Word: tsuei
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...goods Wal-Mart sells in the U.S. left American shores long ago, mainly for other countries in East Asia--Taiwan, Hong Kong and South Korea. Only about 10% of the firm's purchases from 2,500 suppliers in China today come from companies owned on the Chinese mainland. Andrew Tsuei, managing director in charge of Wal-Mart's global-procurement operations, says the rest come from longtime suppliers in other parts of the world that have moved their manufacturing to China in search of lower costs. That means Wal-Mart's China trade may indeed be eliminating factory jobs...
...easy being a supplier to the barons of Bentonville. "In fact, it's very tough," concedes Tsuei. Wal-Mart says it's trying to export its American-style standards and ethics to China's manufacturing sector too. In China, where sweatshops are alive and well, the company insists those measures make a difference. Suppliers, including those who sell to Wal-Mart indirectly through other companies, must limit the work week to 40 hours plus no more than three hours of overtime a day, meet safety requirements and provide decent accommodations for workers. Even those critical of Wal-Mart concede that...
These days, Wal-Mart is concerned that suppliers are getting extremely sophisticated at faking records to show compliance, even coaching workers before inspectors show up. "Most Chinese manufacturers don't understand why we focus on ethical standards," says Tsuei. "They ask questions like, Well, if I do this, then I'll have to increase costs. We say these are things we have to have...
Forcing suppliers to stick to ethical standards isn't the only way Wal-Mart can be tough. The bottom line, after all, is what really counts. "We drive prices down," says Tsuei, but not, he insists, "to the point where factories are making losses. We're helping them become more efficient." Manufacturers have to meet rock-bottom costs plus quality and design standards in order to keep selling to Wal-Mart...
...Staff writer Jannie S. Tsuei can be reached at tsuei@fas.harvard.edu...