Supply chain pressure bites as B&Q drops poor performers

Three years after launching a programme to assess the environmental credentials of its suppliers, DIY retail chain B&Q is to stop doing business with those which have failed to make the grade. The company is now planning to shift its focus to product-specific improvements - including the establishment of minimum environmental standards.

B&Q became one of the pioneers in greening the supply chain when it launched a scheme to assess its suppliers in December 1991 (ENDS Report 203, pp 12-15). It challenged them to introduce an effective environmental policy and management programme - or face the threat of being delisted.

Since then, 450 firms have completed questionnaires and been rated by B&Q on a scale A-F, depending on their environmental actions and understanding of the issues (ENDS Report 221, pp 18-20 ). The F grade applied to companies which failed to complete a questionnaire - and four firms which did not meet this basic requirement were delisted in July.

All suppliers with a D or E rating were threatened with delisting by 30 November unless they improved their environmental management standards to grade C or above. Among them were some companies with environmental policies which B&Q regarded as not meaningful or failing to demonstrate a real commitment or understanding of the issues. B&Q expected suppliers to say a lot more than "I care about the environment", according to Dr Alan Knight, the group's Environmental Policy Controller.

Most of the 450 suppliers have taken heed of the threat. In February this year, only 34% had achieved grade C and above. But by early December, the figure was up to 94% and only 29 businesses had not made the grade.

The wayward suppliers range from the very small to the quite large, and, says Dr Knight, include the producer of one famous DIY brand. Eight gave valid reasons for missing the deadline and an extension has been granted. Some of the remainder are important to B&Q's buyers and will be given a final chance to meet the grade. In all, Dr Knight expects about ten to be delisted.

Dr Knight is satisfied with the outcome of the programme, pointing out that three years ago "90% of B&Q's suppliers hadn't even considered the environment as an issue...It demonstrates that targets do work, especially if they are public targets," he says. "The date focuses everyone's minds."

So far, B&Q's environmental programme has been corporate-based. The next two-year phase will focus more on products, and will include the drawing up of minimum environmental standards to help buyers and suppliers.

Generic items such as packaging and timber will be tackled first, but other product categories, such as charcoal, garden furniture and wall coverings, should follow. The programme will involve environmental reviews of all suppliers in each product category. During this phase, B&Q's environmental team will check that suppliers are acting on their policies.

B&Q also plans to give its environmental programme a boost by integrating it with its quality assurance function. Dr Knight, who will head the combined section, believes that "the strength until now has been the luxury of focusing on environmental issues. Now we need to integrate to make it really work properly." Separation of the functions, he said, was increasingly becoming a major weakness.

Dr Knight argues that integration will reduce bureaucracy for suppliers, improve access to information for B&Q's environmental team, and avoid conflicting demands on suppliers from two separate departments. Above all, he says, "it makes the environment mainstream."

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