The requirements for winning a Walmart supplier contract are dramatically changing. The following exclusive interview with Jeff Rice, Director of Sustainability for Walmart, profiles how Walmart’s adoption of sustainability is creating new opportunities for suppliers that can be competitive on price, product quality, delivery and now…sustainability.
Three keys to being a successful Walmart green supplier
Three key steps for winning competitive advantage in Walmart’s sustainability scorecard system of competitively ranking suppliers are:
Measure/report on environmental footprint
Walmart wants their suppliers to measure and report their environmental footprint for the company and products. This reporting should also include the supplier’s supply chain because Walmart is finding that often it is the supplier to a Walmart supplier that actually has the largest emissions stream.
The Sustainability Consortium is the top place to begin when developing a supplier environmental footprint. The Sustainability Consortium is an organization that Walmart belongs to and actively participates in. The Consortium provides a common platform of science and knowledge across 150 products in nine categories. They are now rolling out tools for measuring environmental footprints that align with the tools used by Walmart.
In Walmart language, a “hotspot” is an opportunity that offers the most bang for the buck. Focusing upon hotspots is one of Walmart’s best practice management tools. As a potential supplier to Walmart, a company should identify their environmental impact hotspots and have a plan for addressing them. Hotspot examples could be the amount and type of product packaging, the energy consumption of the largest supplier in a supplier’s supply chain or the environmental footprint of a product used by Walmart customers.
Another key to being a Walmart supplier is to recognize that one of Walmart’s core strategies is to continuously improve upon their operations, products, costs and prices. It is part of their DNA to have high expectations of themselves and their suppliers, and to believe that performance will be better tomorrow. This is also how Walmart is implementing its sustainability program. Walmart’s goal is to continuously improve the sustainability of their operations, product offerings and supply chain. They expect all of their products and suppliers to be more sustainable. A supplier that mirrors Walmart’s approach by utilizing a continuous improvement process to increase the sustainability of the company and products has taken a huge step toward aligning with Walmart’s sustainability procurement expectations.
Exclusive interview: Jeff Rice, Director of Sustainability for Walmart
The following video interview with Jeff Rice, conducted at the Sustainable Brands 2012 conference, is a “must watch” if your company is seeking to win or retain a Walmart supplier contract. The key best practices that Jeff outlines in this video are now being implemented.
For example, Walmart’s electronics buyers discovered through Walmart’s sustainability analysis process that only 30 percent of the laptop computers she purchased had manufacturer pre-installed advanced settings that puts a computer in “sleep mode” when it was not being used. She has now shifted her computer order so 100 percent of the laptops she buys have advanced “sleep mode” settings pre-installed by the manufacturer.
This shift in computer procurement standards is estimated to reduce CO2 emissions by hundreds of thousands of metric tons plus save customers on their electric bills. Now imagine being the computer vendor who could not meet this more sustainable buying criterion and imagine the opportunity for the manufacturer who could. That is an example of the future in supplier selection by Walmart where they will be searching for vendors that offer value along with sustainable solutions.
Bill Roth is the Founder of Earth 2017. He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues.