We’ve elected the most antibusiness President in our 240-year history. Time, Publius says, to add up how much we must pay. As always with Don Trump, it’s about the numbers. So let’s start with what Dumb Don will cost that most numerate of companies, Walmart, a company Publius has studied closely for over two decades.

With Walmart, Publius always focuses on a single question: How did it inflate so fast to more than seven times its 1994 size, becoming the world’s largest company with sales of $482 billion? In the same period, the US economy grew much more slowly, only 2.5 times.

Today, Walmart is nearly 3% the size of the U.S. It employs 1.5 million Americans, one percent of the labor force. Ninety percent of Americans live within fifteen minutes of a Walmart. The entire population of our country, including the undocumented, flow through Walmart every month.

Understand the answer to Walmart’s ability to scale so far, so fast, Publius reasoned in 1994, and you understand the key to profitable scalability in modern business. When, as Publius did, you apply what you learn to Apple, Cisco and McDonald’s, companies nothing like Walmart, your eyes will pop. And America will curse the day it ever heard the name Donald Trump.

Walmart was the first company in the world to translate the core dynamic of business—how to turn customer information into cash faster than the competition—into operational rules in a world where information costs are in free fall.

Walmart did only one, disarmingly simple thing. It increased its cash velocity (days of sales in inventory + DoS in accounts receivable – DoS of payables in the cost of goods sold) from sixty-six days in 1994 to minus one today. In other words, in 1994 Walmart got paid more than two months after it incurred expense. Today, Walmart gets paid one day before it incurs expense.

Most CFOs will tell you, “That’s easy. Just force your suppliers to bank you by making them wait ninety, one hundred and twenty days or more.” Doing this allows them to support flaccid, uncompetitive ecosystems where excessive inventories lie around doing nothing and shoddy selling practices mean they must wait months to be paid. "Who cares," they say. "Payables cover the whole thing so why worry?"

Walmart used information technology to do the exact opposite. In doing so, it revolutionized modern management. It turned all thinking about working capital on its head. The result was astounding as the data show.

Walmart reasoned that turning suppliers into bankers by stretching payables strangles those suppliers. They in turn have to strangle their suppliers. This makes the company ecosystem, including its all-important customer relations, unreliable and unscalable.

Walmart determined quite logically from this that because brand is managing how your customers experience your products, excessive payables must destroy brand. Simple as it is, obvious even, you would be amazed how many people don’t get this. And don't have the information technology to make it work. Like most of Japan.

To keep its ecosystem stable as it grows, Walmart has kept less than forty days in payables for decades. Walmart suppliers in turn can do the same with theirs and on down the line. This means that business with Walmart and any part of its supply chain is good business. Walmart is a company with which you want to be associated. Which in turn means that Walmart’s ability to serve its customers is assured. As is its brand.

If you want to see how valuable this is, look at Walmart’s sales during 2007-2010. Recession? What recession? Walmart kept its people employed and its customers economically sound.

The next logical step in Walmart’s thinking is that if you keep payables low to support your supply chain, the cash velocity equation forces you to examine what you are doing with the other two factors, receivables and inventories.

This is where Walmart’s data get really interesting.

Since 1994, the company has kept about four days of sales in receivables, common for retailers because they collect at the point of sale when you check out.

So, if payables and receivables are both more or less constant, how did the company accelerate cash velocity from sixty-six days to minus one? The only factor left is inventory days. These dropped from a peak of sixty-four in 1995 to thirty-four today.

Walmart grew sales seven times by cutting inventories.

How can you grow and have fewer inventories? By leveraging the fast-falling cost of information and putting Enterprise Resource Planning (ERP) in place to identify inventory wait states in your supply chain and systematically eliminate them. And suck down the monster amounts of customer information it takes to get this right, high-value information that can be leveraged in endless ways. Cost goes down and yield and capacity both go up. Your profit and loss and balance sheet both improve. Each day of sales at Walmart is just over $1.3 billion. So, if Walmart had not cut those thirty days in inventories, it would have to carry an extra $39 billion in financing. Ouch!

Today, the simplest way to think of Walmart is as a cloud server with stores attached.

The result is more products in more stores at cheaper prices. Walmart is not a discounter in the classic sense. Its business system is cheaper than the competition’s. This is how it lives up to its brand line: “Save money. Live better.”

By delivering on its brand line, Walmart has transformed poverty in America. It enables people to get first class goods for less, giving them money to spend on other things (economists call this a consumer surplus), growing the economy.

In addition, Walmart’s focus on eliminating inventory wait states means less wasted product, more trucks that never roll, and more fuel that is never burned. Walmart is an environmental powerhouse.

Dumb Don is determined to rip up our trade agreements, dismantle Walmart’s supply chain, force Walmart’s inventory days through the roof, drive its suppliers to distraction while they wait to be paid and make its customer’s lives miserable with the huge price increases and loss of products that will result. He wants Americans to "Pay more. Live worse."

The net of this will be a sales implosion at Walmart, huge increase in unemployment, and a significant increase in what consumers pay to survive. With the entire population cruising through Walmart every month Dumb Don will be our choice execration.

Dumb Don will also throw out all Walmart’s information technology innovations—and those of Apple, Cisco, McDonald’s, IBM, Oracle and on and on that operate on the same principles—and put America back to a pre 1994 period. Basically, preInternet.

Walmart CEO Doug McMillon must be having fits. Dumb Don wants to dismember his company which employs 1% of the U.S. labor force. Top Walmart suppliers like P&G employ a tenth of that again. Add in Walmart’s whole ecosystem and you get a big piece of America. Shred this lot and unemployment will go through the roof.

Then turn Dumb Don’s thinking to the auto sector. Sure enough, a great story by Dudley Althaus and Christina Rogers on the front page of The Wall Street Journal only two days after the election was all about how the Dumb Guy is planning to eviscerate auto sector supply chains worldwide.

If you think for even one second that the Great Dumb One can be persuaded to back American business and grow the economy, think again. Publius has demonstrated that Dumb Don cannot read or write in English. If this article was put in front of him, he could not read it. If someone tried to explain the basics of ERP-enabled working capital management to him he could not possibly understand a word of what was being said.

Dumb Don thinks in Tweet-lengths, the Planck length of intellection.

The lesson for business: If you or any part of your ecosystem, no matter how remote, has a supply chain that extends so much as one millimeter beyond our borders, you are in deep, deep trouble.

To Doug McMillon and Walmart associates , shareholders and customers everywhere, you have Publius’ deepest sympathies. You are about to learn why Don's home town, where they know him best, voted against him by an astounding 9:1.

Tim Cook and Apple, you’re next.

For Follow Up, Read:

John Lyons in the Wall Street Journal November 13, 2016

William Maudlin and John Lyons in the Wall Street Journal November 9, 2016

Shawn Donnan and Tom Mitchell in the Financial Times November 14, 2016

Isabel Reynolds and Takashi Hirokawa in Bloomberg, November 14, 2016

Robin Wiggleswoth and Mary Childs in the Financial Times November 15, 2016

Kathy Chu and Juro Osawa in the Wall Street Journal, November 16, 2016

Ginny Rometty, CEO IBM, November 14, 2016

Tim Higgins in the Wall Street Journal, November 16, 2016

Vindu Goel on Apple in the New York Times, November 21, 2016

Shawn Donnan and Andres Schipani on Trump's massive China setback in the Financial Times, November 21, 2016. And he's only been elected a few days. Amazing.

Steven Rattner in the New York Times on November 11, 2016 the horrific cost to Americans of Dom Don's supply chain dismemberment policy.

Dudley Althaus and Christina Rogers in the Wall Street Journal on November 10, 2016 on the cost of Dumb Don's plan to dissolve the US auto industry.

Andrew Browne in the Wall Street Journal on November 15, 2016 on how Dumb Don plans to hit American workers hard, cutting jobs deep and fast.

Richard Waters, one of the must-follow reporters for the Financial Times, penned an illuminating piece on November 24th about Apple being in Dumb Don's line of fire. To give you an idea of how bad the situation is, Apple's ERP-enabled SCM, like Walmart's, cut inventory days from 25 in 1994 to 4 last year. This makes Tim Cook one of the great logistical geniuses of all time. But it makes the damage the Dumb Dude can wreak on Apple shareholders and customers staggering.

Tyler Cowan in Bloomberg on November 29, 2016 went into enough detail to show that Dumb Don is every bit as dumb as he makes himself out to be.

Ted Mann in the Wall Street Journal on November 30, 2016 showed how your Trump Taxes are coming due well before the Dumb Dude takes office. Don will send your tax dollars to Carrier, the air conditioning people, so that they will keep 1,000 jobs in Indiana rather than moving operations to Mexico. Add these tax payments to Walmart's supply chain, and Apple's, and Ford's and Boeing's, and you get an idea of what the Dumb Dude has in mind for us. "America, you've got to pay!"

Taos Turner and Paul Kiernan wrote a great piece on the Wall Street Journal on November 25, 2016 on the cost of Trumpist policies in the countries where they are practiced. Sure enough the Trump Tax to keep jobs in Indiana is kicking in just as the authors said it would.

Justin Lahart in the Wall Street Journal on November 25, 2016 showed exactly what Publius believes, that the impact of the Dumb Dude's Trump Tax on stocks could be punitive.

None other than The Wall Street Journal Editorial Board ripped into Trump on December 2, 2016 showing just how Dumb the Dumb Dude is and supporting Publius 100%. Amazing that it took the WSJ this long to get the Dumb Don message. Delighted they eventually did. Socialism has no place in the US and it is time that the WSJ took a stand.

As Julie Johnsson reported in Bloomberg on December 2, 2016, Boeing CEO Dennis Muilenberg has come down strongly on the Publius side.

The Financial Times slammed Dum Don's mercantilism on January 6th for its antibusiness impact and deep cuts in US economic potential, supporting Publius to the max.

The Wall Street Journal in Trump's Auto Bluster on January 7, 2017 asked the same question Publius asked, "Does Donald Trump understand business?" It concluded, as the evidence has shown repeatedly, that he does not. The Journal has, way too late for the election (common for the journal, unfortunately) finally understood what Publius explained in Don Trump Learns to Count last February, that Don is innumerate and would have no way of understanding business basics like IT-driven cash wait state elimination. These systems minimize balance sheet exposure and maximize profitable growth. In other words, Publius concluded long ago, Don Trump cannot read a balance sheet. The Journal is beginning to grasp the impact of this small matter.

On the same day -- January 7, 2017 -- The Wall Street Journal's reporters, who have for decades been light years ahead of the paper's Editorial Board, weighted in a full two months after Publius in this post, to show the disastrous effect on the US standard of living of Dumb Don's business illiteracy. WSJ reporters Susan Pulliam, Sarah Nassauer and Richard Rubin ran some elementary numbers -- something the Journal should have done early last year -- to show devastation in our retail sector if Dumb Don get his way. At this point, it would be better for all of us if the Journal's Editorial Board simply resigned.

Foreign leaders are beginning to understand the astonishing level of Dumb Don's innumeracy. Check out this comment by Taro Asao, Japan's Finance Minister: "It’s questionable whether the new US president has a grasp of how many vehicles Toyota builds in the US.” No kidding. Or what a continual pour supply chain looks like!!

On February 1, 2017, Financial Times columnist Martin Wolf nailed it, as he always does. It is not good to think without checking what he thinks first.

Updates

October 8, 2017

The U.S. Chamber of Commerce took nearly a year to get on Publius' bandwagon. It now supports Publius 100%. The Chamber finally rounded on Dumb Don, denouncing his trade policies as the imbecilities that they are. The Dumb Dude's trade policies show that he did not get past the first semester at Penn because he obviously understood not a single word of what he was taught there. Someone paid big to get him that graduation certificate. Penn has serious file searching to do.

June 25, 2018

Great piece today by David Lynch and Heather Long in the Washington Post on how Harley-Davidson is moving production offshore in response to Dumb Don's pre Ricardo business thinking. Don is so dumb, as Publius has shown many, many times, that he was unable to study at university and has not the slightest idea of how business works.

July 6, 2018

Don has really blown it. His tariff walls kicked in today and American business is going nuts. As Publius wrote on November 12, 2016:

The lesson for business: If you or any part of your ecosystem, no matter how remote, has a supply chain that extends so much as one millimeter beyond our borders, you are in deep, deep trouble.

What is really, really bizarre is that what has only just occurred to our business leaders was obvious years ago to anyone who both listened to Don's Planck Length intellect and knew as much about business as a first term economics student.

Publius wants to know, what were America's business leaders thinking? Were they thinking at all? Why didn't they step up and tell Americans that their jobs were at risk? Don is, as Publius can tell you, extremely easy to smack around. The first thing you learn about him is that he cannot add two and two. The second is that he talks what he cannot walk. Why didn't our business leaders just do what Publius did, hit the dude hard? He folds every time.

Think Kim Jong Won!

November 15, 2018

Great article by Jacob Schlesinger in the Wall Street Journal today shows that Dumb Don was as ill-informed about trade thirty years ago, before the information revolution conferred huge advantages on our companies, as he is today.

Schlesinger shows that Don never saw Walmart coming, never noticed it pass him by and cannot see it now in the far distance ahead of him. It's not just that Don is the most antibusiness president in the history of the Republic. It's that he doesn't understand the first thing about business. This is why he's so wedded to socialist policies like import taxes.

Once again, we must look to the University of Pennsylvania. How did it graduate someone with a Planck Length intellect? What really happened when Don was registered there?

June 17, 2019

It is amazing that it has taken retailers this long to figure out what we published here over two-and-a-half years go: that consumption taxes on imports are very bad for business and, therefore, for the nation. A great piece by Nelson Schwartz and Sapna Maheshwari in the New York Times today shows just how dumb Dum Don is.

But the retailers's mistake was not lashing out immediately. They've let the Trumpistas go on with this ruinous policy for far, far too long.

#Walmart #DougMcMillon #Apple #Oracle #IBM #Cisco #McDonalds #DonaldTrump #DumbDon #DudleyAlthaus #JohnLyons #WilliamMaudlin #ShawnDonnan #TomMitchell #IsabelReynolds #TakashiHirokawa #RobinWiggelsworth #MaryChilds #KathyChu #JuroOsawa #TimHiggins #GinnyRometty #VinduGoel #AndrewBrowne #RichardWaters #TedMann #Carrier #UnitedTechnologies #TrumpTaxes #TaosTurner #PaulKiernan #JustinLahart #WallStreetJournal #FinancialTimes #NewYorkTimes #Bloomberg #JulieJohnsson #DennisMuilenberg #Boeing