Engineering Out Cost: Wal-Mart Style

I have no doubt that when it comes to deploying policies that benefit the environment, Wal-Mart does it as much for PR value as saving money. But their latest announcement of working with suppliers to reduce packaging cost is smart business indeed. According to Reuters' write-up on the news, Wal-Mart will "push its suppliers to cut the amount of packaging used in products sold through the world's largest retailer, a move the company said will save it $3.4 billion." CNN's take is also worth reading. The "green spin" on the annnouncement is that Wal-Mart intends to "prevent millions of pounds of trash from reaching landfills". This will "stop 667,000 metric tons of carbon dioxide from reaching the atmosphere." From a business perspective, "the move would also cut the amount spent on packaging in the supply chain by $10.98 billion overall." Given Wal-Mart's historic GM-like approach to dictating policy to its suppliers, I have do doubt that these new packaging requirements will be rammed down suppliers' throats without compromise. Still, the program is an example that shows good business decisions can also make for good environmental ones at the same time. Just don't ask too much about the process and supplier ramrodding behind the scenes. Sometims eco-sausage making is best left a trade secret ...

Jason Busch

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