Wal-Mart to buy MORE from overseas?
WSJ.com – Wal-Mart Sticks With Fast Pace Of Expansion Despite Toll on Sales
From today's Wall St. Journal:
Wal-Mart is striving to bolster its returns by buying more goods directly from overseas and paring its inventory costs by billions of dollars.
They're going to buy MORE from overseas? Not good for American manufacturers. If Wal-Mart wants to hold LESS inventory (at their massive distribution centers), shouldn't they buy from American manufacturers with shorter lead times? Shorter lead times clearly means less inventory.
Nope, they're too far down the China path.
Re-vist “The Man Who Said No to Wal-Mart” and Bill Waddell's posts on Wal-Mart's “war on American manufacturers” over on the Evolving Excellence Blog.
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You are correct that they would hold less inventory with a more local supply chain, but Wal-Mart won’t hold the inventory cost. They will push it back to the vendor. This is not a Lean move. This is a blunt force push of the value of the inventory back to the vendor and the further delay of the transfer between companies, not partners, in a mostly one-sided win. Many American companies are walking away from contracts with Wal-Mart and Sam’s, because there is little or no financial motivation.