Managing Non-Compliance & Risk
Most audited supplier facilities are found to be compliant with our foundational expectations (receiving a Green rating), or generally compliant (receiving a Yellow rating). By policy, suppliers are required to remediate any identified non-compliances with our Standards for Suppliers, even if the final assessment is Green or Yellow. Our re-auditing requirements allow us to monitor whether identified issues remain or have been corrected.
Audits and cases do surface more serious issues. For example, approximately 8.7% of audits in FY2023 resulted in a facility receiving an Orange rating. Where that occurs, compliance teams work with merchants and sourcing teams to engage the supplier to communicate the results and expectations for remediation, giving them limited additional chances to bring the facility up to a Green or Yellow rating. Remediation typically occurs: in FY2023, less than 2% of facilities assessed received a successive Orange rating.
Where information received through an audit or allegation indicates a particularly serious issue may be present and/or we do not have sufficient facts to make a determination as to how to handle the matter, we deploy a team of Walmart investigators to gather facts through on-site visits to facilities or through other means. Serious allegations that may warrant in-depth scrutiny could include indicators of forced labor, such as restriction of movement and payment of recruitment fees.
Where serious issues are not remediated over time or extremely serious issues are identified through audits or cases, it can result in consequences up to and including termination of a supplier’s relationship with Walmart and/or a supplier’s ability to use a particular facility for Walmart production. For example, 33 facilities received a Red rating in FY2023 via audits and an additional 58 received a Red rating via the case management process. Between 2018-2022, Walmart has stopped doing business with 15 suppliers in response to serious violations of our Standards.
Creating Economic Opportunity for People in Supply Chains
Walmart sources billions of dollars from diverse suppliers and uses business and philanthropic resources to help smaller producers access markets and grow.
Made in USA
Walmart has a long history of supporting American sourcing. More than two-thirds of Walmart U.S.’s total product spend in FY2023 was on items our suppliers reported were made, grown, or assembled in the United States.
Through our America at Work initiative, we continue to invest in products that support the creation of American jobs. In FY2023, we satisfied our commitment to invest an incremental $250 billion over our FY2013 purchases on products made, grown, or assembled in the United States before 2023. Additionally, in March 2021 Walmart committed to invest an incremental $350 billion over our FY2021 purchases on products made, grown or assembled in the United States over 10 years. As of the end of FY2023, we have increased cumulative receipts by $47 billion towards that goal.
Read More: Supplier Opportunity.
Walmart uses its sourcing strategies to foster equity and inclusion of underrepresented and disadvantaged groups while enhancing our product offering. Walmart’s supplier inclusion program provides companies owned and operated by racial and ethnic minorities, women, veterans, members of the LGBTQ+ community, and people with disabilities opportunities to grow their business by supplying products or services to Walmart. A diverse supply chain helps us deliver the products and services our customers want and need at affordable prices.
Our U.S. businesses sourced more than $13 billion in goods and services from approximately 2,400 diverse suppliers in FY2023. Our Supplier Inclusion Team is dedicated to supplier inclusion and works to identify and onboard interested suppliers and regularly attends business conferences, product and procurement fairs, expos and similar events to help identify potential new diverse suppliers. In addition, our Supplier Inclusion Portal provides current and potential suppliers with information on our supplier inclusion program and requirements.
Supporting India Manufacturing & Entrepreneurs
Walmart has sourced goods from India for more than 20 years, supporting local suppliers to build their capabilities and develop new product lines to meet international standards. Example support includes:
- In December 2020, Walmart announced it would seek to triple its exports of goods from India to $10 billion per year by the end of 2027. As of the end of FY2023, Walmart has reached approximately $3.4 billion in exports from India.
- Walmart and Flipkart focus on building supplier capacity, including through Flipkart’s Samarth initiative, which helps MSMEs register for and succeed in online sales, and which recently reached the milestone of positively impacting 1.5 million livelihoods across India, and through Walmart’s Vriddhi Supplier Development Program, which aims to train and prepare 50,000 of India’s MSMEs to "Make in India".