In Chapter 12 of 16, environmental management and green supply chain expert Andrew Hutson details his approach to help corporations extract maximum value from sustainability and green initiatives. He uses product life cycle assessment to understan...
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Wal-Mart's Eco-Friendly Sustainable Supply Chain Goals Erik Michielsen: When you worked with the corporation to help it become more environmentally sustainable. What’s your approach to understanding the impact areas that will maximize that capability? Andrew Hutson: Well, first you have buy in from the company before you do anything and that comes from a sense of in a mutual value creation. And you have to be upfront about what it is that you want to accomplish out of any sort of partnership. You have to make sure that those terms are very clear. Because you can’t have a different or set of expectations or both parties are going to be unhappy. So when I come in or my colleagues come in to work with the company, once we establish that, we then determine where this company has its largest impacts. And there are some very structured analytical methods for doing that, things like life cycle assessment where you can look at the entire life cycle of a product from raw material, acquisition and extraction to manufacturer to transport to you know, it’s time on the shelves to, you know what happens when it’s in a consumer’s hands. Whether its energy use or some other impact to what then happens at the end of the product’s life, does it get recycled and turned in to other products? Does it end up in a landfill somewhere? Does it get incinerated? And you look of what the opportunities are with a particular company. What you really want to do is go after what the core strength of the company is in order to get maximum benefits. So if you weren’t working with the bank, even thought it does a lot of paper procurement that may not be the best area to go after. I mean, yeah you can reduce their paper but is that really the best way for a bank to increase its leverage. Maybe they need to start thinking about green lending program or investing small businesses that make the right energy efficient choices or using the thing that they do best in order to maximize the best good. So you really want to find out what a company does in word that maximum opportunity. So the result is two pieces of it, one is finding where the impacts are and then finding, how is that company uniquely place to do something that is really good for the environment and uniquely place to do a lot of good for that company? If company like Wal-Mart with their size and scale makes a change or requires a change in a products that it sells and it shelves, you’re essentially changing the entire industry because a company that rituals or it changes its product to sell at Wal-Mart isn’t going to exclusively sell that product to Wal-Mart unless it’s a sort of an agreement that they have. It’s going to change how it sells it to target, to safe way, to Kroger to everybody else that’s in the retail sector. When you’re working with a company like Wal-Mart and you think about their supply chain and it’s the product supply chains that it’s been own internal operations supply chain. Some studies that have been done that the company commission to that have said that 90% of the impact that Wal-Mart has influenced over do not occur in Wal-Mart’s own operations, so if Wal-Mart can make the store super efficient, it can make it — super efficient attracts, but 90% of those impacts are still going to be done in some manufacturing facilities somewhere by a company outside the boundaries of the firm. But Wal-Mart has uniquely placed to influence that and that’s where the really exciting stuff happens and how does company then influence another company to change behaviors and make that case that it makes good business sense for both parties.

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