wal mart buyers sustainability training

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Home Products & Sustainability

February 19, 2008

www.zmarketeers.comwww.zmarketeers.comwww.zmarketeers.comwww.zmarketeers.com

Packaging & Transportation

End of Lifeor New Life

Customer Use of Product

Product Manufacture

Raw Material Harvest

Product Design & Specification

Energy• Minimal energy consumed

• Renewable energy used when possible

Waste

• Minimal water and virgin material consumption

• Durable, reusable, upgradeable, recyclable, biodegradable products

• Minimal negative outputs - air pollution, water pollution, solid waste, toxics

• Maximum positive economic and social impacts on local communities

Products

Questions that

can help you

get on the right

sustainable path

Are our products designed so that throughout their lifecycles they minimize harm and maximize benefit in these dimensions?

• Environmental

• Social

• Human Health

How could the product consume less energy, virgin resources, space?

Is the product designed to be resource-efficient to maintain and operate?

Is the product durable? Does it cause harm at the end of its life?

How does material procurement & processing minimize harm and maximize benefit:

• to our customers

• to communities of production

For example:

• Costs of disposal

• Compliance

• Human Health

• Environment

Are our products made using recycled or other sustainable raw materials?

Are these materials sourced & processed in a sustainable way?

How is every supplier seeking to deliver EDLC / customer value through innovation like:

• Reduced raw material consumption?

• Energy-efficient production?

• Water-efficient production?

• Reduced waste per unit or dollar value?

• Reduced hazardous waste?

• Reuse of “waste” as an input for additional production?

How is every supplier working to improve its packaging?

How is every supplier minimizing the distances goods& parts travel in production & distribution?

Is the distribution system efficient and operating at best practice?

What is your plan to minimize carbon emitted by product transport?

Will using this product consume unnecessary resources?

Will using this product likely harm human health or the environment?

Is the product:

• Easy to repair and upgrade?

• Energy efficient to operate? … to maintain & clean?

• Water efficient to operate? … to maintain & clean?

• Easy to clean + maintain without toxic chemicals?

Will this product educate our customer about sustainability?

What happens to our product when the customer discards it?

What are the costs and impacts to health & environment?

What options exist for reuse, recycling or composting? How could revenue be generated?

What actions is every supplier taking to drive + improve rates of reuse, recycling, or composting?

Questions to Help Generate “Live Better” Innovations

Product Manufacture






SustainabilityIt’s overwhelming!

How can we ever make headway?Home Products

Sustainability

Thought ChangeDon’t discount small changes.

Just a handful of kernels can fill a bowl.

Even small changes can change the world.

We just need a new approach.

Lifecycle Decisions in the New Product Development Process

Deliverables Impacting Sustainability

• Primary & Secondary Market

Research needs to include Sustainability in research topics.

• Consumer-Driven Design Goals

• Market/Competitive Analysis

• Project Risk Assessment

• Resource Requirements/Expenses

• Preliminary Financial Analysis

• Industrial Design (ID) Source

• Early Design Concepts & Models


• Consumer Research & QFD

• Product Specification

• SKU/Feature Matrix

• Technical Feasibility (FMEA)

• Preliminary Bill of Material (BOM)

• Intellectual Property/Legal Review

• Approved ID

• Request for Quote (RFQ)

• Replacement/Obsolescence

• Supplier Selection - Terms Provided

• Preliminary end of life plan


• Solid Models & Drawings

• Functional Prototypes

• Final BOM

• IP Review & patent applications

• Supplier Agreement/Certification

• Final Design FMEAs

• Finalize packaging, POP, Instruction Manual

• Finalize end of life plan


• BOM & Drawings Finalized

• Replacement part strategy

• Limited opportunity to impact end of life plan.

Concept DefinitionDesign

DevelopmentImplementation

Product Manufacture






Advance Development

????

Q. At what point in the New Product Development (NPD) Process are most decisions impacting sustainability made?

Q. At what point in the NPD process are most buyers presented with products?

Q. In general, who (what job functions) within suppliers have the greatest opportunity to improve sustainability-related product impacts?

Q. Which representatives of suppliers do buyers typically interact with?

A. During the Definition and Design Development phases

A. At the end of Development, shortly before Implementation

A. Account Representatives (Sales)

A. Project Leaders – Engineers & Marketing

Concept DefinitionDesign

DevelopmentImplementation

Product Development Process: Key Considerations for Sustainability

Process for Collaboration on Sustainability: Sustainability Strategy Meeting

A collaborative buyer-supplier discussion focused on driving Sustainability into the product

at every stage of the Product Lifecycle

PRODUCT TEAM

� Project Manager/Engineer

� Marketing/Brand Manager

� Design – Industrial, Packaging*

� Quality/Six Sigma*

� Supply Chain*

Gain Sr. MGMT support

Who?

SCHEDULE THOUGHTFULLY

Schedule meeting before CONCEPT

phase of NPD Process and far away

from Line Review and CNY

Sustainability must be instilled in

designers’ minds from the beginning

Be sure to get a clear NPD

Timeline from your Supplier

When?

HELP SUPPLIER PREPARE

�Give supplier preparation packet

Focus on 1-2 specific products or

categories (ask supplier for input

on products for discussion)

�Focus on ONE aspect of Product

Lifecycle (ask supplier to select

lifecycle stage w/ highest impact)

How?

Materials

� Product samples, CAD Views, Components

� Product tear-downs

� Material samples

� Packaging samples

� Printed materials:

� Bill of Materials

� Examples of previous product improvements

�Six Sigma projects, etc.

Ask Supplier to BRING PHYSICAL MATERIALSSUPPLIER

PREPARATION PACKET

� Sustainability background

� Meeting target & agenda

� List of product team

members requested

� List of support materials

supplier should bring

*Optional (Engineering & Marketing req’d)

Challenge

Right People in the Room: Buyers typically interact with Account Managers; Product Teams do not

traditionally have time planned for account meetings.

Intellectual Property:Any discussions surrounding innovation raise concerns about Intellectual Property (IP) ownership. Who

should own ideas generated during collaborative meetings?

Lack of Transparency:Suppliers strapped for margin might be reluctant to openly discuss waste reduction opportunities.

Many suppliers will have perception that they are lagging behind the competition, or that their ideas are not

far enough along.

The Sustainability Strategy Meeting: Common Challenges

Challenge Possible Solutions

Right People in the Room:Buyers typically interact with

Account Managers; Product Teams

do not traditionally have time

planned for account meetings.

Ask Account Managers to loop in their Product Teams. Communicate the

initiative through Supplier Executive Team.

Give the Supplier several meeting date options to coordinate schedules

of NPD Team and send the invitation and planning materials well in

advance of the meeting window.

Possible Solutions – Right People


Intellectual Property:Any discussions surrounding

innovation raise concerns about

Intellectual Property (IP) ownership.

Who should own ideas generated

during collaborative meetings?

1. For a completely open discussion, agree before the meeting to

assign any emerging IP to the supplier.

2. If there is no prior agreement:

(a) Discussions can be limited to the issues of Sustainability

in a product or category, with more specific solutions tabled for the

Product Team’s offline discussions. More in-depth meetings can follow

after the supplier secures provisional patent protection

(b) Supplier can meet with an independent 3rd party

sustainable design expert to discuss issues and potential solutions, and

prepare for a buyer meeting once provisional patents are in place.

3. If the relationship is a collaborative one (e.g. in the case of factory-

direct sourcing) the supplier might be open to a joint ownership option.

Possible Solutions – IP Protection


Lack of Transparency:1. Suppliers strapped for margin

might be reluctant to openly discuss

waste reduction opportunities.

2. Many suppliers will have

perception that they are lagging

behind the competition, or that their

ideas are not far enough along.

1. Discuss other areas impacting Sustainability, such as an End of Life

plan, consumer benefits, or more efficient energy use.

Refer suppliers to third parties for assistance; for example:

� Independent sustainable design firms

� Independent certification bodies

� Wal-Mart’s Supplier Energy Efficiency Program (SEEP)

2. Emphasize in executive communication that early-stage ideas are

welcome and encouraged, and that sustainability is new for everyone.

Possible Solutions – Encouraging Thought-Share

Sustainability Strategy Meeting SimulationConsumer Research comments are hypothetical

Demonstration #1

Acme Bedding

Mattress Pad

Packaging

Demonstration #2

Bistro Brewers

Coffee Maker

2112 cubic

inches:

12” x 16” x 11”

378 cubic

inches:

3” x 14” x 9”

82% reduction in cube!!! ACME

Bedding

50+%reduction in energy use!!!

wal mart buyers sustainability training

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