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27 April 2012 | Adam Leach
Falling volumes as a result of the recession allowed delivery company TNT to cut costs and identify opportunities for efficiency savings.
When the financial crisis hit in 2007, express company TNT saw its volumes drop as struggling customers stopped shipping goods and the delivery business needed to quickly cut costs. But what started as a response to a crisis has prompted a more sustainable approach by the company.
Speaking at the Sustainable Purchasing & Supply Summit in London yesterday, Hannelore Scholten, global category manager at TNT, explained in response to the economic crash the company consolidated the number of suppliers of operational consumables, such as parcel packets, down to 13. By the time the consolidation process had finished, the firm had cut costs by 28 per cent on the category.
During the process, the company identified that further standardisation could deliver more savings, so once the consolidation had been completed in 2010, Scholten joined and took on responsibility for standardising packaging across the category.
During the investigation stage of the process, she and her team assessed the packaging satchels in terms of what needs they delivered. Working with stakeholders across six operational centres, the business analysed the functional properties of the packaging in extreme detail - such as why a specific glue was used. And by collaborating with suppliers, the team consolidated the different types of satchels used from 25 to 12, delivering significant efficiency savings.
Reflecting on the importance of effective communication in order to get the right information, she said: “Although it’s sometimes really hard, you need to be really honest, humble, unpretentious and open. And use the information, or if you don’t use it, explain why.”
During the same session, Pierre-Francois Thaler, chief executive of EcoVadis, advised buyers to incentivise suppliers to embrace sustainability in their operations. He identified the practice by Société Générale to assign 10 per cent of the RFP assessment to sustainability.