are manufactured.  These requirements are crucial because failure to comply could have deadly results.  Those types of results can be detrimental not only to the supplier but to Walmart.  The supplier management system was also put into place to safeguard Walmart (and its suppliers) from the PR nightmares.  These issues could have long term effects on profits and growth of Walmart and the supplier.

 

Suppliers and Supply Chains

Any brand that sells through Walmart must have a supply chain that must run like a well-oiled machine. To ensure that supply chains can run at an optimal level of performance, Walmart provides sellers with different tools.  These tools such as Retail Link, help brands ensure they maintain proper inventory levels and know when to order more product.  Supply chains also ensure product is shipped out correctly and in a timely manner.  Under supplier management, these supply chains must be protected and monitored.  Brands must ensure their inventory is coming from safe and reliable facility.  While it is important to keep costs down on the supplier’s products, it should be done in the name of safety.

Why Manage Suppliers

If a Walmart Supplier fails to monitor and responsibly source their products it places their business in a dangerous territory.  Problems such as aging equipment, over-crowded work space, and harmful chemicals are some of the issues facing responsible sourcing.

With many products being produced in countries outside of the United States it is hard for a company to manage everything in their supply chain. However, they can still be informed on what is happening in the areas their products are made. Before working with a production facility, a company can research what other brands have their products manufactured there.  Speaking to those brands in terms of time management, i.e. the turnaround time on production order to be fulfilled.  They might also have insight on workplace safety and what policies that are placed in effect.  If possible owners or managers of a brand should travel to the production facility and see it for themselves.  While some facilities may be cheaper than others in terms of production costs, keeping prices low should not come at the cost of safety.

Issues That Can Happen with Lack of Supplier Supervision

If parts of the supply chain are not properly safeguarded, there could by dire consequences.  Often times things such as what chemicals are being used to finish a product are overlooked.

What if these chemicals are cheaper yet harmful when breathed in?  Is breathing protection distributed to workers? Are they breathing them in?

These are areas of concern that manufacturers need to have answers to.  What if the chemicals used are highly flammable and cause a fire in a work space?  What if that space is over its capacity guidelines?

Loss of life could happen.  If that does happen who is responsible?  Where ever blame is placed, in the eyes of the consumer there is plenty to go around.  They will place responsibility on everyone from the stores to the producer who utilize those facilities.  In the past, these problems have played out in minute to minute news coverage all the way to made for TV movies.  Some names are forever linked to overseas child labor and facility fires that claim the lives of large numbers of workers. No amount of time passed has erased those moments.

What Walmart is Doing to Protect Themselves and Their Suppliers

Walmart commitment to sourcing their suppliers responsibly extends further then themselves, they expect the same from their suppliers.  One of the ways it does this is requiring full and transparent disclosure from its suppliers.  This is in regard to its facilities.   If Walmart or a supplier wants to source a product, they must do so only from Walmart authorized facilities.  Failure to do so on a brands end could mean a speedy termination of seller rights.

There are also life and safety requirements that facilities must adhere to.  Equipment must be in safe working order and regularly inspected.  Fire codes must be followed, that means proper emergency exits and safe zones around electrical equipment.  It also means that overcrowded work zones are not tolerated, the maximum capacity for a space is strictly enforced.  It also entails following the proper ways to handle chemicals being used in the plant.  These guidelines must be in place in the native language(s) of the workers.

There must also be resources available for factory workers who feel something is not right to make a report.  It is important that they feel they are in safe environment to do so.  They need to have no retaliation for speaking.  These resources must be available to them under some sort of anonymity.  Whether it be a toll-free number, email address or website, it must be provided to them.  Failure to do so is non-compliance with Walmart and could lead to a termination of selling via Walmart.

Auditing Suppliers

Walmart requires that audits be done to safeguard against labor law violations.  These violations include but are not limited to payment of hours worked and age requirements for working in a country/city.  It also encompasses workers who are working under their own freewill.  As well it ensures that workers are not working to much in one given day/time period.  These audits can be done at any time to ensure that protocols are in place. In order to be a Walmart Certified Supplier an audit must be done prior to acceptance.   Since these guidelines and safeguards are of the upmost importance to Walmart, they are continuously conducted to ensure safety of workers.