17 G REENING THE S UPPLY C HAIN WMT had been spending substantial amount of energy in greening its supply chain, a strategic imperative for the company. They outlined the goals and commitments that they expected from their suppliers. Michael T. Duke (Duke), Vice-Chairman, International Division, WMT (In February 2009, Duke became the President and Chief Executive Officer, WMT) said: Achieving the goals that we lay out today is going to require a common commitment. It’s going to take even stronger and deeper relationships. And it is going to take all of us working together.… We are expecting more of ourselves at Wal-Mart, and we will also expect more of our suppliers. 18 WMT had been asking miners to adopt stringent social and environmental standards. Pam Mortensen, chief buyer for the jewelery department at WMT commented that by 2010, 10 per cent of the gold, silver and diamonds sourced by the company will be respon- sibly produced. By bringing together the top executives from its suppliers to a summit, WMT began asking the right questions. They found that basic questions like, why the product had been packaged in a certain way forced the suppliers to reassess their operations in new ways. In 2006, WMT developed a packaging scorecard for its US operations. By this, the company aimed at reducing packaging through its supply chain by 5 per cent by 2013. 17 ‘Wal-Mart Goes Green with Earth Month Campaign’, Prism Insight, 4 April 2008. 18 Press Release, ‘Wal-Mart Announces Global Responsible Sourcing Initiative at China Summit’, 22 October 2008. at Alliant International University on March 10, 2010 Downloaded from
126 R. N ANDAGOPAL AND A JITH S ANKAR R.N. A SIAN J OURNAL OF M ANAGEMENT C ASES , 6(2), 2009: 119–133 The scorecard indicated the product packaging standards of suppliers based on metrics like greenhouse gas emissions, use of renewable energy during the production of packaging materials, space utilization, emissions related to the transportation of packaging materials and product to package ratio. Suppliers received a score in each category and viewed their ratings compared to their competitors in each product category. This scorecard, in addition to helping the suppliers assess their contribution in helping WMT achieve its green goals, also helped buyers to make informed purchasing decisions. WMT engaged its suppliers with new agreements that required them to certify com- pliance with domestic laws and regulations related to environmental and social standards. The company expected to do this in a phased manner, starting with suppliers from China and then expanding this to all of its suppliers by 2011. By 2012, WMT expected its suppliers to procure 95 per cent of their production resources from institutions that followed the highest environmental and social practices.
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