The Wal-Mart Effect, Again

Wal-Mart Stores now plans to measure its 60,000 worldwide suppliers on their ability to develop packaging and conserve natural resources. The initiative, scheduled to begin in 2008, is projected to reduce overall packaging by 5 percent.

In addition to preventing millions of pounds of trash from reaching landfills, this initiative is projected to save 667,000 metric tons of carbon dioxide from entering the atmosphere; 323,800 tons of coal; and 66.7 million gallons of diesel fuel from being burned.

Although it’s a giant step toward polishing its less-than-stellar environmental record, it’s also a good financial move: The world's largest retailer could save $3.4 billion in its own costs. In the five-year plan, Wal-Mart will push its 600,000 global suppliers to find more efficient packaging methods. It estimates total supplier savings of $11 billion.

Wal-Mart seems to increasingly be under the gun these days. Its profit margins are narrowing, and it’s under pressure to provide better benefits for its employees. Regardless of its motivation for implementing this strategy, any step toward reducing pollution is a win for everyone. Wal-Mart’s ultimate goal is to be supplied 100 percent by renewable energy, to create zero waste, and to sell products that sustain resources and the environment.

Matt Kistler, vice president of packaging at Wal-Mart, said that the move should “spur packaging changes in the industry.”

While Kistler didn’t elaborate on how Wal-Mart and its suppliers would make changes, he did point out that the plan wouldn't penalize manufacturers who don't make the targeted reductions. Companies will probably want to participate because they will also benefit, he said.

“When you bring the capabilities of the entire supply chain together, the ability to make a difference really pops,” Scott says. “Here’s a multiplier effect. Instead of just looking at what Wal-Mart can do alone, we have the opportunity to inspire thousands of companies and millions of customers, as well.

“Ninety percent of the impact Wal-Mart can have is on the supply chain,” he adds.

Wal-Mart’s packaging vision began to form last year, when the company partnered with suppliers to improve packaging on its private-label Kid Connection toy line. By simply reducing the packaging on fewer than 300 toys, Wal-Mart saved 3,425 tons of corrugated materials, 1,358 barrels of oil, 5,190 trees, 727 shipping containers and $3.5 million in transportation costs.

Now Wal-Mart is taking what it learned from Kid Connection and applying it to the more than 160,000 products that are seen globally by 176 million customers each week.

It will be interesting to see whether other retailers follow suit.

Another One Bites the Dust

Another independent is gone. Field Container Company, L.P. announced last week that it is combining its business with Altivity Packaging, the former consumer packaging business of Smurfit-Stone that was recently acquired by affiliates of Texas Pacific Group. The new company will be named Altivity Packaging, LLC.

Founded in 1942, Field Container Company, L.P. is the fifth-largest folding carton company in the U.S. and the largest privately held carton converter. Field Container has eight folding carton plants in North America, two paper mills, an ink company with five locations, and a gift box division. Field's total employment is 1,700.

The Paperboard Packaging Council ranked the top 10 U.S. folding carton converters (done before the SSCC Consumer Division sale, therefore the sixth place ranking of Field). See the chart below:

Now that Field Container is gone, that leaves only the bottom three of the top 10 as independents. Will there be any independents left when PPC ranks the companies next year?

 

The Power to Save Summer

Posted by Tom Andel

We’ve entered the season the kid inside us anticipates with joy but the disaster-fatigued business person on the outside dreads. Summer. Meteorologists and Al Gore predict an active hurricane season. We’ve already seen non-hurricane-related flooding in several parts of the country.

However, while developing a story on disaster recovery for Official Board Markets, I came across a company that specializes in risk reduction. The article I developed addressed the aftermath of fires and floods, but Hartford Steam Boiler (HSB) has some additional guidelines to help reduce the risk of equipment damage from power surges and spikes.

“A power surge can come from many sources,” says William Bartley, P.E., a principal electrical engineer for HSB. “The most obvious is lightning, but these high-energy pulses can also come from normal utility switching operations, or when a power line falls to the ground during a windstorm. Surges can come from the outside and inside a building, even from air conditioners, motors and pumps, and other equipment.”

Electrical damage also can be caused by voltage sags or longer lasting brownouts which reduce power levels and cause equipment to work harder. These are electrical transients and can disrupt the quality of power flow necessary for the normal operation of equipment.

HSB offers the following guidelines to help you protect against equipment breakdowns and property damage.

Pull the plug. It’s the best way to avoid surge damage. Once the threat passes or power is restored, plug the equipment back in one piece at a time, starting with units closest to the power source to limit potential damage.

Install surge protection inside and outside your building. Utility power lines are not the only path for voltage surges to enter. Telephone lines, computer lines, modems, faxes — any equipment connected to the outside world can be a source.

Protect critical equipment, in addition to computers, with surge protection devices, including communications lines and networks.

Invest in emergency generators, or consider a rental agreement with a dependable local vendor.

Consider an uninterruptible power supply (UPS). If computer loads or communications systems use the UPS to continue operating through short-term outages, have procedures for an orderly shutdown. Usually, the UPS will provide power for 15 to 60 minutes so you can save and protect data.

Keep written power outage procedures in a central location. Include emergency contacts, such as electrical and repair contractors.

If you have some lessons from summers past to share with fellow converters, please post them to Paperboard Packaging's blog spot. Maybe our collective preventive measures will help keep summer from becoming a bad memory for companies pointed out by the fickle finger of fate.