The Wal-Mart Effect by Charles Fishman

500: Typical number of jobs created by a new Wal-Mart Supercenter.

 

450: Typical number of retail-related jobs eliminated in a community 5 years after the opening of a new Wal-Mart Supercenter

 

It is headlines like the above that drew my attention one Sunday afternoon while browsing the business section of my local bookstore. Being in Supply Chain Management I thought reading about the biggest store and employer (1.6 million employees) in the world would be ideal to let me  into some of the secrets of Wal-Mart and its highly efficient supply chain and procurement. Well, reading this book, I soon found out that Wal-Mart is one of the most secretive companies in the world and maybe this is one of the reasons it has remained so successful. Wal-Mart has imposed a wall of silence around its operations and its relationship with  suppliers with the constant threat of losing business with Wal-Mart.

 

In his book, Fishman shows how Wal-Mart started from a small thrift store in rural Arkansas by Sam Walton and turned into the world's biggest company  (now 2^nd after Exxon-Mobile, due to the soaring oil prices) by providing inside stories and anecdotes from retired Wal-Mart executives and suppliers. We learn how Wal-Mart in the early 1990s demanded that suppliers stop boxing deodorant cans, creating an industry standard and saving many trees at the same time.  But also how the $2.97 gallon of pickles, nearly put its manufacturer, pickle-maker Vlasic, out of business.

 

Fishman, with the depth and breadth of his research tries to answer the question on everybody’s mind; Is Wal-Mart bad for America? Do suppliers, pressured by Wal-Mart’s slogan of “always lower prices” lay off employees and close down factories to open up new ones in China in order to reduce their prices and stay competitive? Fishman points out how Wal-Mart’s requests of manufacturers for yearly 5% cost cutting are difficult to resist, especially when Wal-Mart is your largest customer.

 

The Wal-Mart Effect is a fascinating book, and even though we don’t live within 15miles from a Wal-Mart store like ninety percent of Americans, its impact probably reaches our lives without us even realising it.