Impact of Wal-Mart scorecard creates concerns
John Kalkowski, Editorial Director -- Packaging Digest, 3/1/2008 2:00:00 AM
There is always risk when you're an innovator. That's why many persons experienced both excitement and trepidation when Wal-Mart officially implemented its packaging scorecard on Feb. 1. The company is using the 
scorecard to help achieve its sustainability goals of reducing waste, using renewable energy and selling sustainable products.
The scorecard requires suppliers to enter data into a program that allows Wal-Mart buyers to compare each supplier's sustainability credentials. It has become a key tool for the retailer's buyers to use when they make purchasing decisions.
As of the start date, Wal-Mart estimates that so far, nearly 6,400 of its vendors have submitted data on more than 97,000 products. In becoming the first major U.S. retailer to initiate such a sweeping sustainability program, Wal-Mart deserves praise. However, in the early weeks of its implementation, a lot of concern is being expressed.
Some say Wal-Mart's primary goal is to reduce its own supply-chain costs. Others claim the scorecard will drive up suppliers' costs as they redesign packaging and logistics. One estimate put Procter & Gamble's cost of complying at $200 million. By Wal-Mart's own estimates, about 20 percent of its suppliers have not yet submitted scorecard data. Most who haven't complied are smaller vendors.
The scorecard includes several key metrics: greenhouse gas emissions; product-to-package ratio; space utilization; the amount of renewable energy used in package production; and emissions related to the distance the packaging materials are transported.
One industry consultant expressed concern that some of the metrics on which the scorecard is based are not finalized, yet buyers are making decisions based on the scorecard results. He pointed out that some materials definitions are still listed as “draft” on a website for suppliers. He also said use of renewable energy was supposed to be extra credit, yet it's being given a 10-percent weight in each supplier's score, which could exclude them from purchases.
Despite a yearlong testing stage before the Feb. 1 launch, Wal-Mart admits that it will need to continue refining the metrics.
Perhaps the biggest concern about the whole process is the fact that no matter what Wal-Mart does, this sustainability program will become a de facto standard for the industry—the global muscle of this retail giant commands that much attention.
So, it is important that Wal-Mart gets it right. That's the responsibility of being a leader.
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The initiative started by WalMart is the right thing to do for the next thousand years. Pushing it to happen now, and not 20% per year over five years is just plain politics and nonsense.
Walmart does not talk about the carbon foot print they leave when their China made product arrive by Air and Sea, otherwise most of their suppliers would be toast. Quite the hypocrisy being played out.
Pete Johnson - 2008-19-3 17:33:00 EDT -
I feel that sometimes we forget the retailer’s needs, the bottom line is sales and economics the purchaser consciously and unconsciously dictates what type of packaging they prefer.
Retailer has to play to the need of customers, size, shape, price, color and quantity is driven by customers and end users, we should consider the retailer and end user when designing the sustainability score card. The whole idea of pack aging score card is pre mature, more time and research is needed .
Bottom line is that the sustainability and score card should be adaptable to economic conditions, sales retailer and customer needs.
Lydia Shahbazian - 2008-16-3 13:40:00 EDT -
In the retail world of packaging, size matters. Now that some say "the leader" in retail packaging is greener and sustainable, the American public is no fool. Walmart stole the market-place for cheaper and the attitude of "why pay more when one can pay less"; kudos to them. But when the giant found out that the lower price meant lower quality, by the time they (WM) reacted, the customer was going back to other sources for quality.
Now enters smaller and greener packaging playing on the emotions of the American public; yet the prices have gone up. One might think that a smaller package has smaller product or should have a lower cost.
One of the articles on Packaging Digest states that Walmart is the leader, yet my colleagues feel just the opposite as the leader is faultering. The mega-stores opened in a record pace as the falling (closing) will be even faster.
As to the American public trying to recycle and save the world, my hats off to all as I do not shop at the mega-marts. I support what drives the American dream; support the community "mom & pop" stores.
David Mitchell - 2008-11-3 12:47:00 EDT
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