Steve Dobbins is president and CEO of Carolina Mills, a 75-year-old North Carolina company that supplies thread, yarn, and textile finishing to apparel makers--half of which supply Wal-Mart. Carolina Mills grew steadily until 2000. But in the past three years, as its customers have gone either overseas or out of business, it has shrunk from 17 factories to 7, and from 2,600 employees to 1,200. Dobbins customers have begun to face imported clothing sold so cheaply to Wal-Mart that they could not compete even if they paid their workers nothing. By now, it is accepted the wisdom that Wal-Mart makes the companies it does business with more efficient and focused, leaner and faster.
Wal-Mart itself is known for continuous improvement in its ability to handle, move, and track merchandise. It expects the same of its suppliers. But the ability to operate at peak efficiency only gets you in the door at Wal-Mart. Then the real demands start. The public image Wal-Mart projects may be as cheery as its yellow smiley-face mascot, but there is nothing genial about the process by which Wal-Mart gets its suppliers to provide tires and contact lenses, guns and underarm deodorant at every day low prices.
Wal-Mart is legendary for forcing its suppliers to redesign everything from their packaging to their computer systems. It is also legendary for quite straightforwardly telling them what it will pay for their goods. Current Objectives: Improving store productivity: The combination of revenue growth and cost reduction is a magic bullet. When costs decrease as a percentage of sales, profitability increases and provide fuel for further investment. Effective productivity initiatives remain crucial to any strategy that attempts to level or change the competitive playing field.
Focus on the customer experience: It has been said that it is cheaper to keep the customers you have than it is to acquire new ones. Satisfied customers shop more frequently and purchase more. The quickest path to better productivity is to increase the average transaction amount — the more a customer buys, the less the fixed costs take out of gross profit. Now more than ever, customers need a reason not to take their business elsewhere.
Aligning store operations to achieve bottom-line results: Assessing all resources to determine requirements for better aligning of both store operations and physical resources, such as equipment and technology.