From the Blog

FABTECH Q&A with Walmart’s VP for U.S. Manufacturing

As many of you might know, Walmart has committed to spending $250 billion dollars over the next decade on U.S .made products.  This effort will create thousands of manufacturing jobs, and will create new business for both existing and new Walmart suppliers. Cindi Marsiglio, Walmart’s vice president for U.S. manufacturing will offer keynote remarks at this year’s FABTECH show on Tuesday morning at 9:00 AM.  In her presentation, she’ll discuss Walmart’s work to engage hundreds of suppliers and manufacturers in an effort to overcome the complex challenges of bringing valuable jobs back to the United States.  She’ll explain why this work is extremely important, both in terms of rebuilding the middle class, and providing customers with the best possible prices and quality. Cindi was nice enough to participate in a special Q&A for our blog to give us a preview of her keynote.  Check it out:
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Cindi Marsiglio

Can you tell us about your job as Walmart’s VP for U.S. Manufacturing? My role is to facilitate and ensure progress toward our U.S. Manufacturing initiative. By working with our merchants and suppliers, and with the support of internal and external experts, we are guiding a prioritized strategy to fulfill our commitment to purchase $250 billion more in products supporting American jobs by 2023. I lead a team of passionate professionals who provide a variety of resources to suppliers considering domestic production. Walmart announced in January 2013 a 10-year domestic sourcing goal.  Can you tell us about it? Last year, we committed to buying an additional $250 billion in products supporting American jobs by 2023. Since beginning this journey,, we are seeing suppliers make enormous strides in finding ways to assemble or produce products in the U.S., which is helping boost job creation. According to our suppliers, about two-thirds of what Walmart spends to buy products in our U.S. stores are made, sourced, or grown domestically. However, we know there is room to do more, and we will play an active role in helping rebuild manufacturing in the U.S. Why did Walmart make this commitment? Making more products closer to our customers makes economic sense. It shortens the supply chain, drives costs down and gives us greater flexibility to respond to season or trend demands. We believe that by supporting American manufacturing, we can help create jobs. That’s good for our communities we serve and great for our customers. Can you tell us about the progress that has been made since the announcement? We have analyzed more than 1300 categories and are working from a prioritized work plan. Our suppliers are engaged and we are pleased with growth to date. We continue to make progress from light bulbs to towels, patio furniture to toys and household products suppliers are expanding manufacturing or assembly in the U.S. What impact on jobs do you think this could have? Based on data from Boston Consulting Group, it’s estimated that 1 million new U.S. jobs will be created through this initiative, including direct manufacturing job growth of approximately 250,000, and indirect job growth of approximately 750,000 in the support and service sectors. This could create jobs in manufacturing and industrial engineering, management, accounting, large equipment maintenance, and service providers like medical, retail, restaurants, and all the other services required to meet the needs of a workforce. There is much discussion about the “reshoring” of manufacturing – products that are made overseas coming back to the U.S.  Are you seeing this from Walmart’s suppliers? Absolutely. As I said, we are working with our suppliers as they take bold steps and taking risks to help ensure this initiative succeeds. Just last month, I was in South Carolina at a bicycle factory with Kent International. They make bikes for Walmart and other retailers and will create 175 new jobs. Another great example is Elan-Polo, Inc., based here in Atlanta, which began production of injection-molded footwear in March. Once at full capacity, this new facility will create 250 jobs and produce 20,000 pairs of shoes per day. What product categories do you think are most likely to be supplied by U.S.? We continue our evaluation of more than 1300 categories and are seeing progress in all parts of the business. There are several characteristics of products that make production in the U.S. more feasible today including accessible raw materials, highly automated production, lower labor content, high transportation costs and are impacted by seasons or trends. What expectations do you have of suppliers who want to supply Walmart? We expect that suppliers will work with us and bring us new, exciting products our customers will be looking for. We will play an active role in helping rebuild manufacturing in the U.S. So if I am interested in becoming a supplier to Walmart, what do I need to do? Anyone interested in becoming a supplier should visit our website at http://corporate.walmart.com/suppliers/apply-to-be-a-supplier/. We also have a website available to those interested in communicating the details of a U.S.-made or assembled product. This tool facilitates evaluation of products manufactured and assembled in the U.S. by the appropriate merchant. To visit the site, go to www.walmart-jump.com. What are the indirect benefits from domestic sourcing?  We know there are several factors that make production in the U.S. increasingly more attractive such as increasing transportation costs, wage inflation and a rising middle class overseas. However, what we can also be more responsive to trends and seasonality demands as well. For example, consider patio furniture. In our business we make buying commitments a year and half in advance – long before we sell even one piece of outdoor furniture for the existing season or knowing which colors will be on trend for the following  season. As you can imagine, patio furniture is bulky and expensive to ship. This is the hallmark of the types of products we should make closer to our customers. What is the low-hanging fruit here? Is it going to be existing products that are already made here or will manufacturers be ramping up for making items from scratch? We are working towards our goal in three ways – increasing the purchase of goods already sourced, made, or assembled here, sourcing new U.S. made or assembled goods and where it is economically feasible, and moving production to the U.S. We are seeing progress in all three work streams. Some suppliers are taking a phased in approach focusing first on assembly – like Kent International that I mentioned earlier. As volumes increase, they will ramp up its manufacturing efforts over the next few years. FABTECH this year is being held in Atlanta – is Walmart products in Atlanta and around the state to promote U.S. manufacturing? Yes, Georgia has been one of many great state partners and we have long sourced products here. I already mentioned Elan-Polo and there are many others – towels from 1888 Mills in Griffin, rugs from Mohawk in Dalton, Authentic Comfort in Newnan and Simmons mattresses. As you know, FABTECH is organizing a panel of how U.S. veterans can help close the manufacturing skills gap and launched a charitable fundraising campaign to benefit U.S. military veterans. Can you tell me about Walmart’s work with U.S. military veterans? Companies across America have benefitted from the service and sacrifice of our men and women in uniform.We value the qualities veterans learned in the service—leadership, commitment, discipline, problem solving, and hard work. Last year, we announced we would offer a job to any veteran honorably discharged within his or her first 12 months off active duty. We believe we will hire more than 100,000 vets in the five years of the commitment. To date, we have hired over 60,000 veterans in our stores, clubs, distribution centers and home office, many within their first 12 months off active duty. Several of the FABTECH partners have started initiatives to help attract more women to manufacturing.  Has Walmart started any initiatives to promote gender diversity? We have a supplier diversity program through Walmart’s Global Women’s Economic Empowerment Initiative, and have set goals and are taking practical steps to help change the lives of countless women around the world. To accomplish our goal, Walmart is seeking to source $20 billion from women-owned businesses in the U.S. and double sourcing from women suppliers in international countries. We’ve also launched a dedicated women-owned product marketplace on walmart.com. What should FABTECH attendees expect to hear from you on November 11? They are going to hear that the time has never been better to bring manufacturing back to the U.S. I will talk about the benefits Walmart is seeing by bringing production closer to the point of consumption and the challenges our suppliers are facing. Our size and scale enables us to able to play a unique role in facilitating progress and being an active partner in American renewal.

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