Can Wal-Mart's Supplier Sustainability Index Translate To The Industrial Segment?

Nearly 10 years ago, Wal-Mart launched a major sustainability program impacting the majority of its stores. While good for the environment and helping to promote sustainablity, Wal-Mart also found these changes lowered the company’s costs. Wal-Mart realized that if its vendors and suppliers could take similar steps, they too might be able to reduce operating costs.

Id 3794 Elev8 4

Nearly 10 years ago, Wal-Mart launched a major sustainability program impacting all of its stores in North America and many around the world. Since then, the company has dramatically reduced its energy and water consumption, curbed greenhouse gas emissions from its trucks, and launched extensive recycling programs dealing with millions of tons of trash. While good for the environment and helping to promote sustainablity, Wal-Mart also found these changes have lowered the company’s operating costs as well.

Wal-Mart realized that if its vendors and suppliers could take similar steps, they too might be able to reduce operating costs — a savings that could then be passed on to Wal-Mart,  help mitigate future prices increases, as well as promote the sustainability goals of the mega-chain. To get this program operating and demonstrate their commitment to sustainability, the company introduced a “supplier sustainability index” about two years ago. The company distributed this index to its thousands of suppliers around the world and asked them to answer some fairly pointed questions about their own sustainability efforts, such as:

  • How could you grow your wheat with less water and fertilizer?
  • How could you remove certain chemicals (deemed potentially harmful or non-renewable) from the products you manufacture?
  • How many of the energy-using products in your facility are Energy Star certified?
  • How much water do you use to manufacture your polyester pants?

When a major buyer like Wal-Mart launches a program such as this, it can have a major impact on how their suppliers do business. Because keeping Wal-Mart’s business invariably proves so valuable, suppliers are willing to take the steps necessary to meet the retailer’s requirements. For some suppliers, this has meant creating an entire sustainability department, evaluating every aspect of how the company does business and manufactures products, and looking for ways to do so more sustainably.

Because much of this is uncharted territory, these suppliers are looking for help and guidance wherever they can find it. And what is proving to be a very good source of information—and one that will likely become even more important in years to come—is the facility maintenance distributors and other distributors these companies work with on a regular basis. This can prove to be a major opportunity for astute distributors in all market sectors who are knowledgeable about sustainability issues and have access to analytical tools that can help their clients meet their sustainability goals.

Case in Point: Using Color to Promote Sustainability

There are scores of ways distributors can help their customers become both Greener and more sustainable. One option is the use of analytical tools and processes that highlight the benefits of certain products over others in regards to sustainability (discussed in greater detail later in this article). However, sometimes pure ingenuity can help as well.

For instance, a moderate-sized office building in the Chicago area had taken several steps to reduce energy consumption. Lighting was replaced with low-wattage bulbs. Except for security lights, all lighting was turned off after 10 pm and on weekends. Similarly, HVAC systems, which used to run all night (albeit at a reduced setting) were shut down entirely at 6 pm each evening and altogether on the weekends. But the facility was looking for even more ways to reduce its energy use.

Most of the major mechanicals in the building (HVAC, water heaters, etc.) were relatively new, so investing in costly new mechanicals was not a cost effective option. However, a plan developed by one of the building’s  facility maintenance distributors proved to reduce energy use and, possibly even more important, encourage building users to get on the “sustainability bandwagon.” This program was a relatively simple color-coding system used on electronic devices throughout the facility.

How does this work?

  • An inconspicuous red dot is placed on electronic devices that tell custodial workers if on, this device should be turned off at the end of the workday. This can apply to a variety of electronics, including copiers, televisions, monitors, and even computers that switch to a “sleep mode” after a certain period of non-use but still consume electricity.
  • Conversely, a green dot placed on items would tell cleaning workers not to turn the unit off.
  • A yellow dot indicates either the times when certain machines can be turned off or, in some cases that workers should check with building or office managers before turning the item off.
  • A blue dot indicates the item should be turned off on weekends only.

In reference to blue dots, one item that is typically “blue dotted” (because of the considerable amounts of energy they waste) are many types of vending machines found in most office and industrial facilities.   Vending machines are typically operated 24 hours a day, seven days a week, whether the machine or that area of the facility is being used or not.  Most of these machines use anywhere from 7 to 14 kilowatts of power per day…amounting to about $300 annually.  Older machines use far more power, making these energy costs even higher.

Unless the items sold in the machine are perishable, vending machines (even those that chill soda drinks) can usually be turned off from Friday evening until Monday morning with little impact on the products or building staff.

Data, Dashboards, and Analytical Tools

In many cases, distributors helping clients become more sustainable must grapple with large amounts of data concerning the scores of products used in commercial and industrial facilities, including which of these items may be greener or are more sustainable. Complicating matters, many purchasers want “on-the-spot” solutions, or at least require distributors to provide answers and address their sustainability issues in a relatively short period of time. This can result in making purchase without reliable information, which can have very significant implications for both the customer and the distributor’s relationship with that customer.

Fortunately, technologies such as analytical tools or computer “dashboard systems” are now available that can help address this problem, providing answers quickly and, in many cases, even addressing issues of which the customer may not even be aware. One example is a Web-based process developed by AFFLINK (a company with member distributors throughout the country serving a variety of market sectors, including industrial facilities).

These systems typically require distributors to inventory all the products they sell to a client (and possibly other products as well); this information then serves as a benchmark for future reference. With this task completed, these technologies can be used to search for comparable products that are, for instance, green certified and/or more sustainable.*

Depending on the system, the capabilities of these tools can run the gamut from simply providing product information and data sheets to comparing products and helping clients make more-informed selections. Distributors using this “”process” as it is often referred to, report that their marketing approach with their clients often changes. Instead of simply selling or suggesting products to the client, they develop what is known as a “consultative selling process,” asking questions and inquiring into client-specific needs. Combining this tool and a consultative sales approach allows distributors to guide their customers in making fact-based decisions and helping them reach their specific sustainability goals.

Fact-Based Decision-Making

Sustainability is complicated. There is considerable misinformation in the marketplace. For instance, some products labeled as “green” decades ago turned out to be not so green after all. Instead of making fact based decisions, purchasers were found themselves often making hope-based decisions. Distributors are advised to take advantage of new technologies that help eliminate confusion, validate client purchases, and support their customers as they get on board the sustainability bandwagon.

Robert Kravitz is a frequent writer for the professional building and cleaning industries.

More in Business Technology