Save Money. Live Better…and Greener

           The largest retailer in the world, Walmart, has a track record that displays their commitment to sustainability.  It is now aiming to improve this track record and in doing so may be the catalyst that the industry needs to shift towards sustainability as a whole.

As we all know, one of Walmart’s strengths is their supply chain management.  The multinational corporation has 100,000 suppliers and it has enough clout in the industry to pressure them into following their directives and initiatives.  This has been evident and will now be put to the test.  Walmart is beginning to include sustainability in its merchants’ performance reviews, which will be used to determine pay raises and potential promotions.

When put into perspective, these merchants are responsible for multibillion dollar buying decisions and are responsible for what stores have on their shelves.  Therefore, the inclusion of sustainability scores in performance reviews will undoubtedly shift some of the emphasis on price to sustainability when making buying decisions.

An example of this concerns the laptops that are carried at Walmart stores.  An estimated 30% of laptops sold at Walmart have advanced energy saving settings.  Walmart does not find this adequate.  Therefore the company’s laptop buyer set a goal to increase the percentage of laptops sold with advanced power settings from 30% to 100%.  Company research indicates this shift alone will reduce CO2 emissions by hundreds of thousands of metric tons and save the consumers money on electric bills.

Because Walmart’s buyers are now going to put a greater emphasis on sustainability, it will behoove the suppliers, in order to retain Walmart’s business, to do the same. The suppliers in order to meet the stricter criteria must find new methods to reduce waste in their own operations.  This will encourage leaner competition both among competing suppliers and the buyers of other companies as well.

Walmart’s Sustainability director, Jeff Rice, believes that although sustainability will not be all that is looked at when evaluating merchants, it will have enough weight to effect behavior.

It will be interesting to see the effects of this initiative not only on the company but the industry as a whole.  When the industry leader makes a dramatic change in operations it will most likely be emulated by the other players in the industry in order to keep up and compete.

I believe that Walmart must be commended for its efforts.  This is because sustainability is not always the most profitable route to take in the short run.  At times it may not even be economically feasible.  However, taking Walmart’s success in managing its supply chain into consideration, I believe that Walmart will be able to reduce waste and make its supply chain “greener.”

Any thoughts on this? Do you believe that this initiative is risky? If so, is it worth the risk?

India’s growth held hostage by lack of leadership and management

In a summer study abroad trip to India I saw firsthand the result of poor management on a national scale.  As part of the course I was required to write an exhaustive essay that required in-depth research.  The paper focused on the state of infrastructure in India

The infrastructure found in a country is the backbone of the economy.  The level of development of the infrastructure determines how advanced an economy a country or region can have. It is no secret that India’s infrastructure is in a state that may derail its economic growth and keep it from reaching the upper echelon of global powers.

There are several reasons for the poor conditions of India’s infrastructure.  One of these reasons is poor management.  It must be said that India has shown the capacity to swiftly develop the infrastructure necessary to sustain its growth.  However, it seems as though that development has stalled.

The development of the electrical grid infrastructure has stalled due in part to the lack of urgency of those in power.  Throughout the country there are regional grids that have fallen into disrepair with no plans to fix them.  The country’s politicians use electrical power as a bargaining chip or as political capital when seeking election or reelection.  Electrical power is given to certain constituencies at discounted rates in exchange for votes.  There have been attempts at revamping the infrastructure but the plans are filed away because of a lack of consensus.

The poor state of the infrastructure is adversely affecting the country’s economy, yet the politicians see no reason to develop an efficient way of building up the infrastructure.  Throughout the country there are projects that are left only partially completed.  They are left unfinished due to a lack of cash flow or because the projects have gone over budget and additional funding cannot be secured.  There are projects that are undertaken in rural India with the stipulation that only the most basic tools are used.  The idea behind this is that more laborers will be required, thus creating more jobs.  Although well intentioned, projects like these cause more harm than good.  Instead of having a project take 5 years to complete by restricting the use of machinery and having the workers sit idly around, the country would be better served by having one project completed quickly and another one started and so on.  One such government initiative, The Mahatma Gandhi National Rural Employment Guarantee Scheme, is drowning in corruption.  Because of this less than half of the projects begun in 2006 have been completed.  These inefficiencies are holding the development of the infrastructure hostage.

There needs to be a serious effort to streamline the processes necessary.  Apart from that there also need to be a real sense of urgency and organization from those in power.

Once leadership does what it is supposed to do, lead, then the infrastructure may finally reach the level of development necessary to allow India to become the superpower that it has the potential to become.  It is disturbing that the ineptitude of a few and the self-interest of some have served to stymie the development of something so critical to a nation’s economic growth and ability to raise its people out of poverty. Any thoughts?