{"id":23851,"date":"2017-11-15T16:17:49","date_gmt":"2017-11-15T21:17:49","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/supplier-scorecards-walmarts-push-for-a-cleaner-supply-chain\/"},"modified":"2017-11-15T16:17:49","modified_gmt":"2017-11-15T21:17:49","slug":"supplier-scorecards-walmarts-push-for-a-cleaner-supply-chain","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/supplier-scorecards-walmarts-push-for-a-cleaner-supply-chain\/","title":{"rendered":"Supplier Scorecards: Walmart\u2019s Push for a Cleaner Supply Chain"},"content":{"rendered":"<p><strong><span style=\"font-size: 14.0pt\">From Stores to Supply Chain: Broadening its Sustainability Efforts <\/span><\/strong><\/p>\n<p>Walmart, the world\u2019s largest retailer, has successfully introduced innovative and scalable, low-cost sustainability initiatives across its 11,695 stores. It was among the first retailers to make sustainable products available at little or no extra cost to customers at a time when such products typically came at a higher price. Walmart has also taken steps to optimize its energy usage and it is currently the largest commercial solar energy user in the U.S. More recently, the company has broadened its sustainability efforts from a focus on its internal operations to include external supply chain considerations\u00a0<a href=\"#_ftn1\" name=\"_ftnref1\">[1].<\/a><\/p>\n<p>Walmart\u2019s shift towards a supplier focused sustainability strategy came partly in response to growing research that highlighted sustainability risks embedded in supply chains. The company\u2019s NGO partners, namely the Environmental Defense Fund (EDF) and The Sustainability Consortium (TSC), have attributed as much as 80% of the greenhouse emissions associated with the U.S retail and consumer goods sector to its supply chain <a href=\"#_ftn2\" name=\"_ftnref2\">[2].<\/a><\/p>\n<p><strong><span style=\"font-size: 14.0pt\">Walmart\u2019s Strategy: Incentivizing Suppliers and Buyers to Reduce Emissions <\/span><\/strong><\/p>\n<p>As part of its initiative to reduce emissions across its supply chain, Walmart has engaged its extensive global network of over 100,000 suppliers to work towards this goal by introducing \u201cLive Better\u201d scorecards\u00a0<a href=\"#_ftn3\" name=\"_ftnref3\">[3]<\/a>. The scorecard initiative was rolled out in 2009 and the company began by asking its suppliers to answer 15 questions to assess the sustainability of their operations in four areas \u2013 energy and climate, material use, natural resources, and community. The scorecards have since evolved to include 100 category metrics which Walmart ranks on a scale from 1 to 100. Top-ranking suppliers are recognized by Walmart and are often rewarded with promotion space on Walmart\u2019s e-commerce site\u00a0<a href=\"#_ftn4\" name=\"_ftnref4\">[4].<\/a><\/p>\n<p>Leveraging its position as the largest retail relationship for many of its suppliers\u2013 representing over 30% of business for some\u2013 Walmart has effectively created incentives for its suppliers to evaluate and report their greenhouse gas emissions\u00a0<a href=\"#_ftn5\" name=\"_ftnref5\">[5].\u00a0<\/a>To that end, the company has committed to purchasing over 70% of products sold in its stores from suppliers that use the scorecards to report the substantiality of their products by the end of 2017\u00a0<a href=\"#_ftn6\" name=\"_ftnref6\">[6].<\/a> Walmart has also aligned its core buying practices around this goal by making sustainability objectives count for roughly 5% of buyer performance metrics. Buyers receive training and access to \u201cBuyer Tool Kits\u201d to help them identify suppliers that are able to produce sustainable products at little or no additional cost to consumers\u00a0<a href=\"#_ftn7\" name=\"_ftnref7\">[7].\u00a0<\/a>Top performing buyers in each business unit receive financial rewards and a \u201cSustainable Buyer of the Year\u201d award\u00a0<a href=\"#_ftn8\" name=\"_ftnref8\">[8].<\/a> Walmart&#8217;s buyers have been particularly effective in working with its toy and detergent suppliers to reduce toxins and packaging waste\u00a0<a href=\"#_ftn9\" name=\"_ftnref9\">[9].<\/a><\/p>\n<p>Beyond its inherent sustainability benefits, the scorecard program also provides Walmart with a growing database of supplier sustainability progress. In partnership with The Sustainability Consortium, Walmart has built a Sustainability Index through which the company can evaluate individual supplier\u2019s emissions reduction progress against a benchmark\u00a0<a href=\"#_ftn10\" name=\"_ftnref10\">[10].<\/a><\/p>\n<p><strong><span style=\"font-size: 14.0pt\">Recent Initiatives: \u201cProject Gigaton\u201d<\/span><\/strong><\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Gigaton.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-23835\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Gigaton.png\" alt=\"\" width=\"261\" height=\"579\" \/><\/a><\/p>\n<p>In the Spring of 2017, Walmart launched Project Gigaton which enlists the support of 250 of its major global suppliers to reduce emissions in their operations and supply chain. The project aims to help Walmart achieve its target of eliminating 1 gigatons (1 billion tons) of GHG emissions from its supply chain by 2030, which according to the company is commensurate with removing more than 211 million vehicles off U.S roads for a year\u00a0<a href=\"#_ftn11\" name=\"_ftnref11\">[11].<\/a><\/p>\n<p>Project Gigaton signals Walmart\u2019s continued commitment to reducing emissions across its supply chain by working closely with its suppliers. The project will afford Walmart greater visibility into its supply chain and into the suppliers which contribute most to its Gigaton reduction targets so that the company can build relationships with those who do while scaling back ties with those who do not. Although the project is not mandatory, Walmart is banking on voluntary participation from its leading sustainability suppliers\u00a0<a href=\"#_ftn12\" name=\"_ftnref12\">[12].<\/a>Unilever and Land O\u2019 Lakes were among the first to sign on and the program has also received more recent commitments from Apple, Amazon, Google, and PepsiCo\u00a0<a href=\"#_ftn13\" name=\"_ftnref13\">[13].<\/a><\/p>\n<p><strong><span style=\"font-size: 14.0pt\">Looking Ahead<\/span><\/strong><\/p>\n<p>Walmart\u2019s supply chain sustainability efforts represent an important step towards reducing global GHG emissions yet many of its sustainable products are met with skepticism from consumers who seek more information and transparency around supplier reporting metrics.<\/p>\n<p><strong>What steps can Walmart take to corroborate supplier\u2019s independent reports of product sustainability? What else might it consider doing in order to improve consumer perceptions around the sustainability of its product offerings?\u00a0<\/strong><\/p>\n<p><strong>How might Walmart incentivize key suppliers which operate in countries with minimal greenhouse gas emissions regulations to commit to emissions reduction targets through Project Gigaton?<\/strong><\/p>\n<p>Word Count: 777<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Sources<\/strong><\/p>\n<p>[1] Andrew Spicer, David Hyatt, &#8220;Walmart\u2019S Emergent Low-Cost Sustainable Product Strategy,\u201d\u00a0<em>California Management Review<\/em>, vol. 59 (2017), pp. 1- 27<\/p>\n<p>[2] TSC 2016 Impact Report, <em>Sustainabilityconsortium.Org<\/em>. <a href=\"https:\/\/www.sustainabilityconsortium.org\/wp-content\/2016-impact-report\/index.php\">https:\/\/www.sustainabilityconsortium.org\/wp-content\/2016-impact-report\/index.php<\/a><\/p>\n<p>[3] Andrew Spicer, David Hyatt, &#8220;Walmart\u2019S Emergent Low-Cost Sustainable Product Strategy,\u201d\u00a0<em>California Management Review<\/em>, vol. 59 (2017), pp. 1- 27<\/p>\n<p>[4] Baier, P., \u201c5 lessons from Walmart on making supplier scorecards work for you,\u201d<em>GreenBiz<\/em> (May 24, 2012), <a href=\"https:\/\/www.greenbiz.com\/blog\/2012\/05\/24\/5-lessons-walmart-making-supplier-scorecards-work-your-business\">https:\/\/www.greenbiz.com\/blog\/2012\/05\/24\/5-lessons-walmart-making-supplier-scorecards-work-your-business<\/a><\/p>\n<p>[5] Baier, P., \u201cWhy Walmart&#8217;s better supplier scorecard is a big deal,\u201d<em>GreenBiz<\/em> (April 19, 2012), <a href=\"https:\/\/www.greenbiz.com\/blog\/2012\/04\/19\/why-walmarts-better-supplier-scorecard-big-deal\">https:\/\/www.greenbiz.com\/blog\/2012\/04\/19\/why-walmarts-better-supplier-scorecard-big-deal<\/a><\/p>\n<p>[6] Andrew Spicer, David Hyatt, &#8220;Walmart\u2019S Emergent Low-Cost Sustainable Product Strategy,\u201d\u00a0<em>California Management Review<\/em>, vol. 59 (2017), pp. 1- 27<\/p>\n<p>[7] Baier, P., \u201c5 lessons from Walmart on making supplier scorecards work for you,\u201d<em>GreenBiz<\/em> (May 24, 2012), <a href=\"https:\/\/www.greenbiz.com\/blog\/2012\/05\/24\/5-lessons-walmart-making-supplier-scorecards-work-your-business\">https:\/\/www.greenbiz.com\/blog\/2012\/05\/24\/5-lessons-walmart-making-supplier-scorecards-work-your-business<\/a><\/p>\n<p>[8] Wal-Mart Stores Inc., \u201cSustainability Leaders,\u201d <a href=\"https:\/\/corporate.walmart.com\/global-responsibility\/environment-sustainability\/sustainability-index-leaders-shop\">https:\/\/corporate.walmart.com\/global-responsibility\/environment-sustainability\/sustainability-index-leaders-shop<\/a>, accessed November 10, 2017<\/p>\n<p>[9] Baier, P., \u201cWhy Walmart&#8217;s better supplier scorecard is a big deal,\u201d<em>GreenBiz<\/em> (April 19, 2012), <a href=\"https:\/\/www.greenbiz.com\/blog\/2012\/04\/19\/why-walmarts-better-supplier-scorecard-big-deal\">https:\/\/www.greenbiz.com\/blog\/2012\/04\/19\/why-walmarts-better-supplier-scorecard-big-deal<\/a><\/p>\n<p>[10] Jira, C. and M.W, Toffel, &#8220;Engaging Supply Chains In Climate Change&#8221; <em>Manufacturing and Service Operations Management, Articles in Advance (2013), pp. 1-19 <\/em><\/p>\n<p>[11] \u201cWalmart\u2019s Project Gigaton,\u201d <em>BioCycle<\/em>, vol. 58 (2017), pp. 6 <a href=\"https:\/\/www.biocycle.net\/2017\/05\/01\/biocycle-world-160\/\">https:\/\/www.biocycle.net\/2017\/05\/01\/biocycle-world-160\/<\/a><\/p>\n<p>[12] Garrett, R., \u201cWal-Mart: Give me a Gigaton,\u201d <em>SDC Executive<\/em> (June 22, 2017) <a href=\"http:\/\/www.sdcexec.com\/article\/12340681\/wal-mart-give-me-a-gigaton\">http:\/\/www.sdcexec.com\/article\/12340681\/wal-mart-give-me-a-gigaton<\/a><\/p>\n<p>[13] Sturken, E., &#8220;Why Walmart\u2019S Project Gigaton Is Corporate America\u2019S \u2018Moonshot,&#8221;\u00a0 <em>Greenbiz<\/em> (April 19, 2017) <a href=\"https:\/\/www.greenbiz.com\/article\/why-walmarts-project-gigaton-corporate-americas-moonshot\">https:\/\/www.greenbiz.com\/article\/why-walmarts-project-gigaton-corporate-americas-moonshot<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>From Stores to Supply Chain: Broadening its Sustainability Efforts Walmart, the world\u2019s largest retailer, has successfully introduced innovative and scalable, low-cost sustainability initiatives across its 11,695 stores. It was among the first retailers to make sustainable products available at little [&hellip;]<\/p>\n","protected":false},"author":9760,"featured_media":23869,"comment_status":"open","ping_status":"closed","template":"","categories":[3629],"class_list":["post-23851","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-climate-change-and-supply-chains","hck-taxonomy-organization-walmart","hck-taxonomy-industry-retail","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Supplier Scorecards: Walmart\u2019s Push for a Cleaner Supply Chain - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/supplier-scorecards-walmarts-push-for-a-cleaner-supply-chain\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Supplier Scorecards: Walmart\u2019s Push for a Cleaner Supply Chain - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"From Stores to Supply Chain: Broadening its Sustainability Efforts Walmart, the world\u2019s largest retailer, has successfully introduced innovative and scalable, low-cost sustainability initiatives across its 11,695 stores. 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