Wal-Mart’s pioneering use of technology and its power in the marketplace has transformed how goods are made and distributed in the world economy; allowing it to have a profound impact on working people in the United States and throughout the world.

Wal-Mart’s late Founder Sam Walton was notoriously known for his averseness to technology. According to his 1992 memoir, Made in America, he wrote, “Truthfully, I never viewed computers [as he called the company's Information Technology (IT) systems] as anything more than necessary overhead. A computer is not and will never be a substitute for getting out in your stores and learning what’s going on.”

Walton’s distrust of computers is substantiated by his handpicked successor David Glass. According to Anthony Bianco’s book, Wal-Mart: the Bully of Bentonville (2007), Mr. Glass would observe his boss checking a computer generated invoice against his own handwritten accounting book. In addition, he would hand copy off the computer generated invoice, also. Mr. Bianco surmised Mr. Glass chose to go ‘full throttle’ on his IT systems (headquartered in David Glass Technology Center) drive on or about the time of his boss’s passing.

Under the inspiration of David Glass, Wal-Mart became a technology leader. “The company was an early adopter of bar-code scanning and eventually established the gold standard for supply chain efficiency thanks to highly integrated point-of-sale systems, satellite-communicated inventories and even RFID tracking” (Techdirt.com, Lindquist, 2007). As a special note,
RFID uses low-powered radio transmitters to read data stored in tags, at distances ranging from 1 inch to 100 feet. The tags are used instead of bar codes and can contain a lot more data, allowing manufacturers, suppliers and retailers to track and manage assets more efficiently (Vijayan & Brewin, TexasInstruments.com, 2003, para 2).

With the vaunted supercomputer housed in the David Glass Technology Center, which is second only to the Pentagon’s supercomputer in the world, Wal-Mart is able to transform how goods are made. For example, the company developed Web-based software (Retail Link) which enables Wal-Mart and its suppliers to monitor the movement of their respective inventory from the shelves (including distribution centers) to the checkout registers. In this manner, Wal-Mart is able to keep a low inventory which helps to lower operating costs. Thus, Wal-Mart is able to pass the savings, in part, to consumers in form of lower prices. In turn, suppliers are coerced (right choice of word) to agree to a lower wholesale price (Wal-Mart is able to purchase merchandise in high volumes dwarfing other retailer’s demand - competitive edge) (Valenti, Go.com, 2002).

To compensate for the lower wholesale price, Wal-Mart’s suppliers glean (sometimes with the help of Wal-Mart) efficiency by making the production of their products more cost effective and by reducing the salary of their employees.

The reduction of Wal-Mart’s and its suppliers’ employees’ salary, to support the lowering of their respective price to the consumer, creates a negative impact on working people in the United States. The lowering of salaries is accompanied by absent healthcare and a poor quality of life for the U.S. employees. Recourse for the U.S. employees is nonexistent because of Wal-Mart successful ability to avoid unionization (courtesy of our U.S. government), and their suppliers’ ability to relocate (outsource) the manufacturing of its products to foreign countries.
The snowball effect (pointed out in the preceding paragraph) negatively impacts working people throughout the world, also. For example, foreign suppliers compete to meet Wal-Mart’s fanatical demand for low prices on its products. Thus, in some countries (abetted by their governments), employees are reduced to indentured servitude (including child labor) without governmental protection or a remedy via collective bargaining. As a matter fact, Professor Musuraca (2007) pointed out that trade union leaders are marked for death in Columbia and unions are nonexistent in China.

Wal-Mart’s pioneering use of technology transformed how goods are distributed in the world economy, too. For example, “they have such an efficient system so that goods are coming in without sitting in the warehouse (Go.com, 2002, para 15),” said Arun Jain, professor and chairman of marketing at the University at Buffalo School of Management. Similarly, the transformation of how goods are distributed has the same negative impact on working people in the United States and throughout the world.

Accordingly, Wal-Mart’s pioneering use of technology helps to establish its power in the marketplace as it continues to pursue ‘the low price.’ For example, Wal-Mart retains the top spot on the Fortune 500 list, and as Professor Musuraca (2007) taught Wal-Mart is a microcosm of the U.S. economy. I add to Professor Musuraca’s point by stating, “Wal-Mart is a microcosm of the world economy accompanied with all its warts (the negative impact on workers everywhere).”
In conclusion, I showed how David Glass overrode the late Sam Walton’s (after he was fading out of the picture) reluctance to see the importance of investing in ‘computers’ by establishing the David Glass Technology Center.

David Glass’s vision and implementation of Wal-Mart’s pioneering use of technology help to ensure its power in the marketplace which in turn transformed how goods are made and distributed in the world economy. Moreover, I elaborated on Wal-Mart’s (via its technology and power) impact on working people in the United States and throughout the world. Did David Glass proved the late Sam Walton, who is cultishly venerated by Wal-Mart as an oracle or a prophet…heck as the Moses (if not King Solomon) of Bentonville, wrong?

Karl A. Mitchell