Wal-Mart issues supplier mandates. What can other retailers do to keep up?

November 5th, 2008

When we launched SafeSourcing Inc

When we launched SafeSourcing Inc, beyond quality e-procurement tools, product safety and a social consciousness relative to the environment were and continue to be two important key stones to building this company.

In this case, we may be specifically discussing Chinese suppliers as it relates to Wal-Mart, but this is not new information for the world’s largest retailer by revenue. Last year they held suppliers accountable to level one certification of the Global Food Safety Initiative or GFSI by July of 2009.

According to the Wall Street Journal on October 22nd, during its global supply chain summit held in Beijing, Wal-Mart would indicate that it is also focusing on environmental and labor laws in its Chinese locations in addition to their safety focus.

It is well known that Wal-Mart is one of the most technologically advanced companies in retail if not the world. So when Wal-Mart makes claims as to what it will do, suppliers generally line up to comply. The issue this creates for other retailers is that without the tracking technology a Wal-Mart has they can not keep up with what suppliers have done or plan to do to support the many emerging standards. And more importantly, retailers do not have a readily available view of alternative sources of supply where they might take their business if these important conditions are not met by their present suppliers.

Wal-Mart is also expected to require it’s suppliers to provide the name and location of every factory they use to make their products. As a by product, this is a great step to support 10 + 2 and one forward one back traceability for products that leave China particularly for North America.

An alternative for North American based retailers is the supplier databases that are offered for their use by supply chain; spend management and other e-procurement companies with whom they already do business. At SafeSourcing, our North American Supplier Database includes over 240,000 retail suppliers that are held accountable to twenty eight safety and environmental certifications such as Keep America Beautiful, SQF, Eco-Logo and GFSI. These tools should be made available via cloud computing or in the form of software as a service (saas) on a subscription basis for both individual searches and periodic use. If your provider can not demonstrate these tools, it might be time to look elsewhere.

We look forward to an appreciate your comments

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