Impact of the Wal-Mart Sustainability Scorecard [1]
There is always risk when you’re an innovator. That’s why many persons experienced both excitement and trepidation when Wal-Mart officially implemented its packaging scorecard on Feb. 1. The company is using the scorecard to help achieve its sustainability goals of reducing waste, using renewable energy and selling sustainable products.
The scorecard requires suppliers to enter data into a program that allows Wal-Mart buyers to compare each supplier’s sustainability credentials. It has become a key tool for the retailer’s buyers to use when they make purchasing decisions.
As of the start date, Wal-Mart estimates that so far, nearly 6,400 of its vendors have submitted data on more than 97,000 products. In becoming the first major U.S. retailer to initiate such a sweeping sustainability program, Wal-Mart deserves praise. However, in the early weeks of its implementation, a lot of concern is being expressed.
Some say Wal-Mart’s primary goal is to reduce its own supply-chain costs. Others claim the scorecard will drive up suppliers’ costs as they redesign packaging and logistics. One estimate put Procter & Gamble’s cost of complying at $200 million. By Wal-Mart’s own estimates, about 20 percent of its suppliers have not yet submitted scorecard data. Most who haven’t complied are smaller vendors.
The scorecard includes several key metrics: greenhouse gas emissions; product-to-package ratio; space utilization; the amount of renewable energy used in package production; and emissions related to the distance the packaging materials are transported.
One industry consultant expressed concern that some of the metrics on which the scorecard is based are not finalized, yet buyers are making decisions based on the scorecard results. He pointed out that some materials definitions are still listed as “draft” on a website for suppliers. He also said use of renewable energy was supposed to be extra credit, yet it’s being given a 10-percent weight in each supplier’s score, which could exclude them from purchases.
Despite a yearlong testing stage before the Feb. 1 launch, Wal-Mart admits that it will need to continue refining the metrics.
Perhaps the biggest concern about the whole process is the fact that no matter what Wal-Mart does, this sustainability program will become a de facto standard for the industry—the global muscle of this retail giant commands that much attention.
So, it is important that Wal-Mart gets it right. That’s the responsibility of being a leader
["Impact of Wal-Mart scorecard creates concerns" by John Kalkowski, Editorial Director -- Packaging Digest, 3/1/2008 - http://www.packagingdigest.com/article/CA6536405.html]
Posts in Impact of the Wal-Mart Sustainability Scorecard [1]:
April 20, 2008 by
Emily Ryan | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | No Comments »
Smorch, P. “Nine steps to greater profitability, sustainability. ” Packaging Digest 1 Mar. 2007: 46-48. ABI/INFORM Global. ProQuest. RIT Lib., Rochester, NY.. 20 Apr. 2008
This article from Packaging Digest reviews ways that a company can leverage the Wal-Mart scorecard requirements to gain competitive advantage and differentiation in other areas. Most of the nine categories (1. package design, 2. material optimization, 3. shelf impact, 4. SKU consolidation, 5. alternative packaging, 6. productivity improvements, 7. material handling, 8. warehousing, and 9. transportation) end up going back to the design of the item and its packaging. By using Design for Environment (DfE) principles, a sustainable consumer packaged goods company (CPG) would address all areas of the packing impact on the environment – from transportation to process modification at the manufacturing plant. Companies should review all of the possible alternatives and innovate to develop new packaging options as well.
April 10, 2008 by
Emily Ryan | Filed under: General,Impact of the Wal-Mart Sustainability Scorecard [1] | No Comments »
I attended the RBJ Environmental Leadership Symposium this past Tuesday and was impressed at how much impact the Walmart Scorecard has actually had on local businesses and their environmental initiatives. In the panel on “Business Advantage to Being Green”, there were two case studies on packaging companies that have made many changes in order to be part of the Walmart supply chain.
According to the panelists, the Walmart Scorecard allows suppliers to use specific metrics in order to evaluate themselves relative to other suppliers.
For the packing industry, the metrics were based on the “7 R’s of Sustainable Packaging”:
- Remove (packaging)
- Reduce (packaging)
- Reuse (packaging)
- Renew (able)
- Recycle (able)
- Revenue
- Read
Diamond Packaging:
- Has reduced packing weight, reduce paperboard usage, and eliminated non-sustainable components such as shrinkwrap
- Uses wind energy to produce packaging
OrCon Packaging:
- Precon Thermoforming uses recycled soda bottles
- Fibercel packaging is reusable over and over again and provides a visible sign of reusability
- All raw materials from recycled markets
- Developed reusable containers for Walmart specifically
- Has made many resources available via the web for education
March 26, 2008 by
Emily Ryan ,
LAUREN KERWAWYCZ and
| Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | 2 Comments »
Hello Tacit Knowledge discussion group,
To familiarize myself with this topic, I reviewed the definition of “tacit knowledge” from wikipedia and here are some points that I though could help get the discussion going:
tacit knowledge = knowledge that people carry in their minds and is therefore hard to access; it provides context for data as well, such as people, places, ideas, and experiences
- People may not be aware of the knowledge they possess
- People may not be aware of its value to others
The process of transforming tacit knowledge into explicit knowledge (knowledge that is easy to communicate) is called “codification” or “articulation”.
Tacit knowledge is crucial to innovation development and could lead to unintended consequences if it is not included.
In environmental management, it seems that tacit knowledge would be a requirement of developing effective mitigation systems or processes. An outsider would need to become deeply involved in the work in order to gain that tacit knowledge without help from others.
I’m looking forward to working with you all,
- Emily
