Chain Reactions

Apple Is Turning into Walmart

On the surface, Apple Inc. and Wal-Mart Stores Inc. don't seem to have much in common, beyond the fact that both companies are category-killers in their respective niches. However, the coincidences between the two giants are many, and in recent weeks those similarities have become even more obvious. Consider:

At various times, both Walmart and Apple have been celebrated at being among the very best at supply chain management. As the 800-pound gorilla of retail, Walmart has been able to push through just about every supply chain initiative it has championed, whether it be online exchanges, RFID, sustainability labeling, or greener packaging. Apple, meanwhile, has led the way in creating a digital supply chain, whereby it can make billions of dollars by selling products that exist only on computers and electronic devices. Apple has also become synonymous with "inventory turns."

The founders of the two companies Sam Walton and Steve Jobs weren't merely thought of as canny businessmen, but in fact were celebrated as genuine American folkheroes, largely above criticism. Even when some of the practices of the companies they led were questioned publicly, both founders remained above the fray.

As soon as the founders died, it became open season on the reputations of the two companies, as if the popular press decided that it was now safe to rag on the companies without risking the wrath of the "Sam" and "Steve" cultists.

Sam Walton died in 1992; just a year later, a network TV newsshow ("Dateline") aired a segment where the interviewer challenged Walmart's then-CEO, David Glass, to explain why the retailer was sourcing clothing made in Bangladesh sweatshops, mostly by child laborers. Twenty years later, it took only a few months after Steve Jobs' passing for the New York Times to publicly blast Apple for the substandard working conditions at Foxconn, the Chinese electronics manufacturer that assembles many of Apple's main products (as well as those of other high-tech companies). Nothing in the Times' series of articles was new information, but what was new was the willingness of the Times to take direct aim at a company it had lauded in countless ways when Jobs was running the show. And Apple's reluctance to reveal details about its offshore suppliers has only contributed to the thought that, "Hmmmm, maybe they have something to hide?"

In many towns and cities throughout the United States, the thought of retail behemoth Walmart opening up a big-box store in their community is a rallying cry for civic-minded citizens to tell the retailer, in no uncertain terms, "We don't want you here." Dating back at least to the Bangladesh sweatshop scandal, Walmart has been targeted with numerous boycotts, aimed at slowing if not necessarily stopping the retail behemoth's growth. Up until just recently, Apple's reputation has been almost the polar opposite of Walmart's, as iTunes, iPods, iPhones and iPads have all proven to be popular to a degree that nobody could have predicted. Time and again Apple has succeeded at creating products that nobody knew they even wanted but soon enough people found they couldn't live without. However, various efforts are underway to boycott (or at least attempt to boycott) Apple until and unless the company agrees to better monitor its overseas supply chain. One such campaign, organized by a group calling itself, reportedly has collected a quarter of a million signatures petitioning Apple to improve its supply chain practices. Coincidentally (or not), that same week, Apple was named the most respected company in the world, with the highest consumer approval ratings in the history of the poll.

And that, ultimately, might be the point: The bigger these companies get, the more ubiquitous their big-box footprints and digital revolutions become, the more likely it will be that the popular press will start to cover stories that we in the business trades have reported on for years. With Steve Jobs gone, just as we learned when Sam Walton passed away, Apple has ceased to be a red-white-and-blue success story and instead has become merely a very big company making a lot of money both here and overseas.

TAGS: Supply Chain
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