Walmart leads initiative for greener supply chain management

May 24 2013

In 2005, Walmart executives made going green one of the company's top priorities, and the retail giant has made major strides in the past eight years to reduce its carbon footprint.

At the time, Walmart partnered with the Carbon Disclosure Project (CDP) as a way to measure its energy use and greenhouse gas emissions. What Walmart found was the vast majority of its energy use came from its suppliers' operations. An internal audit of all things pertaining to energy discovered that 90 percent of Walmart's emissions came from its chain of suppliers, a network that is now over 100,000 strong.

That was when the retailer started imploring its suppliers to look into their own energy usage and find ways to alleviate their carbon emissions. Walmart's pleas inspired a number of companies and has spurred several green initiatives across the corporate landscape. Many companies have looked to Walmart as a leader in green supply chain management, particularly after 2010 when the company vowed to cut roughly 20 metric tons of greenhouse gas emissions by 2015.

"That was the start of the supply chain program," said Dexter Galvin, head of CDP's supply chain initiative, in a recent interview with Midwest Energy News. "They started the trend."

Today, a number of businesses have started their own programs and made equally ambitious statements regarding the future of their operations. However, doing so requires a significant amount of effort, because reducing emissions from the supply chain means implementing solutions to build efficiency. Working with an integrated logistics company can help with this effort, but one company's decision to improve the energy efficiency of its supply chain can set off a chain reaction throughout numerous industries.

Galvin spoke with the news source about a number of his other partners that have followed Walmart's footsteps. Some include big-name players such as PepsiCo, Dell and General Motors. He indicated that they have begun to adjust their priorities when evaluating potential suppliers to consider their level of environmental friendliness.

"Traditionally, a lot of our members would make a 100 percent decision on whether to work with a supplier based on price and quality," he said. "What we're seeing now is companies like Vodafone and Dell are actually reducing the amount [of consideration] they give to price and quality, and basing, say, 20 percent of the supplier's score on sustainability issues."

Why local businesses must adjust their operations

In the Cleveland area, fighting economic challenges can be a daily occurrence. Companies need to gain every competitive advantage they can, and they certainly cannot allow their shortcomings to cause them to lose out on potential business. That's why local organizations that could potentially serve as suppliers to big-name enterprises must ensure their own logistics are handled in a way that is both efficient and environmentally friendly.

Working with a Cleveland logistics company can help these organizations obtain the solutions needed to reduce the environmental impact of their operations. Moreover, the speed and efficiency gained with this will help suppliers increase the quality of their own service, which will help generate future business opportunities.