Wal-Mart: Still a Pioneer in SCM

Wal-Mart, a pioneer in SCM, has recently jumped on the sustainability bandwagon. In fact, an entire page on their website is devoted to just sustainability. One of those initiatives is package reduction. According to their website, in May of 2009, they completely transitioned over to selling only condensed detergent bottles vs. the older bulkier containers.

From the website:

"In three years, Wal-mart expects to sell more than 800 million bottles of concentrated detergent. As a result, we anticipate saving 400 million gallons of water, 95 million pounds of plastic resin and 125 million pounds of cardboard. To put the water savings alone into perspective, we are saving the equivalent of 100 million showers, or one car wash for every car in California! Yes, that’s a lot. But our stores sell about a quarter of all the liquid laundry detergent in the U.S, so the potential savings in natural resources could be four times greater if the entire retail industry makes a similar transition."

Not only is this is a prime example of Wal-mart leveraging their tremendous buying power over their suppliers, it is a good example of product design and the supply chain. Not only does this initiative have the positive environmental results above, it saves transportation costs by pushing X number of product in a lower Y number of trucks, trains, etc.

Another prime example is from a Journal of Commerce article regarding their toy packaging. The changes shaved $3.5 million from their supply chain costs.

Quote:

"The slimmer packaging, in some cases amounting to as little as a one-inch reduction in the cardboard that houses individual toys bound from Asian factories to the United States, added up to 727 fewer ocean containers for the retailing giant. The company also saved 1,300 barrels of oil.

"Our goal is to be better for the environment and to save money," Gary Maxwell, senior vice president of international supply chain at Wal-Mart Stores, told the annual meeting of the Council of Supply Chain Management Professionals in Chicago."

Keep in mind this is only their toys segment which constitutes a small amount of what could be 100's of thousands if not millions of other products. Many more gains can be made monetarily and environmentally in their supply chain. This a good example of how cost reduction and increased profits aren't necessarily at odds with sustainability and the environment.