June 2012 | Commentary | Checking In

Green Leadership for Lean Times

Tags: Green Logistics, Retail

Keith Biondo is the publisher of Inbound Logistics magazine.

Current economic conditions are cooling enthusiasm for green initiatives in some quarters. But not in Bentonville, Ark., where Walmart recently released its 2012 Global Responsibility report. Someone once said, "as Walmart goes, so goes the nation." I don't know if that's true, but despite lean times, the retailer is providing leadership in supply chain sustainability.

Back when the economy was humming along in 2005, Walmart set a sustainability goal of doubling fleet efficiency by 2015. In 2008, the company delivered three percent more product while driving seven percent less, a savings of almost 90 million miles that year. Walmart also set what it recognized as vague company-wide goals for overall sustainability: To be supplied 100 percent by renewable energy; to create zero waste; and to sell products that sustain people and the environment. The retailer didn't know exactly how or when they would achieve these goals. But as with everything Walmartian, they wanted to be ambitious. And they still are.

Lofty goals? Yes, but no detail is too insignificant. Consider the replacement cap program for Glade aerosols, conducted in partnership with SC Johnson, that saved approximately 234,000 aerosols from the trash. What a great example of the business case for green. Walmart makes the money previously sent to the landfill, but the environmental ripples are far-reaching considering how much energy it took to make the metal, manufacture the cans, fill them with product, and ship them. All those savings go beyond Walmart and benefit their extended value chain partners.

Other notable achievements from the Global Responsibility report:

  • In 2011, Walmart US prevented more than 80 percent of its waste from going to landfills, returning more than $231 million to the bottom line.
  • Walmart US improved private fleet efficiency by almost 69 percent in 2011 vs. 2005.
  • The retailer delivered 65 million more cases while driving 28 million fewer miles in 2011.
  • Walmart is working with vendors globally to reduce packaging waste.
  • The Environmental Protection Agency ranks Walmart as the second-largest onsite green power generator in the United States, generating 1.1 billion kilowatt hours annually.
  • Walmart is working with Eaton, Meritor, Freightliner, and Peterbilt to co-develop more fuel-efficient and/or hybrid tractors.

For Walmart, being green and sustainable is core to operating efficiently, and that is closely tied to what they call their "productivity loop." They believe that loop is central to keeping their marketing edge.

Bottom line: Walmart may undertake green initiatives for altruistic "global responsibility" reasons, but being green keeps them lean and efficient, and tunes their productivity loop to keep prices as low as possible.