Global Logistics and Supply Chain Strategies - March 2008 - (Page 44)

Packaging Gets Renewed Attention as Sustainability Initiatives Take Hold BY JEAN V. MURPHY The right packaging can have a big impact on supply chain operations and costs, but it has been an often overlooked competency. Today’s focus on sustainability is changing that. P ackaging finished goods for shipment typically has been seen as a necessary but mundane part of the supply chain. That view rapidly is changing, however, thanks to an explosion of corporate sustainability initiatives. Suddenly packaging is getting renewed attention with an eye toward helping achieve sustainability goals. “Sustainability and material optimization are the biggest trends in packaging right now,” says Patrick Smorch, manager of packaging technology at Georgia-Pacific Innovation Institute, Atlanta. “Sustainability is largely focused on packaging because the consumer is very close to it and it is generally viewed as waste.” As with many supply chain trends, the prime catalyst for this movement is WalMart, the world’s largest retailer. Late in 2006, Wal-Mart CEO Lee Scott committed Wal-Mart and Sam’s Club stores to a 5 percent reduction in supply chain packaging by 2013. The company expects this initiative to prevent 667,000 metric tons of carbon dioxide from entering the atmosphere. Dollar savings are projected at $10.98bn, with Wal-Mart realizing about a third of that. To reach this goal, the company devised a new scorecard to evaluate suppliers based on their packaging performance. The scorecard was piloted in 2007 and officially went into use Feb. 1 this year. Wal-Mart buyers now use the scorecard as a tool when making purchasing decisions. The scorecard evaluates the sustainability of product packaging based on several key metrics, including greenhouse gas emissions, product-to-package ratio, space utilization, innovation, the amount of renewable energy used in packaging production and emissions related to the distance packaging materials are transported. Suppliers receive a score in each category and can view how they rate overall compared to their competitors. “The packaging scorecard helps everyone make better decisions that are good for business, our customers and the environment,” said Matt Kistler, senior vice president of sustainability at Wal-Mart, in a statement issued in conjunction with the Feb. 1 start date. “It’s important to us that our suppliers see the intrinsic value behind sustainability, both for their business and the environment.” As of Feb. 1, more than 97,000 products had been entered into the scorecard by 6,371 vendors. “It is a key responsibility of our suppliers to input new products and update packaging changes on an ongoing basis,” Kistler said. Some changes already are evident on the retail shelf. Driven largely by the WalMart initiative, major manufacturers like 44 MARCH 2008

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Global Logistics and Supply Chain Strategies - March 2008 Editorial GL & SCS Exclusive FastForward Up Front The Green in Green Think Inside the Box Have a Second Look Can't Happen Here Opinion: Stay in the Black as Your Workforce Fades to Gray Opinion: Four Critical Steps to Managing Change in the Supply Chain Industry Voices

Global Logistics and Supply Chain Strategies - March 2008

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