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Yesterday, Procurement Leaders ran a story on the impact of Wal-Mart’s efforts to reduce excess packaging in the toys they carry. In addition to the reduced consumption of paper and plastic in the actual packaging, the article reports that the changes saved Wal-Mart 727 shipping containers and 1,300 barrels of oil in comparison to the previous year, which adds up to an impressive $3.5 million. It provides another shining example that companies can both increase their sustainability programs AND save money.
The package reduction program is part of Wal-Mart’s broader CSR (corporate social responsibility) program. Wal-Mart’s early CSR efforts, which were shaped by the former President of the Sierra Club, were greeted with skepticism by environmentalists and consumers. Yet, they’ve persevered and done an impressive job making good on their lofty promises … and saving money along the way. Procurement Leaders quotes Gary Maxwell, SVP of international supply chain at Wal-Mart, who stated “our goal is to be better for the environment and to save money.”
As the video below shows, Wal-Mart has been at this for quite some time. But with wins like this coming through, their work is paying off.
Packaging has long been identified as an easy win for companies looking to launch a sustainability program AND potentially save money. As companies continue to look for quick sustainability wins that are cost neutral or better yet, save money, in the current economic climate, packaging will be near the top of the list of categories to target.
Sure the CSR endeavors may get more traction and budget weight during the recovery, particularly if/when consumers demand it. But in the mean time, following Wal-Mart’s lead by addressing wasteful packaging is a good place to start. Obviously the scale of Wal-Mart’s imports make the savings in this case a small drop in a big bucket, but it’s a start. And if your organization is looking to truly boost their green bona fides (and NOT fall into a greenwashing trap), the small cost saving coupled with the boost to company credibility for promoting sustainability during a recession, could make the moves that much more valuable.
Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
4 responses so far ↓
1 David Rae // Sep 25, 2009 at 4:46 am
Thanks for the plug Justin - this is one of those happy articles which show just how big a difference procurement can make to the bottom line through sustainability initiatives.
And you’re also right to say that packaging provides a rich seam of opportunity. This story about Nokia saving €100m from reduced packaging from earlier this year on our sister site Sustainable Sourcing is a case in point…
http://www.sustainable-sourcing.com/2009/02/26/reduced-packaging-saves-nokia-e100m/
2 inhr » Blog Archive » Transparante organisaties en Maatschappelijk Verantwoord Ondernemen // Sep 26, 2009 at 7:20 am
[...] meer organisaties dit soort eisen gaan stellen. De grootste retailer ter wereld Wal-Mart is een voorloper op dit gebied en gegeven hun positie zal het niet verbazen dat er meer organisaties gaan volgen om ook op dit [...]
3 Justin // Sep 27, 2009 at 10:36 am
I think the package reduction program is a great initiate. I question the true validity of the statement “wasteful packaging”. On WM’s end this packaging is probably wasteful because they are the ones left having to throw away the bracing, airbags etc that are associated with securing product while in transit. It would be incredibly interesting to see how much more/less damage product WM has received during this program because I believe a lot of this “wasteful packaging” provided a lot of protection from damage. I don’t think in today’s economy product manufactures are adding additional costs to ship needless packaging.
4 Justin Fogarty // Sep 28, 2009 at 1:15 pm
Great questions Justin. As a father who’s had to spend a LOT of time digging into overly packaged toys (a scenario hilariously depicted in last night’s episode of Curb Your Enthusiasm), I assumed they meant “wasteful packaging” was that which we consumers are exposed to. But you bring up a great point since much of it could be the transit-oriented packaging. Unfortunately, I suspect stats on damaged products before and after any packaging modifications is proprietary data that would be unavailable. Perhaps some packaging vendors or transport trade groups could step in?
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