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Compare & Contrast: FEMA vs Wal-MART

Posted By Barry Ritholtz On September 22, 2005 @ 6:53 am In Economy,Finance,Politics | Comments Disabled

There are certain things I expect for my tax dollars:  Schools, Police services, Military protection, Infrastructure, etc.

This is true whether you believe in big government or small. Note that these are not politically charged issues — should the EPA be eliminated, why not privatize NASA, etc.

I am referring to the very basic services government is formed to provide.

Which is why the simply incompetant job performed by FEMA is such a cause for concern: Somehow, we seemed to have lost interest in strategic planning — there is no intelligent design (pun intended) in anything the goverment does lately.

Even more pathetic than the failure at the Federal level is the post-disaster excuse making. Echoing similar 9/11 excuses, the "No one could have seen this coming crowd" is out pushing the same canard.

Let’s put that lie to rest right here, via the WSJ [1]:

The Federal Emergency Management Agency could learn some things from Wal-Mart Stores Inc.

On Wednesday, Aug. 24, when Katrina was reclassified to a storm from a tropical depression, Jason Jackson, the retailer’s director of business continuity, started camping out in Wal-Mart’s emergency command center. By Friday, when the hurricane touched down in Florida, he had been joined by 50 Wal-Mart managers and support personnel, ranging from trucking experts to loss-prevention specialists.

On Sunday, before the storm made landfall on the Gulf Coast, Mr. Jackson ordered Wal-Mart warehouses to deliver a variety of emergency supplies, from generators to dry ice to bottled water, to designated staging areas so that company stores would be able to reopen quickly if disaster struck.

Then, when the hurricane knocked out Wal-Mart’s computerized system for automatically updating store inventory levels in the area, he fielded phone calls from stores about what they needed. He also alerted a replenishment team to reorder essential products, such as mops and bleach. And by Tuesday, scores of Wal-Mart trucks, some escorted by police, were setting out to deliver 40 generators and tons of dry ice to company stores across the Gulf that had lost power.

Katrina is the biggest natural disaster Wal-Mart has ever had to confront. Initially, 126 of its stores, including 12 in the New Orleans metropolitan area, and two distribution centers were shuttered because they were in Katrina’s direct path. More than half ended up losing power, some were flooded and 89 have reported damage.

But by this past Friday, all but 15 of the idled stores had reopened. From Boutte, La., to Pass Christian, Miss., Wal-Mart frequently beat FEMA by days in getting trucks filled with emergency supplies to relief workers and citizens whose lives were upended by the storm.

Wal-Mart’s speed in responding to Katrina underscores the extent to which it and other big-box retailers like Home Depot Inc. have become key players in responding to natural disasters. Whereas FEMA has to scramble for resources, Bentonville, Ark.-based Wal-Mart has it owns trucks, distribution centers and dozens of stores in most areas of the country. It also has a specific protocol for responding to disasters, and it can activate an emergency command center to coordinate an immediate response. In the short term at least, the hurricane has helped boost Wal-Mart’s tattered image, damaged by a major sex-discrimination suit and allegations that it provides workers stingy pay and benefits.

Its astonishing that some people keep pressing the same old misinformation into service . . .

At Wal-Mart, Emergency Plan Has Big Payoff [1]
Ann Zimmerman and Valerie Bauerlein
THE WALL STREET JOURNAL, September 12, 2005; Page B1


The 33-year-old Mr. Jackson, who has an undergraduate degree in
emergency management and a masters in security management, is
effectively the quartermaster-general in Wal-Mart’s efforts to provide
supplies — and quickly revive sales — in areas hit by hurricanes,
tornadoes or floods.

"People know they can get what they need at Wal-Mart," said Richard
Stinson, manager of the Wal-Mart supercenter in Laplace, La., as he
walked the aisles of his packed store late last week. "It’s because of
what we can supply, our ability to get the merchandise in the building,
the associates to get it on the shelf." Still, he noted, there are
still items — mops for flooded floors, paper plates and cups, socks,
underwear, air mattresses — he can’t keep on the shelves.

The store on Highway 61, the main street in Laplace, lost power and
water like all its neighbors in suburban New Orleans. Mr. Stinson’s
first call from his cellphone was to Mr. Jackson’s emergency center.
The center sent six loss-prevention employees, who helped secure the
building and merchandise, assisted by local sheriff’s deputies who kept
watch during the first dark nights.

The emergency center also arranged to send generators and got Mr.
Stinson’s list of immediate needs. Laplace, which is 30 miles west of
New Orleans, suffered comparatively little flooding and damage, but it
became a refuge for evacuees who had. The center also supplied such
goods as cereal, peanut butter, crackers and water to area shelters.

The store regained power four days after Katrina. Employees showed
up for work in small but growing numbers, two immediately after the
storm and 200 by late last week, out of a total of 407. Some employees
came from other Wal-Mart-owned stores, including Stephen Cortez, an
employee at a shuttered Sam’s Club in hard-hit Metairie, another New
Orleans suburb.

The store, like others up and down the Gulf Coast, has lines of
people waiting to come in. Late last week, more than 100 people waited
in 95° heat for their turn to shop. The store didn’t sell its small
supply of ice, keeping it instead to cool water for waiting customers.
Local deputies guarded the line to keep people from cutting in. At the
request of local law enforcement, the store didn’t sell alcoholic
beverages for the first three days after it opened.

Edmond Collins Jr., 37 years old, and his wife, Kywana, 29, have
come every day to restock supplies for his family and the 14 people
staying at his cousin’s house. "We’re just buying food to survive," Mr.
Collins says.

After the storm hit, Mr. Jackson also took a call from Brian Boney,
a district loss supervisor from a part of Louisiana that hadn’t been
hard hit. Mr. Boney volunteered to inspect stores in ravaged areas of
Gulfport and Pass Christian, Miss., spending the night in his car. He
reported back to Mr. Jackson that Wal-Mart needed to dispatch a full
trailer — 8,000 gallons — of bottled water and ice for police and
emergency workers in the area.

But even as Mr. Jackson continued to reroute trucks and take calls
for emergency supplies in the days after Katrina struck, he also
monitored a growing storm off the coast of Japan, where Wal-Mart owns a
controlling stake in the Seiyu retail chain. And this past weekend, he
was glued to his computer again, this time keeping tabs on Ophelia, off
the coast of Florida.

In addition to refilling its stores, Wal-Mart has donated $3 million
in basic supplies like diapers and toothbrushes to relief centers in
three states. The National Guard and relief agencies also
"commandeered" 20 trucks filled with water and other merchandise,
according to a federal relief worker who didn’t want his name used. The
U.S. Department of Homeland Security will pay Wal-Mart $5 million for
that merchandise and has a contract to be paid for supplying more.

Sheriff Bob Buckley of Union Parish, La., has nothing but praise for
Wal-Mart’s role. About 600 law-enforcement officers from around the
state gathered in Gonzalez to start rescue operations, he says, but
they had no supplies. They called Wal-Mart the day after the hurricane
hit and two days later, they got two truckloads of flashlights,
batteries, meals ready to eat, protective gear and ammunition.

And when did FEMA arrive? "Who?" Sheriff Buckley asks.

At Wal-Mart, Emergency Plan Has Big Payoff [1]
Ann Zimmerman and Valerie Bauerlein
THE WALL STREET JOURNAL, September 12, 2005; Page B1

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[1] WSJ: http://online.wsj.com/article/0,,SB112648681539237605,00.html

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