New sourcing vision shared with Walmart suppliers

Walmart deepened its commitment to domestic sourcing and supply chain efficiency on Thursday when Walmart U.S. president and CEO Bill Simon unveiled a first-of-its-kind RFP process and a new Innovation Fund.

Both revelations came at an event Walmart holds each spring in Orlando known as the Year Beginning Meeting, or simply YBM. While much of the several day event is focused on Walmart store managers, a portion is devoted to trading partners who are given the opportunity to hear from top executives.

This year, in wide ranging comments, Simon spent the bulk of his time focused on the subject of domestic manufacturing and a bidding process that rewards suppliers multiple year contracts who commit to domestic sourcing as part of their bid.

“We are taking big portions of our business out to bid to give our current suppliers, and possibly new ones, an opportunity to secure more business with us for longer if the products is made here,” Simon said in prepared remarks Walmart provided to Retailing Today.

To get involved, Simon encouraged supplier company attendees to meet with U.S. manufacturers and entrepreneurs who were on site at the event. He also disclosed a new RFP program for its patio furniture business to be made by U.S. manufacturers.

“Why patio furniture?” Simon asked. “There are long lead times and we have to make a commitment for the following year before any of the current year’s merchandise has sold. Making the furniture closer to point of sale will be better for our planning and better for our customers.”

He said the RFP process would be expanded to other categories and then on July 8 the company is doing what he described as an “open call,” in Bentonville where U.S. manufacturers will be able to pitch new products and categories.

“Chief merchandising officer) Duncan (Mac Naughton) and I will both be there with our merchants and we will make our teams available. We want to hear from you about what else we should be selling at Walmart that we make right here at home,” Simon said.

The company also announced the launch of its $10 million Walmart U.S. Manufacturing Innovation Fund in conjunction with the United States Conference of Mayors (USCM). The fund is set up to provided grants of up to $100,000 to eligible non-profit organizations focused on creating solutions to challenges faced by companies who are looking to on-shore production or grow U.S. manufacturing.

The first year of the initiative will focus on innovation in textiles manufacturing and common manufacturing processes that apply to a broad range of consumer goods, including small motor manufacturing and tooling for injection molding.

“Through the Walmart U.S. Manufacturing Innovation Fund, we hope to help remove the barriers to revitalizing and growing U.S. manufacturing, creating jobs and building a stronger American economy,” said Cindi Marsiglio, VPof U.S. sourcing and domestic manufacturing for Walmart. “This is part of Walmart and the Walmart Foundation’s broader commitment to foster new ideas and jobs to promote strong communities and grow America’s manufacturing footprint.”

The announcement is part of Walmart's larger commitment to buy an additional $250 billion in products that support American manufacturing announced last year.

Grant applications are due April 22, 2014 and each application requires sponsorship from a mayor of a USCM member city. More details are available at www.usmanufacturingfund.com.