• 2007-04-02

    Smart Walmart


      I wrote the following article(essay) modeled after the ones written by James Surowiecki in New yorker's Financial Page column,in style I mean.Trying to "dumb down" and "spice up" high and boring material and tranform it into readable and thought-provoking piece with the finest possible clarity.I've been enjoying reading Surowiecki's pieces over the years,not missing a single piece on New Yorker magazine.It's my sincere hope that I catch the essence of his style of writing, or at least could write an article that could be 30% intriguing as those of James'.

    Here goes:

    Smart Walmart

    by Dane Cao   as mentored by James Surowiecki of The New Yorker

    Walmart has made the decision to recognize the ICTI certification effective immediately.This apparently spells good news for some of the suppliers here in China who have long become ICTI-certified but still have to comply with a separate set of rules stipulated by Walmart in order to be eligible to supply to the world’s largest retailer.Since there are some rules in those two systems that apparently overlap, it’ll substantially streamline the supplier-compliance process and greatly relieve the burden of some Chinese suppliers,most especially those who have first chosen to align their practices with ICTI system.The decision by Walmart,the world’s largest retailer has been long overdue.Double or repeated certification is a waste of time and resources and serves the interests of no party.Suppliers obviously will have to allocate more people,time and resources to try to prove basically the same thing:They are good manufacturers and are eligible to supply to Walmart,or other other mega retailers for that matter.Nor does Walmart gain any benefit from the certification red tape.Some potential suppliers are sent reeling by the upcoming compliance “ordeal”, and in all likelihood will choose not to commit.That translates into an otherwise qualified supplier missing from the big pool of suppliers Walmart has long relied on to maintain its “low price,everyday” promise.One might not sound like much,but how about one hundred,one thousand, and more? If this unfair and excessive compliance practice is left unchecked, it will not be surprising to see  enough suppliers flee to make a huge negative impact on walmart’s legendary bottomline.Walmart is the top dog all right.But without tens of thousands of under-dog suppliers,it will wither for sure.   Howerver,to scrap the repeated certification practice doesn’t mean that eligibility contest will get less fierce.It will only get fiercer.The latest walmart decision just sends a reinforced signal for  a stance Walmart has taken for a long time: Walmart will tolerate and accept no practices that fall short of the international standard.If the former practice is being excessive,the remaining structure is still being extremely exacting.ICTI certification doesn’t grow on trees.   So Chinese suppliers still have to be strict in their manufacturing practices.For even though they don’t have to worry about walmart’s hair-raising conformity practice,they still have to ensure they are in compliance with ICTI,which is not known for being supplier-friendly.  And it’s a good thing in the long run.Competition would winnow out the weakest,and the most rigorious rules will turn out the strongest survivors.  Consumers are at a position of no loss.Either way,they manufacturers have to make sure the products they are shipping out are strictly up to standard.