A question of collaboration

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Want to make savings, improve supplier relations and enhance your green credentials in one fell swoop – and at no cost to your business? Charlotte Dennis-Jones finds out about a Government-funded scheme that helps retailers do just that

A number of high street retailers, including Boots, Home Retail Group, Body Shop and WHSmith, have called on the expertise of Envirowise, a Government-sponsored programme that helps retailers work with their key suppliers to improve business efficiency. The scheme, which claims to “minimise waste and maximise profit”, offers advice about and solutions to environmental challenges, such as recycling and making packaging design more eco-friendly.

The idea of getting retailers and their suppliers together in one room to engage in anything other than negotiations can be challenging, but Home Retail corporate responsibility manager Laurence Singer says it is worth the effort. “It helps us to have a partnership with our suppliers. In future, working together should benefit both parties and help us to be competitive. That has a knock-on effect right through the supply chain to the customer,” he says.

Envirowise programme delivery leader Roger Papworth says that, while some of the retailers had initial concerns about being seen to preach to their suppliers, Envirowise ensures the emphasis is placed on working together.

Getting retailers and suppliers around the table to discuss environmental supply chain solutions is one thing, but the opportunity to bring about tangible improvements is the ultimate factor in deciding whether the programme is worthwhile. Envirowise claims its programme has enabled the retailers and suppliers it has worked with to identify savings of more than£12.5 million. It also believes that, by putting in place simple low- or no-cost measures, the retail sector could reduce waste costs by up to 1 per cent of its turnover.

When it comes to reducing waste, emphasis is placed on prevention, reduction, re-use and recycling (see box). This includes greater efficiency in the use of raw materials, such as investing in new equipment to optimise cutting, and better cleaning of equipment to reduce water use and energy consumption. Most innovations require capital investment of less than£2,000, or none at all, and the average payback period is just five months. Papworth says: “It’s all about finding simple solutions. Being greener really doesn’t require major investment.”

Home Retail took part in the programme with 30 of its suppliers last year. It was particularly keen to get involved because it wanted to give them a third-party perspective on how they could work together. “There had been improvements to packaging, but none as wide-ranging as this and no previous discussions about energy or waste reduction, for example,” says Singer. Steps taken included the removal of polymer products during the manufacturing process for re-use and better segregation of card to maximise recycling opportunities. And the result? Its suppliers made cost savings of about£250,000 last year.

Boots was one of the first retailers to sign to the programme in its pilot form in 2002 and, having found it successful, continued to mentor 11 new suppliers in 2003. In its second year, savings of almost£350,000 were identified, which Boots says helped it manage its goal of running a sustainable business.

WHSmith embarked on the programme in 2003. One of its suppliers, John Dickinson Stationery in Cambridge, standardised its raw materials, reduced its packaging and switched to using larger pallets. The immediate changes brought about savings of£57,000 a year. WHSmith retail business sales manager Graeme Hargreaves says: “The forum significantly changed the way we look at our product development and forced us to question almost everything we do with regard to product make-up. If an action doesn’t add value to our customer, we no longer undertake it.”

Because the programme focuses more on suppliers than the retailer, Papworth says Envirowise is often asked what’s in it for the host company. “The benefits to the retailer are enormous. If just one of its suppliers improves its packaging, there is less to move around and get rid of, for instance,” he explains. Furthermore, he adds, if there is ever a controversial environmental issue in a supply chain that is picked up on in the media, it is often the retailer that will become embroiled in the negative PR. Most importantly, meeting to discuss joint initiatives can bring about improvements at a far quicker pace.

While retailers are doing much to make their supply chains more environmentally friendly, this can only be realised if they work in partnership with suppliers. As Singer says: “We need to learn from one another.”

Supplier & retailer eco-initiatives

Prevention