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Wal-Mart to shrink resources

Teaneck, N.J. – Wal-Mart’s global procurement division is working to rationalize its factory base and will move bigger pieces of business to fewer manufacturing plants.

The retailer currently does direct business with 4,400 factories worldwide, Lawrence Jackson, evp, president and ceo of global procurement, told analysts here today, the closing day of Wal-Mart’s two-day analyst conference.

The division also wants to streamline processes, he said. By way of example, he said, global procurement could create a universal standard in its towel program “so that no matter what country it is produced in, [all global Wal-Mart stores] would have the same basic towel.”

In another shift, global procurement will focus less on doing a set percentage of volume direct in favor of placing direct orders where Wal-Mart can achieve the greatest cost savings, Jackson said.

The 2,000-person global procurement team “is consolidating factory relationships to drive quality and lower costs,” he added.

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