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Unformatted text preview: ation of its suppliers to meet its
public goals. As a result, effective supplier measurement and motivation was essential. The
packaging network, under captain Matt Kistler, VP of package and product innovations, was
furthest ahead in this area. This group was in the process of implementing a web-based
scorecard that would evaluate each product’s packaging against nine metrics such as cube
utilization (percentage of total space used within a storage area, trailer, or container), recycled
content (percentage of recycled material contained within the packaging), and product to
package ratio (amount of packaging relative to size of product). The scorecard was developed
with input from the 200+ members of the packaging network, including NGOs, the EPA,
Walmart’s direct suppliers, packaging suppliers, and other stakeholders.f
On February 1, 2007, Walmart’s 60,000+ suppliers would be asked to begin using the scorecard
for a one-year trial period to determine how their packaging innovations, environmental
standards, energy-efficiencies, and use of materials rated relative to their peers. Beginning in
2008, Walmart would formally use the system to “measure and recognize its entire supply chain
based upon each company’s ability to use less packaging, utilize more effective materials in
packaging, and source these materials more efficiently relative to other suppliers.”55 The
scorecard was perceived as an important enabler for helping the company achieve its public goal
of reducing the packaging used by all of its suppliers by 5 percent between 2008 and 2013. If
achieved, this five-year program was expected to generate $3.4 billion in savings. The textiles
network also was getting close to making a similar online scorecard available to suppliers.
Ruben highlighted the importance of choosing the right metrics to measure suppliers, using the
electronics network as an example:
With metrics, what’s always been difficult is to figure out the things that you can
start with that are relevant either to the business or ultimately to the cust...
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This note was uploaded on 01/14/2014 for the course LGST 210 taught by Professor Sep during the Winter '10 term at UPenn.
- Winter '10