Logistically Speaking: American ways of life

June 8, 2004
American ways of life It sounds like I plucked this out of the believe it or not files, but I swear it's true the entire state of Vermont has been declared

American ways
of life

It sounds like I plucked this out of the “believe it or not” files, but I swear it's true — the entire state of Vermont has been declared an endangered place. No, this has nothing to do with fears of terrorists creeping across the border from Canada with weapons of mass destruction. No, it's not about another outbreak of SARS, or a new anthrax scare, or even global warming. Those sorts of things, presumably, Vermont can deal with.

So what is threatening Vermont so drastically that preservationists have declared the entire state an historic landmark?

In a word, Wal-Mart.

According to the National Trust for Historic Preservation, the threat of big-box retail development is “worse than ever, with Wal-Mart planning to saturate the state with seven new super-stores that are likely to spur additional development, sprawl, disinvestment in downtowns, the loss of locally-owned businesses, and the erosion of the state's unique sense of place.”

Vermont currently has four Wal-Mart stores, and the National Trust believes the retail giant plans to add several more, while expanding the size of the existing stores (Wal-Mart says it only has definite plans for one new store). The unique character of Vermont's small-town charm would be irreparably harmed, the argument goes, were Wal-Mart to expand its presence throughout the state.

In fact, this is the second time the state has appeared on the “most endangered” list. A similar scenario played out in 1993, when Vermont attempted — ultimately, unsuccessfully — to remain the only state without a Wal-Mart. Apparently, the addition of four Wal-Marts over the past decade hasn't irreparably damaged Vermont's unique character, but another three or four would be sufficiently catastrophic that the classic Vermont of old would disappear forever.

It's curious that, in a country still fighting off the effects of a long economic malaise, an entire state could be threatened by the prospects of an increase in commercial development. But I suspect that the impetus behind this PR stunt has little to do with the quality of small town life, and a lot to do with negative perceptions about Wal-Mart's supply chain practices.

The key point on which the National Trust's argument hinges is the idea that Wal-Mart — all big-box retailers, really — are inherently bad for communities. So that leads to the obvious question: Who ultimately determines what's good and what's bad?

The Institute of Supply Management, an international trade organization focused on supply chain issues, has attempted in its own way to answer that question. ISM has identified what it calls the seven principles of supply social responsibility: community, diversity, environment, ethics, financial responsibility, human rights and safety. The organization surveyed more than 1,100 manufacturers and suppliers as to how socially responsible their companies are, based on the ISM's criteria (full details available at www.ism.ws/sr).

Not surprisingly, in this era of Sarbanes-Oxley, the highest score (88% of respondents) went to companies claiming to follow generally accepted financial standards and requirements. This would fall under the heading, “Believes first responsibility of a company is to its shareholders.”

Also scoring 88% was the statement that the company maintains a safe environment for its employees, which would fall under the heading, “Believes first responsibility of a company is to its employees.” More broadly, 83% say they abide by a formal set of principles and standards of ethical conduct.

But what about the local community, or more even broadly, the world community and human rights? Going by the ISM survey, those sorts of issues are pretty low on the priority list, suggesting that companies using offshore suppliers are outsourcing human rights responsibilities to those suppliers as well. For instance, only 13% of respondents require their suppliers to demonstrate a proactive human rights program, and only 26% are confident their companies regularly conduct supplier visits to ensure suppliers are not using sweatshop labor.

Wal-Mart is the largest employer in the world, so it's certainly a valid question to ask whether the retail giant is the “good neighbor” it claims to be, or if in fact it looks the other way too often when its suppliers are running sweatshops overseas. However, rather than getting caught up in the endless debate over whether Wal-Mart is “good” for communities, organizations like ISM are taking the high road by challenging all of us to examine the social responsibility — or lack thereof — of our own companies. And ISM is smart enough to recognize that weighing social responsibility depends largely on the context in which a company operates.

So, rather than asking if it's possible for Vermont to remain Vermont-like if more Wal-Marts start dotting the landscape, let's redirect the focus where it ought to be in a logistics industry publication and ask: Are big-box retailers responsible stewards of their supply chains? And how would you rate your own company in terms of social responsibility?

Dave Blanchard

June, 2004

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