Attention Wal-Mart Suppliers: Time to Go Green

Some doubt sustainability mandate will hold up

Top-tier suppliers for Wal-Mart Stores Inc. have until Oct. 1 to complete a survey that the company will use to evaluate the manufacturers' sustainability efforts. The plan, which Wal-Mart unveiled July 16, will involve more than 100,000 suppliers globally. The goal is to create a labeling system for customers that will provide transparency into the sustainability of each product.

The survey includes 15 questions that focus on energy and climate, material efficiency, natural resources, and people and community. So what does this mean for suppliers? Manufacturers that don't comply with the mandate risk losing Wal-Mart's business, says Ben Miyares, vice president of industry relations at the Packaging Machinery Manufacturers Institute, and member of a steering committee for Wal-Mart's Sustainability Value Network.

"Wal-Mart is committed to achieving its sustainability goals, and if that means dropping a product because a supplier chooses not to comply with Wal-Mart's sustainability requirements, that is what could happen," Miyares says. "Still, Wal-Mart has said they won't use the scorecard to make bad buying decisions."

Wal-Mart's decision reminds Adrian Gonzalez, director of Logistics Viewpoints at ARC Advisory Group, of the company's well-documented RFID initiative. "I can't help but think of Walmart's plan to revolutionize supply chains with RFID technology several years ago," wrote Gonzalez in his Logistics Viewpoints blog. "It's fair to say that what's been accomplished to date is a mere fraction of what Walmart envisioned several years ago. . . . A big reason for the limited adoption of RFID is that many suppliers resisted it, despite Walmart's threats."

North Carolina State University professor of supply chain management Rob Handfield is another skeptic. "I think it took everyone by surprise that Wal-Mart, of all companies, was pushing green as an initiative," he says. "What didn't surprise me is that A, they were making it a mandate, and B, they were pushing the cost back onto suppliers to comply with it, which I think there was a history behind that with the big RFID push. I'm not sure how they're going to do it, quite frankly."

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