- WAR ROOM: Where Wal-Mart guides the relief.
It was a funny exchange, Wal-Mart merchandise tracker Danette Willson acknowledged. At the request of the Red Cross, Willson was sending clothing and other needed items to their shelters in Baton Rouge and elsewhere, and among the things needed were bras. It went something like this:
What size? the supplier wanted to know.
Your best-selling sizes, Willson said. Can you send me 5,000?
The curiousness of the bra conversation notwithstanding, Willson was doing important work. From the Alarm Room of Wal-Mart’s Emergency Operations Center, the 23-year employee of Wal-Mart and an estimated 70 other Wal-Mart faithful were answering Hurricane Katrina’s national SOS by dispatching 700 trailer trucks hither and yon filled with ice, fuel, generators, clothing, gas cans and food, both to keep undamaged stores stocked in the stricken Gulf Coast and to provide free necessities at giveaway points. At these 12 donation stations — “mini-Wal-Marts,” they came to be called — enormous numbers of goods, from diapers to shaving cream, were handed out, free. That’s always going to be the best price, always.
In all, the company estimates its in-kind giving at $3.4 million. Its foundation, which gave away $134 million last year to various causes, gives more money to charity than any other corporate foundation.
To date, the foundation has given more to the Katrina relief than any other corporate foundation, a total of $17 million. (The Walton Family Foundation gave another $5 million to relief efforts.) Tyson Foods, which like its Northwest Arkansas neighbor Wal-Mart is the biggest in what it does — process and market chicken, pork and beef — donated $1 million in food and financial aid to hurricane relief efforts. Kroger gave $50,000 to relief funds in Mississippi and Arkansas, and thousands of dollars in school supplies to students relocated to Arkansas.)
But what made news was the way the company ran its Katrina effort — a model that the Federal Emergency Management Administration would do well to mimic.
While former FEMA head Michael Brown was still looking up Louisiana on a map, Wal-Mart trucks filled with water and trailer-sized generators had been sent from its nine emergency storage facilities to the scene to be ready for the onslaught the company’s weather-watchers knew was coming. None of the trucks wandered around the Southeast for four days with hauls of melting ice no one would receive — the incident that’s come to symbolize the ineptness of the federal response. The stricken of the Gulf Coast got things they needed, and they got them fast.
Matt Waller, a professor in marketing and logistics at the University of Arkansas in Fayetteville, said the company beat other relief efforts to the scene because delivering supplies quickly and efficiently is what it does every day. He also noted that the company’s “decentralization of authority” allowed local operations to act quickly, decisively and effectively, even if it meant giving inventory away.
As the floodwaters were rising, Wal-Mart CEO Lee Scott demanded that the foundation “take a leadership role” in responding to needs in what he called the company’s “heartland,” foundation president Brad Fisher said, and he challenged its directors to find a way to do that.
Its history of dealing with natural disasters — including hurricanes Dennis, Ivan and Charley — has given the EOC an idea of what people want and need.
Before Katrina hit, the EOC responded to requests from Wal-Mart’s regional directors across the Southeast, trucking water and other supplies to the stores. The Wal-Mart Foundation sent $1 million the Red Cross’ way when the hurricane made landfall. When the gravity of the situation began to be known — much of the information coming quickly from Wal-Mart employees in the Gulf region — top company executives and top foundation folks began what would be a twice-daily meeting of the minds, via conference call, to assess need and response.
It looks a bit like a downsized NASA control room, the Alarm Room does, with its pods and computers and phones and long wall where the path of the hurricane was projected from a computer. The mission of the room is all business — to keep Wal-Mart stores up and running. But the crisis of Katrina pushed the EOC into a mode that all can recognize as philanthropy: shipping needed goods without worrying about compensation.
“For the first three days, we were it,” said Kathy Cox, the foundation’s community program manager. “People had no other option.” Wal-Mart had the only gasoline in the areas hardest hit; the company had taken precautionary steps to keep stations supplied, filling the tanks and sending in generators to keep the pumps working.
The highly charged atmosphere was like nothing the EOC had ever experienced, and its managers did something they’ve never done before — they called in help from the outside. Lee Siler, executive director of the Northwest Arkansas chapter of the Red Cross, provided “insight,” Cox said, and the speedier, more accurate “face to face” exchange of information Wal-Mart wanted.
When shelters relayed a message to him that their people needed medicines, Siler let the company’s pharmacy arm know exactly what was wanted, and Wal-Mart dispatched drugs in four mobile pharmacies to Louisiana and Mississippi. Pharmacies in Pass Christian, Miss., where a Wal-Mart store was nearly destroyed, and Fort Chaffee were still operating as of last week.
Not every request was huge. A Texas town of 7,000 whose streets were flooded with sewage asked for a generator to run the pump system; it got the first available, which normally would have gone to the stores. In Fayetteville, when a vacant space Mayor Dan Coody set up was buried under a mountain of donations, Coody turned to Wal-Mart for help.
“Our donation was to help logistics,” the foundation’s Cox said: to “palletize and organize.”
The EOC also sent volunteers to help distribute the donations once they’d been organized.
What could FEMA learn from Wal-Mart? Jason Jackson, director of business continuity, said Wal-Mart was successful because “we move things from point A to point B every day.” Though the situations were out of the ordinary, established company communication kept things moving.
In contrast, he said, FEMA works with independent — and disjointed — agencies, so that even with a plan, there’s a problem.
Besides the millions of dollars of free merchandise, the Wal-Mart Foundation gave another $12.5 million to 17,500 employees who suddenly found themselves without housing in the wake of Katrina and $1 million in aid for Hurricane Rita. The company allowed displaced employees to work at the store of their choice in their new homes.
The Wal-Mart Foundation — which is funded annually by the company and spent down each year so that there are no left over assets — also awarded $8.5 million in $3,000 grants to emergency teams through its “Safe Neighborhood Heroes” program.