Store giant’s sustainability blueprint is 'wake-up call'

That’s the view of Fraser Ironside, Global Business Development Director of Chicago-based supply chain specialists Barloworld Optimus.

“Sure signs are emerging that Wal-Mart’s ambitious plans to work with suppliers to reduce packaging by 5% by 2013 has hit home with its suppliers. I’m not saying it’s a shock wave – yet – but I genuinely believe that Wal-Mart’s initiative is the wake-up call that industry needs to actively get up and do something about reducing energy consumption and emissions, and improve energy efficiencies”.

His comments come in the wake of Wal-Mart President and CEO Lee Scott’s unveiling of Sustainability 360 in February – challenging all Wal-Mart associates and suppliers to start thinking about how they’re going to remove non-renewable energy from its product lines.

The company’s 5% packaging reduction target equates to 213,000 fewer trucks on the roads, and 324,000 tons of coal and 67 million gallons of diesel fuel saved every year.

Other initiatives in Wal-Mart’s blueprint for the future include energy to be supplied from 100% renewable sources; zero waste; 25% reduction in solid waste in 3 years; all private brand packaging improved in two years and limiting product lines exclusively to those that sustain resources and environment.

“Lee Scott said he was both shocked and inspired by what he’d learned about Wal-Mart’s own footprint and significantly, that it is the company's goal to develop partnerships that help suppliers run more sustainable businesses and factories – and that’s the message that should now be registering” Fraser Ironside said.


He added that two phrases struck him as particularly telling in Lee Scott’s address…

“One, ‘we believe every business can look at sustainability in fact, in light of current environmental trends, we believe they will, and soon’ and two, ‘ …the integral role that associates play in helping Wal-Mart reach its (sustainability) objectives. All businesses have a role to play’''.

According to Fraser Ironside, recent research has shown that efforts to improve shipping and transport efficiency assumes a fairly low priority for most organisations, with some sources quoting fewer than one in ten actively involved in initiatives to make shipping and transport more efficient or planning energy reduction measures within the next twelve months.

At the same time, of those that are actively engaged in reducing their footprints, most say that they’re doing it for commercial reasons rather than any conscious wish to reduce energy consumption.

“So, if Wal-Mart wields the big stick on complacent companies, the move may be the most active step yet in conserving energy and reducing the carbon footprint of its supply chain”.

He said that a major switch in attitude is going to be called for over the next few years and that if it takes the clout of Wal-Mart to make it happen – albeit through persuasive buying power – that’s just fine. “The simple fact is that it has to happen – by whatever means – and if the reason is purely for commercial security rather than a genuine wish to conserve our resources, well so be it. Either way, companies need to understand is that there are substantial savings to be made, in terms of both cost and carbon, by redesigning their supply chains.

“Relocating warehouses, increasing rail transport and switching distribution centre configurations are moves that will have the greatest impact on reducing carbon emissions overall, but the bottom line is that the greatest reductions are only achievable at the design stage. That’s why it’s crucial that companies need to analyse their entire supply chain strategy and ensure that it’s designed not only in terms of the traditional levers of cost and service-level, but also in terms of carbon emissions”.

He said that since Lee Scott unveiled Sustainability 360, calls for carbon reduction software are showing sure signs of moving upwards… “The software is already available for companies to analyse the carbon footprint of their supply chains and then evaluate various different design configurations and transport options before needing to make any changes. By calculating the carbon footprint of any supply chain together with optimal designs based on cost and service levels, companies can often find ways to reduce costs and carbon emissions at the same time.

“Spurred on by Wal-Mart, now is the time to ensure the green image soaks through” he said.