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Inside Wal-Mart IT
prostoalex writes "Information Week magazine takes a look at Wal-Mart's IT infrastructure. Wal-Mart's yearly global sales are quoted at more than 250 billion dollars, their IT spending is less than 1% of that. At the same time, the company manages to pursue new venues in optimizing retail with the wonders of technology. And what about outsourcing IT for the sake of optimization? 'We'd be nuts to outsource,' a top IT executive at Wal-Mart replies."
Walmart appears to know this reality.
Strange women lying in ponds distributing swords is no basis for a system of government.
The fact is, their main edge over their competitors is their inventory management system (just-in-time, etc.). If they outsourced this, what is to stop their outsourcee to take the knowledge and then shop it around to Target, KMart, Sears, etc.? Such valuable knowledge must be kept in-house if you want to maintain the edge.
On the other hand, if it plain labor, then Walmart _encourages_ their suppliers to outsource. They keep asking for price cuts till the supplier has no choice. Read for yourself.
or .."We'd be nuts to outsource..." .."because 90% of our products are from China anyways!"
"...sales are quoted at more than 250 billion dollars, their IT spending is less than 1% of that."
.01
Let's see here....
$250,000,000,000.00
x
----------------------
2,500,000,000.00
Just working with the 1% number, we can see their IT budget is ~2.5 billion bucks. With that much loot, I think it's fair to say, one can move mountains... and still make it back in time for afternoon tea.
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Running 'Nix is like owning a Lightsaber. It's "a more elegant weapon for a more civilized time."
If you really think about it, Wal-mart is not evil. In fact, Wal-mart gives almost all of the benefit attained through their relentless cost cutting initatives back to consumers. Wal-mart's margins are actualy very small compared to most other businesses. Profits seem big because Wal-mart has sales of $250 billion, but margins are tiny.
Wal-mart does not force people into their stores at gun point. People shop there of their own free will so that they can get the absolute lowest price possible. This behavior has consequences.
Pay a higher price at your local store on main street, and suport their higher cost structure (buying american manufactured goods, higher wages and benefits for employees, lost productivity due to unionized labor force, etc.) or support the Wal-mart way.
Most Americans choose Wal-mart. This is what sends jobs overseas to cheaper labor, encourages "big box store" suburban sprawl, and low quality jobs in the store. Wal-mart is simply supplying what the american consumer wants. this is not evil, this is meeting demand. Wal-mart would not be sucessful if people valued quality jobs over low prices always, in fact, they would be out of business very quickly (remember the low margin thing?)
...products on the shelves at walmart represent products that one generation ago or less were manufactured inside the US. My beef isn't with the workers at walmart, and no idea how or why you would infer that, so I'll officially dispell that notion right now. My beef is high level collusion, bad foreign policy, supporting massive human rights abusers, and the notion that destroying the US economy and security just to make much less than 1% of the population a ton of loot is a good idea. Nuts to that!
As to folks who lost their jobs over the past 20 years due to outsourcing, I sincerely doubt that ALL those people willingly begged their bosses to please close the factory and take it to china, so that they could shop at some store like a walmart while they looked for a new job. For some folks it has happened multiple times so far. Comes a point in time you got to say "ok, enough" It just happened to them. It was sold to us as opening up global trade, "everyone wins". Yet we CONSISTENTLY run trade imbalances, especially with china? Why is that? Give me an exact answer to that if you can, why the trade imbalance? shouldn't it have settled out by now? (My pov,hint: china makes more money, and a very few very wealthy people make more money with things like that), but I'd still like to hear the official approved version of why this imbalance with "free trade" exists to such a huge extent.
25 years ago, the USA was the worlds largest CREDITOR nation, now we are the worlds largest DEBTOR nation. True facts, look 'emup. Exact same time frame the walmartization-the outsourcing- of the economy occurred.
You may think it's a coincidence, but I sure don't. I wrote and predicted way back then what is happening now would occur. You'll have to take my word on that, but it happened. It's OBVIOUS as all get out what happens when you open up the labor market intenationally WITHOUT opening up the housing and whatnot true "cost of living market" internationally and simultaneously.
I don't claim to know every human who works at walmart,but the three I know personally all had much better jobs that evaporated, and took walmart jobs out of *desperation* to have any income at all. I will grant that it's most probable that humans have an incredible variety of reasons for seeking employment most places. I think though it would be fair to assume that most folks working there would rather have 40 hours with better pay and some bennies, like most "middle class" jobs used to be inside the US.
Like I said, I used to be a supporter of walmart and shopped there, back when it was first open and sam walton ran it and it had mostly all USA products. Now that it's switched to being merely the arm of the Peoples Republic of China-retail division*, I can see that it is harmful to our domestic economy, because of the raw hard observable data, and from the perspective that a truly strong and independent nation *must* have a fully integrated vertical economy. It is an incredibly boneheaded move to fund, develop, enrich the one nation that is most likely to be your biggest global competitor (and most probgably military antagonist) once the oil really starts evaporating. It's a strategic blunder of almost unfathomable proportions. That is my opinion, but it is shared by many people of geopolitical and scholary bent. People who are only concerned about short term financial profits, no, they don't share that opinion. Some folks just have different priorities.
****WHY any nation that values freedom allegedly wants to do business with a one party total dictatorship, with NO RIGHTS whatsoever for it's people,and who have verifiably murdered millions of their own peoples is beyond me. In ww2 we fought against such a system, then we had a massive and expensive cold war against a similar system, but now, an extremly similar situation and nation, differing only in language, ethnicity and gross physical size becomes "most favored nation" trading partner with every big "american" businessman