Wednesday, September 07, 2005

Practice, Practice, Practice

Not only is it the way to Carnegie Hall, but it also seems to be the way to New Orleans. From the Washington Post report on Wal-Mart's response to Hurricane Katrina.
"I want us to respond in a way appropriate to our size and the impact we can have," he said, according to an executive who attended the meeting. At the time, Wal-Mart had pledged $2 million to the relief efforts. "Should it be $10 million?" Scott asked.

Over the next few days, Wal-Mart's response to Katrina -- an unrivaled $20 million in cash donations, 1,500 truckloads of free merchandise, food for 100,000 meals and the promise of a job for every one of its displaced workers -- has turned the chain into an unexpected lifeline for much of the Southeast and earned it near-universal praise at a time when the company is struggling to burnish its image.

Many people would be pleased at the display of good corporate citizenship. In addition to that, I take heart at the fact that Wal-Mart is capable of doing that at speeds quicker than the public sector disaster agencies.
But the chain's huge scale is suddenly an advantage in providing disaster relief. The same sophisticated supply chain that has turned the company into a widely feared competitor is now viewed as exactly what the waterlogged Gulf Coast needs.
During a tearful interview on "Meet the Press" on Sunday, Aaron F. Broussard, president of Jefferson Parish in the New Orleans suburbs, told host Tim Russert that if "the American government would have responded like Wal-Mart has responded, we wouldn't be in this crisis."

Why was Wal-Mart able to respond so quickly? They could because they have been deleviering goods through this well developed routing scheme for years. It has been grown around the conditions on the ground. Granted those years of practice have been under optimum conditions. Compared to the government's need to create a local distribution system from scratch, Wal-Mart's system was present with "forward deployed" supplies already in place when the storm hit.

A couple more points where Wal-Mart has the advantage over FEMA. One, the distribution system is already in place nation wide, while FEMA's is currently in the Gulf Coast. If another hurricane were to hit Florida or an earthquake were to hit California, those systems are still available. Two, not only is the physical transportation system well practiced, so is the managerial system well practiced. The people who make up the Wal-Mart chain of command have been working with one another for years, while the multi-jurisdictional agencies may meet once or twice a year, if that.

So Wal-Mart has pre-established system and a pre-established team while the government has neither. Score two for the free-martket.

(H/T Radley Balko)

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