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May 07, 2018 02:00 AM

Walmart says reshoring goals largely on target

Steve Toloken
Assistant Managing Editor
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    Joe Wilssens
    Cindi Marsiglio, vice president of merchandise execution and U.S. manufacturing for Walmart Inc.

    Walmart Inc. says it's substantially on target to meet a 10-year goal of boosting what it sources from U.S. manufacturers by $250 billion.

    The company made the commitment in 2013, and an executive speaking at NPE2018 on May 7 said the company is pushing ahead with its efforts.

    "It literally is the midpoint of this 10-year initiative and we are very close to our original glide path," said Cindi Marsiglio, vice president of merchandise execution and U.S. manufacturing for the company's U.S. operations. "I would say we are about 90 percent to where we anticipated ourselves being to that conceived goal. We've done pretty good, but we have more work to do."

    Speaking at IHS Markit's Plastics Industry Insights conference at NPE, Marsiglio also detailed a policy paper Walmart released in mid-2017 to help boost U.S. manufacturing, and outlined steps the company takes to work with suppliers in the United States.

    "There is no magic bullet," she said. "It really is item by item, category by category, factory by factory."

    Beyond working individually with companies, those efforts include hosting an annual event at its Bentonville, Ark., headquarters that brings in 500 U.S. manufacturers a year to pitch products.

    The company is focused on being a low-priced retailer — "our first obligation is to save the customers' money" — but she said within that strategy her team constantly works with suppliers to identify products that could be made in the United States.

    "We spend a lot of time working on the reshoring and onshoring movement and connecting the dots, particularly for smaller retailers," she said. "Selling more of what's made here is a much bigger impact of that $250 billion."

    She told the forum that two-thirds of what Walmart purchases to sell in the United States is made, assembled, sourced or grown in the U.S., a figure that includes groceries.

    She said that number sometimes surprises people, who might assume a higher percentage of Walmart U.S. purchases would be imports.

    But she declined to specify if Walmart's $250 billion commitment would increase its domestic sourcing above that two-thirds level. In an interview after her speech, she said it depends on too many other factors to specify a percentage that the group can meet.

    "It's really tough to say we're going to go from two-thirds to a different percentage, because honestly it depends on how we perform as a company over the 10-year time," she said.

    Her speech was also designed to highlight Walmart's 2017 white paper, "A Policy Roadmap to Renew U.S. Manufacturing," which called for changes in government policy across four broad areas: workforce, financing, regulation and taxes and trade.

    The paper estimated that in some product categories, significant amounts of goods currently imported could be made in the U.S.

    Citing an analysis prepared for Walmart by Boston Consulting Group, the retailer estimated that about $300 billion of the current $650 billion the U.S. imports each year in consumer goods like furniture, cookware and sporting goods could be made in the United States.

    The report outlined several specific steps governments could take, such as linking vocational training more closely to local industries, and adopting tax incentives and other policies that reduce the cost on industry to upskill workers.

    It called for things like encouraging the growth of component production in the U.S. and building more manufacturing clusters. And it called for harmonizing manufacturing regulations across different levels of government.

    Some parts of the company's made in the U.S. push have impacted the plastics industry.

    Walmart's policy roadmap noted that research into new injection molding technology is one area that received money under a three-year, $10 million research initiative it helped to fund.

    And the company says on its website that plastics home and outdoor goods maker Lifetime Products in Clearfield, Utah, benefited from the company's push.

    It said it reached agreement in 2014 with Lifetime to reshore production of patio furniture to the U.S. from China, and that "allowed the manufacturer to establish new production facilities" in Tennessee.

    Marsiglio told the forum that the company continues to push ahead.

    "I feel very optimistic about what we have in place in our business," she said.

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