As Tom Muccio points out in this video, the buyer/seller relationship used to consist of two players — buyer and seller — each of whom came into the relationship with a strategy predefined by the home office. Each player had the responsibility to achieve the goals set for him.
It was a change from the cozy relationships manufacturers were used to having with wholesale distributors, who were (and in many companies still are) in charge of selling to retailers. Eliminating those middlemen was one of Walmart’s most significant innovations. As with everything new, though, there were bugs to work out.
Walmart has always followed a strict set of ethical guidelines in its relationships with suppliers:
Wal-Mart Global Ethical Principles
- Follow the law at all times;
- Be honest and fair;
- Never manipulate, misrepresent, abuse or conceal information;
- Avoid conflicts of interest between work and personal affairs;
- Never discriminate against anyone;
- Never act unethically – even if someone else instructs you to do so;
- Never ask someone to act unethically;
- Seek assistance if you have questions about this Statement of Ethics or if you face an ethical dilemma;
- Cooperate with any investigation of a possible ethics violation; and
- Report ethics violations or suspected violations.
The other piece in changing the relationship between suppliers and buyers was Retail Link, the software that gave Walmart more information about the vendors’ decision making — and vice versa, creating a partnership between Walmart and the manufacturers who supply the world’s largest retailer.
A couple of years after the introduction of Retail Link, Walmart began encouraging vendors to open offices in Bentonville, a move which led to the strong Walmart supplier community in Northwest Arkansas today. Face to face meetings became the norm, and buyers and sellers became partners, not players.
8th & Walton facilitator Teresa Warren, a 33 year veteran of Walmart, puts it this way: “Whether you grow your business or not is built on the trust you grow with your buyer, and that trust is built on the foundation of integrity.”