From the Desk of Jack Healy
Reshoring Opportunities: Walmart Leads the Way
|Jack Healy –
The Voice of Manufacturing in Massachusetts
By Peter Russo, MassMEP Innovative Growth Solutions Project Manager
There is a toll when manufacturing is pushed offshore, as documented in this NY Times article, "The Human Toll of Offshoring." The good news is that there is no longer any doubt…we can respond with a resounding "Yes!" when asked whether we see manufacturing coming back to the U.S.
We can start by pointing to Walmart's initiative to source $250 billion dollars in additional items from American producers over the next decade as a prime example. This unique initiative gives priority to U.S. manufacturers who hire American workers to produce the many and varied products that Walmart sells. This major effort tells us that Walmart considers the restoration of American jobs as essential for Walmart's future success.
In the following article, MassMEP Project Manager Peter Russo describes the opportunities offered for consumer products manufacturers at Walmar's recent Manufacturing Summit.
Walmart is Jump-Starting the "Made in the USA" Movement
By Peter Russo, MassMEP Innovative Growth Solutions Project Manager
Yes, you heard that right. Walmart has announced $250 billion in incremental purchases over the next ten years! Two questions come to mind.
- Is this for real?
- How do I get a piece of the action?
Having just returned from the Walmart Manufacturing Summit in Denver on August 15, 2014, I can tell you it is very real. 41 state governments and over 100 component part manufacturers set up 10-foot booths to show their commitment and capabilities. Hundreds of other manufacturers and agencies participated in discussions and seminars. The atmosphere was energized with the desire for networking and collaboration.
The common theme was how to work together to increase the manufacturing capabilities and offerings of U.S. manufacturers. The obvious immediate driving incentive was to secure business with Walmart and some of that pledge for $250 billion in purchases.
Sure, those here found themselves falling under the spell of Walmart's amazing presentations and company vision, but we were also impressed by what appears to be a sincere belief that Walmart's overall goal is to support a concept far greater than corporate gain.
Walmart believes it can help create a movement that generates American jobs by supporting more American manufacturing. They expressed their belief that jump-starting the manufacturing industry and rebuilding the middle class requires a national effort by companies, industry leaders, lawmakers, and others.
Walmart is reaching out to all these groups to join the effort. I resist the temptation to be cynical and instead embrace Walmart's invitation and of course its commitment to buy an additional $250 billion in American products. (See details at http://corporate.walmart.com/global-responsibility/us-manufacturing)
Walmart's incremental spending will be achieved by working with suppliers to:
- Increase what they already buy of U.S. manufactured goods.
- Source "new to Walmart" U.S. manufactured goods.
- Re-shore the manufacturing of goods they currently buy by facilitating and accelerating efforts of their suppliers.
Walmart's Major Activities to Date
2014 U.S. Manufacturing Summit in Denver on August 14-15th. This summit was designed to go to the next stage in this movement and invite others to be the drivers and not just rely on Walmart to create discussion.
Walmart had six educational sessions. Steve Graham, the owner of Toner Plastic and a MassMEP client was a speaker at the opening session "How I Made it Work." (See Toner Plastic's "Made in America" story here.) Walmart's Senior Director of U,S, Sourcing and Manufacturing, Judi Wetsell, stated that Steve Graham and Toner Plastic's Wonder Loom project is a key example used internally of "Speed to Market."
Another highlight of the day was Governor Nikki Haley, via webcast, live from South Carolina at the new Element Electronic facility. This facility was announced with Haley in March of 2013 and in just 18 months was equipped and now employs 500 people showing the effectiveness of private business, government and Walmart working together on a common goal. (See the VIDEO at http://news.walmart.com/events/2014-us-manufacturing-summit)
Walmart has publicized select extended term contracts (up to 3 years) with companies to allow them to think longer term and consider new equipment and processes to maximize competitiveness. This will be a huge incentive to make changes that may drive efficiency.
Walmart announced that its foundation has awarded $10 million in manufacturing research grants. Grants were given to universities to help advance manufacturing in three areas they feel will change US capabilities:
- Tooling and injection molding
- Small motor manufacturing
- Textile dye, cutting and sewing
Finally, Walmart is teaming up with P&G and others to run feel great, informational Made in America commercials that fall between "Hallmark" tear-jerkers & Budweiser Americana style. This will provide awareness and education of the manufacturing movement to the masses.
Made in USA Open Call Event on July 8, 2014. Over 800 companies were seen at the headquarter offices in Bentonville and deals or discussion continue with a third of these companies. Walmart found many of these companies need assistance in gaining additional knowledge and capabilities to supply Walmart.
2013 U.S. Manufacturing Summit held in August 2013. 500 suppliers, 34 states, 8 governors and government officials met to discuss opportunities to create jobs, restore communities, and drive economic growth.
How to Get Involved Today
Register on Walmart's new manufacturing portal. See http://walmart-jump.com or contact Peter Russo at the MassMEP for assistance, email firstname.lastname@example.org. This portal allows manufacturers, component suppliers, packaging companies, trade groups, governments, and store resource suppliers to interact. The portal provides the ability to:
- Keep up-to-date: Receive updates about Walmart's U.S. Manufacturing Initiative. Access Walmart's U.S. Manufacturing Initiative content.
- Propose Products: Review knowledge base and support documents to help ensure a successful product proposal. Submit your proposal for US sourced items through JUMP.
- Network: Join a network of organizations focused on bringing jobs back to the U.S. Communicate capabilities with component parts supply or contact manufacturing.
Call MassMEP to discuss this and other opportunities for growth and innovation. MassMEP believes there is some element to every manufacturer's business that can create opportunity for innovation and growth. If a manufacturer has identified this element then MassMEP will assist in its realization. If a manufacturer does not yet have a target then MassMEP will help lead the discovery.
About Peter Russo
Prior to joining the MassMEP, Peter Russo owned and operated a development company for 21 years creating, designing, engineering, packaging, and launching over 200 SKUs into Walmart stores. Peter is a Project Manager at MassMEP and can be reached at email@example.com
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