MEMBERSHIP
BLOG
MAGAZINE
EVENTS
ACADEMY
RESOURCES
ABOUT

Success stories
COMMUNITY & CONNECT
PROCUREMENT STRATEGY
CATEGORY INTELLIGENCE
BACK

Sustainable Sourcing: How does Walmart measure up?


05-May-11 16:14

“A best practice that is foundational to Walmart’s sustainability initiative is measurement,” the company’s director of sustainability, Jeff Rice, told Triple Pundit blog recently. Hardly headline-grabbing, but not to be taken lightly – it’s key to a green agenda.

 

And let’s be honest, it’s important that the company is measuring intently, how else would it know that it’s falling short of its stated aim to reduce carbon emissions in stores, clubs and distribution centres by 20% by 2012? According to its 2011 Global Responsibility Report, it’s a little behind on that goal, but has still made some huge leaps towards its sustainable targets.

 

But I’d argue that if you only take into account the failure to hit several targets, you miss the point.

 

“Identifying key sustainability metrics and setting aggressive targets to improve has unlocked the creativity of our associates to find creative solutions to sustainability and business opportunities,” said Rice.

 

It’s a familiar tactic of an ambitious project to set high expectations and indeed, when you look at the report, it’s clearly been a catalyst for innovation and efficiency programs.

But if it sounds simple to say, I’d argue that it’s not. One of Walmart’s victories was to improve truck fleet efficiency by 65% between 2005 and 2010. Considering the scale of the company, that’s a hefty achievement and one which came through a close and potentially painful examination of the data from the existing fleet and investment in technologies and practices that lead to efficiency.

 

So, not only is this kind of detailed measurement about highlighting progress to consumers and concerned investors, it highlights where the company is making gains and where there’s room for improvement.

 

In Walmart’s case, the company discovered that separating the engine and the generator to run the air conditioning was a good idea – shutting down the engine while the driver slept at night on long distances, they saved $25m per year on fuel costs.

 

That figure will mean something to CFOs and shareholders alike. But beyond that it’s a credible vindication of a scheme that is working, something worth shouting about.

 

The message is being heard – the majority of Fortune 500 companies issue a CSR report and the number of companies reporting to the Carbon Disclosure Project have increased tenfold in seven years.

 

But effective measurement does more than that, even. It possibly makes you more appealing to customers who want to know all about your supply chain and your energy usage. If giants like Walmart are able to put the investment into projects such as their fleet management schemes, there’s plenty to share with suppliers that know that are able to work with them on it.

“Through SEEP [Supplier Energy Efficiency Programme], we help provide an energy audit based on knowledge we have from making our operations more efficient. And we share best practices on things like lighting technology that we know will cut both their green house gas emissions footprint and their electric bill,” notes Rice.

 

So maybe falling short of an aggressive target isn’t that bad. If it’s justified through effective and comprehensive measurement, it underlines the areas that need addressing, shows where there’s opportunities for collaboration and innovation and adds credibility to what a company has achieved.

 

Businesses and procurement functions that are slow to work out how they can and should be tracking these kinds of figures may be missing out more than they think.

 

 

 


Steve Hall Steve Hall is Editor at Procurement Leaders. Steve oversees the publication of Procurement Leaders Magazine and draws on a decade in business publishing, providing quality coverage to senior business leaders. Follow Steve on Twitter: @thestephenhall

 
Subscribe to feed Subscribe to feed
Rating (0 vote/s)
 

SUBSCRIBE TO NEWSLETTER


FREE 

SUPPLEMENTS

PREDICTIVE INSIGHT TO FUEL WORLD-CLASS DECISIONS

Unique, high value research and analysis provides CPO's with the information they need to make the right strategic choices.

FREE 

WHITEPAPERS

OFFERINGS

 

ABOUT

MEMBERS

FOLLOW US

AWARDS

MEMBERSHIP

 

COMMUNITY

 

MAGAZINE

 

EVENTS

 

ACADEMY

 

RESOURCES

CONTACT US

 

ABOUT US

 

ADVERTISE WITH US

 

FREQUENTLY ASKED QUESTIONS

 

WHAT'S NEW

SIGN IN

 

BECOME A MEMBER

 

REQUEST A DEMO

 

JOB SEARCH

LINKEDIN

 

TWITTER

 

GOOGLE+

 

RSS

 

NEWS ARCHIVE

Procurement Leaders Awards

TERMS OF USE . PRIVACY POLICY . COOKIE POLICY

© Sigaria Ltd and its contributors. All rights reserved. www.sigaria.com

Sigaria accepts no responsibility for advice or information contained on this site although every effort is made to ensure its accuracy. Users are advised to seek independent advice from qualified persons before acting upon any such information.