Wal-Mart speaks on the Packaging Scorecard

Sam’s Club director of packaging Amy Zettlemoyer-Lazar speaks with Packaging World in an exclusive interview on the eve of the official launch of Wal-Mart’s much debated Packaging Scorecard. Discussed are lessons learned over the past year, Wal-Mart’s progress and expectations, and criticisms of the scorecard.

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In November 2006, Sam’s Club director of packaging Amy Zettlemoyer-Lazar and Sam’s Club senior vice president of Marketing, Research & Insights at the time, Matt Kistler, unveiled to the packaging community Wal-Mart’s momentous plan to develop and implement a Packaging Scorecard to help the company reach its goal of a 5% reduction in packaging waste by 2013. On Feb. 1 of this year, the scorecard became official, after one year of trial by Wal-Mart consumer packaged goods (CPG) suppliers and one year of continuous scrutiny and adjustment by the Wal-Mart Packaging Sustainable Value Network (SVN).

For those new to the concept, the scorecard is a web-based database populated by Wal-Mart CPG suppliers with details on the packaging for each of their products. Designed to calculate the net environmental impact of this packaging, the scorecard computes a final score for each package based on the results of nine metrics. The scores ultimately rank the packages against competitive products within each category. Among the metrics considered are greenhouse gas emissions (GHGs), product-to-packaging ratio, cube utilization, and innovation, just to name a few.
Central to the development of the scorecard and its metrics has been Wal-Mart’s Packaging SVN, a group that includes 200 plus representatives from governmental and non-governmental organizations, academia, packaging suppliers, and brand owners.

Wal-Mart’s packaging initiative—which has stimulated an avalanche of activity in the packaging community around sustainability—is just one element of a game-changing strategy by the company focused on three ambitious environmental goals. These goals, first outlined in October 2005 by Wal-Mart CEO Lee Scott in his “Twenty First Century Leadership” speech, are: to be supplied 100% by renewable energy, to create zero waste, and to sell products that sustain resources and the environment.

In anticipation of the scorecard’s official launch, Zettlemoyer-Lazar offered Packaging World an exclusive interview to discuss the status of the project, its reception by CPG suppliers and packaging vendors, and its implications for the industry and the environment.

Since being thrust into the spotlight two-plus years ago, Zettlemoyer-Lazar, who graduated from the Rochester Institute of Technology with a degree in Packaging Science, has earned the respect of many in the packaging community for her responsiveness and professionalism. During the interview, Zettlemoyer-Lazar emphasized the importance of industry members and in particular the trade press in spreading Wal-Mart’s message. “Without you, we are not going to be able to reach our goals,” she said. “We need the help of the entire packaging industry; we can’t do it by ourselves.”

PW: As of March 2007, Wal-Mart reported that 2,268 of its suppliers had logged on to the Packaging Scorecard site, and 117 products had been entered into the system. How have these numbers changed since then?

Zettlemoyer-Lazar: We have actually made significant progress since March. As of the beginning of last week [Dec. 3, 2007], we have had approximately 4,600 distinct vendor members enter information on about 20,000 products into the scorecard.

PW: Is this the response you expected?

Zettlemoyer-Lazar: This is the first time that a scorecard of this magnitude has been developed, so we weren’t exactly sure what to expect. We do believe that we’ve made significant progress since March. We set a goal to have all products entered by Feb. 1, 2008, and this is still our goal. We expect that the number of entries will continue to grow as we move closer to that date. We have been in continual dialog with our suppliers.

PW: Although that is an excellent response, it is very far from the whole of your supplier base [60,000 companies] and their combined products. What approaches are you using to encourage suppliers that have not yet responded to fill out the scorecard by Feb. 1, 2008?

Zettlemoyer-Lazar: We have improved the functionality of the scorecard for entering items, including an auto-populate feature that populates the first several questions that have to do specifically with the supplier and their item. Then we also have a “copy-to” function that allows the supplier to fill in the information for one specific item and copy that information to all other item numbers that have the same type of packaging and same packaging information.

PW: In a recent Wal-Mart sustainability progress report, within the packaging section, it reads: “It is difficult to track progress if suppliers are resistant to using scorecards, so we need to work with them to help them understand how scorecards can add value to their own business.” Have suppliers been resistant to participating in the scorecard?

Zettlemoyer-Lazar: I wouldn’t use the word “resistant.” Our suppliers have been very involved and very inquisitive.

PW: Ultimately, how will the results of the scorecard be used?

Zettlemoyer-Lazar: The scorecard is going to be used by our buyers to help them make better purchasing decisions.

PW: What are the consequences for a supplier that does not participate in the scorecard?

Zettlemoyer-Lazar: If a supplier doesn’t enter their information into the scorecard, the underlying consequence is a lack of information for our buyers when making purchasing decisions. The buyers will only have information on the packages that have been provided to them to be able to reward the suppliers accordingly.

PW: What other factors are Wal-Mart buyers considering besides the score on the scorecard when making their buying decisions?

Zettlemoyer-Lazar: They look at a lot of different things—sales, inventory, margins, damages, in-stocks, and many other things. That’s a short list of what the buyers are looking at to make purchasing decisions. The scorecard is an additional tool in helping them make better decisions.

PW: So the score on the scorecard will be just another consideration?

Zettlemoyer-Lazar: Yes. Our buyers run their departments or categories as a business. How heavily the score on the scorecard will count is going to depend on what the item is, who the customer is, and what the package is. So the buyers have the ability to manage their own business and to use the scorecard as a decision-making tool.

PW: Going back to the statement cited from Wal-Mart’s recent progress report, over the last year, how has Wal-Mart attempted to educate suppliers on how more-sustainable packaging can benefit their own businesses?

Zettlemoyer-Lazar: The first thing that we are trying to do is lead by example. In 2005, just before we announced the launch of our scorecard, our packaging team partnered with select private-label suppliers to improve the packaging on nearly 300 items within the Kid Connection toy line. That group was able to make the packaging a little bit smaller on one line of toys.

The results are that we use 497 fewer shipping containers, we generate freight savings of more than $2.4 million per year, and we estimate that more than 38,000 trees and a thousand barrels of oil are saved. So this change is really good for our business and good for our environment, and we hope that our suppliers will be able to use it as an example of how to reduce the impact of their packaging on the environment while saving money for their company, for our company, and for our customers.

Another way we educate our suppliers is through our Sustainable Packaging Exposition, which we have hosted in Bentonville [AR] since 2006. We have had the expo two years in a row now, and we do have plans to have it again in 2008. The purpose of the expo is to put all of the packaging material and system innovators in touch with our suppliers. We’ve had a lot of material, equipment, and system suppliers trying to share with us their great innovations. We thought that the Sustainable Packaging Exposition would be a great way to put those innovations together with the people who are making the decisions. So our buyers and our suppliers actually walk through the expo together.

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