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What Does Walmart Know?

Last week I visited Walmart’s annual sustainable packaging conference in Bentonville, Arkansas. I learned that the first such meeting took place in a conference room in Walmart’s headquarters just three years ago and 50 people attended. The 2008 version needed a massive convention center and was bursting at the seams with suppliers, shippers, and buyers of eco-friendly packaging. You can see where this trend is going.

So what does Walmart know that the rest of the world may still be trying to understand? CEO Lee Scott reportedly told his employees and suppliers alike to reduce wasteful, non-recyclable packaging, because Walmart was paying for waste twice - - once when the package came in the door, and once when they paid someone to haul it away from the back of the stores. Walmart saw the opportunity to benefit the environment and their bottom line at the same time.

But how does the world’s largest retailer cut the waste from so many products? They computerized a scorecard, evaluating packaging on a variety of sustainability metrics that flow all the way back down the supply chain. Vendors get a score for the packaging of each item and are then automatically directed to suppliers of products that are more sustainable any time the packaging comes up short.

Walmart took a simple problem - - but a massive one - - and created a clever, self-perpetuating solution. Bottom line? Less waste, more recyclable content (that Walmart now separates and recycles at a profit), better economics, better environment.

Who says you can’t judge a book, or any other product, by its cover?!

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  • Amanda Benson

    Great idea on how to successfully control waste management, it’s nice to see a CEO actually thinking about the environment for a change. To think that this idea actually improves the overall profit is a sure sign that corporations need to follow this lead.

    This article makes me think about the 7-11 stores throughout Asia who give you plastic bags with ANY order; even if you buy a pack of gum you get a bag. They must be losing money somewhere along the line. Would love to know the statistics of how much they spend on plastic bags per year but that’s another story……!

    VeoliaES - Waste Management Australia

  • Jay Tatum

    Okay, so WalMart is making a difference, one CEO at a time. Lee Scott simply provided good leadership to a huge problem. Edward Deming would be proud. Remember his formula - Quality equals the Results of Work Effort divided by the Total Costs? Yes, they may have taken a simple problem and provided a simple solution, but it makes a huge difference.
    Now I am critical of WalMart in the Global Village in which I live. I am suspicious of their motives to rule the world in every way, but CEO Lee Scott could revolutionize the waste management industry and save the planet by simply providing consistently strong, leadershipat WalMart and extending this to others as well.
    WalMart is something of an enigma to those of us privileged to be educated in leadership and management theory and practice. Sometimes the simplest solution to any problem is that of leader; not being right or wrong, just being willing to take the first step. How complicated is that?