Alumnus talks of security, Wal-Mart

International corporations could have saved millions of dollars a year if they had streamlined… International corporations could have saved millions of dollars a year if they had streamlined security requirements, said one Pitt alumnus, and Wal-Mart is working to see that this happens. Scott E. McHugh, a Pitt alumnus who now serves as the vice president for global asset protection and security for the Wal-Mart Corp., told students in Alumni Hall yesterday afternoon that Wal-Mart is working with other major corporations, the Department of National Security and the European Union to create one set of security requirements for international companies. McHugh, who worked for the U.S. Department of State for 20 years before working for Wal-Mart, said international corporations are often forced to comply with security standards depending on whom they’re selling their products to. Those requirements can vary from company to company or from country to country. These requirements, McHugh said, are put in place to prevent incidents such as last November’s toy scandal, in which thousands of toy beads exported from China to the United States and other countries were tainted with lead. The regulations were also created to prevent terrorist operations, said McHugh. These requirements are often very specific to the corporation. As a result, factories around the globe must adhere to multiple sets of security requirements. It can cost about $2,500 per corporation to do so. The cost can add up quickly. Wal-Mart, for example, has more than 65,000 suppliers in 15 different countries. McHugh said that if the security requirements were streamlined, and factories had only one procedure for all of their customers, production costs would go down drastically, saving large corporations millions of dollars annually. In the past year, Wal-Mart has implemented new security requirements for its own goods that correspond with the U.S. Department of Homeland Security’s requirements, the Customs-Trade Partnership Against Terrorism. Wal-Mart’s factories are now subject to third-party inspections, and the company now requires 24-hour surveillance systems in each of its factories’ packing areas. Wal-Mart executives have presented their security plan to major corporations, as well as to the Department of National Security and the European Union, all of which, McHugh said, have agreed that the plan exceeds their own security requirements. Wal-Mart is currently focused on negotiating with other large global corporations, encouraging them to take on the security plan. Smaller corporations currently have no interest in embracing the plan because it does not meet their specific business model, McHugh said. However, that once more large global corporations take on the plan, smaller corporations will be forced to do the same to compete with the lower prices of global businesses.