Supply Excellence — Paper, Plastic or BYOB (bring-your-own-bag)?

Paper, Plastic or BYOB (bring-your-own-bag)?

May 12th, 2008 · by Ellen Terchila · No Comments · best practices, enviro/social sustainability, oil/energy, sourcing, supply management

We’ve come a long way since San Francisco’s City Council banned plastic bags 13 months ago. At the time, the move seen as more of a late night TV punch line than a serious attempt to promote environmental sustainability. But in the wake of more legislated bans (as China, Ireland, Uganda and a host of cities across the globe have done) and demands by consumers that the brands they buy move to green their products, you can see why companies are exploring their packaging to see where improvements can be made.

Just to get our head around the scale of the numbers involved here, let’s take China’s recent ban on plastic bags. Whether you think it’s a case of pre-Olympic greenwashing or not, it’s hard to deny that a move which saves an estimated 37 million barrels of crude oil per year is a step in the right direction. To put that in perspective, the US imports about that much crude from OPEC nations every week. So when we extrapolate the numbers in anticipation of more cities and countries following China’s lead, you can see we’re not talking about an insignificant drop in the consumption barrel.

So should your company consider shifting to more sustainable bags and packaging? Here are a few benefits to consider:

It’s an “easy win” - Many companies are interested in making sustainability a long term goal, but struggle to identify where to start. Unlike your product line, which involves a host of suppliers and manufacturers that are heavily integrated in the daily operations of your organization, your packaging supplies are pretty straight forward. In most cases, spend is attractive enough to entice new suppliers’ interest in gaining your business. So pulling the trigger on new packaging is a very attainable, short term opportunity.
Suppliers want to collaborate with you - Many packaging manufacturers are being pressed to identify innovative solutions for their customers. Take advantage of their knowledge and creativity, and allow them to share best practices in “green” with you. You can benefit from their experience!
Bags = Moving Billboards - We’ve known for a long time that branded bags a great way to market a company. Therefore, it’s a no brainer that easily identifiable “green” bags can help promote your brand AND your commitment to green efforts.
Customer demands - Judging by the sheer volume of “green” product ads on TV these days, customers are either demanding more environmental awareness from companies OR Madison Avenue is very out of touch. Consumers appear to be rewarding companies that adopt sustainability and punishing those that don’t. Dragging your feet can damage the brand loyalty your company has worked hard to create and maintain.
Legislation - If consumer demand doesn’t sway you, will a global patchwork of bag bans? If not, how will your various locations cope with the local mandates? It’s better to be seen as a leader, out in front of this issue, rather than playing catch up later.
You’ve got options - There are a host of vendors offering a very wide range of packaging choices - from 100% post consumer recycled bags to plastic bags made of recycled materials. And if you’re flexible on things like color, the cost for making the switch can be reduced significantly.

Ellen Terchila is a Senior Consultant on Ariba’s Spend Management Services team. Ellen specializes in strategic sourcing in the retail sector.

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