The Wal-Mart Effect

Here’s an interesting book on a business force which is changing the way that the US economy works, if you believe what the author is saying. Wal-Mart (which owns ASDA in the UK) has been growing like crazy in recent years, to the point where they’re big enough, supposedly, to have a direct impact on the inflation rate in a economy the size of the US.


One startling aspect of this exposé, is the effect that a company as powerful as Wal-Mart can have on its suppliers… normally reported as a bad thing, but there are good things too. An example of the latter was of one company who was shipping goods into the US, which were then taken to its own distribution centres, repackaged and sent out to Wal-Marts distribution chain, and then on down to the stores.

Once the two companies started sharing more detailed information with the other, Wal-Mart revealed that it was sending empty trucks back to its regional centre, from stores all over the country, which could be used by this supplier – so the supplier started importing its goods bound for Wal-Mart into Florida, and using Wal-Mart’s own trucks to ship the merchandise straight to their own distribution centres, thereby cutting out waste & expense.

It’s an interesting read – there may even be some parallels between Wal-Mart and Microsoft, some positive and others not. Microsoft’s Chief Operating Officer used to be Wal-Mart’s CIO, responsible for (among other things) one of the largest databases in the world, where Wal-Mart’s suppliers could see into the sales of their products across the entire distribution chain, as they happened… Quite some system…

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