September 25, 2006

Wal-Mart Packaging Reduction Plan Could Save $11 Billion

Wal-Mart plans to measure its 60,000 worldwide suppliers on their ability to develop packaging and conserve natural resources. Wal-Mart expects the project to reduce overall packaging by five percent and save 667,000 metric tons of carbon dioxide from entering the atmosphere.

That’s equal to taking 213,000 trucks off the road annually, and saving 323,800 tons of coal and 66.7 million gallons of diesel fuel from being burned, according to Wal-Mart. The move could create $10.98 billion in savings, just from a 5 percent reduction in 10 percent of the global packaging industry. Wal-Mart alone could save $3.4 billion.

Next month, Wal-Mart will introduce a packaging scorecard to more than 2,000 private label suppliers. This is a tool that will allow Wal-Mart buyers to have all the information about packaging alternatives.

In February, 2007, tools and processes will be made available to all of the company’s global suppliers. For 12 months, these suppliers will learn and share results within this process. And beginning in 2008, Wal-Mart will measure and recognize the entire worldwide supply base for using less packaging, utilizing more effective materials in packaging, and sourcing these materials more efficiently through a packaging scorecard.

Last year, Wal-Mart partnered with suppliers to improve packaging on its private label Kid Connection toy line last year. By reducing the packaging on fewer than 300 toys, Wal-Mart saved 3,425 tons of corrugated materials, 1,358 barrels of oil, 5,190 trees, 727 shipping containers and $3.5 million in transportation costs, in just one year. Now Wal-Mart apply those lessons to more than 160,000 products.

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