Tesco and 2degrees Scale-up Sustainable Supply Chain Collaboration

Every Little Helps

Tesco is leading the way in using a collaborative approach to address supply chain sustainability, launching the world’s largest supply chain collaboration program on 2degrees through its Tesco Knowledge Hub.

This month, Tesco launched the world’s largest supply chain collaboration program, expanding its Knowledge Hub on 2degrees to its top 1000 suppliers. For those who don’t know, Tesco is the world’s third largest global retailer by revenue, and the second largest by profit. With stores selling everything from baby food and bananas to Band-Aids and buttons, they are an ever-present sight in the UK, along with locations in 14 other countries including its US brand, Fresh & Easy. All of which means a massive supply chain, but also massive opportunity.

Essential, to how Tesco achieves its goal of making its supply chain more sustainable, is the Tesco Knowledge Hub (The Hub) on 2degrees. Simply put, we take our community management methodology--which you see every day in our public working groups--and apply it to a custom program for a client like Tesco through a private portal. 

Building upon last year’s award-winning project, Tesco will, by the end of 2012, have brought most of its top 1000 suppliers into the Hub as part of a massive program of on-line collaboration, importantly supplemented by face to face meetings and site visits. The program is designed to reduce the cost, waste and risk that can be achieved by cutting 30% of the CO2 from the products Tesco sells by 2020.

This is a massively ambitious program. The vast majority of the products that Tesco sells comes from these suppliers and they account for most of the CO2. A program like this takes vision, operational excellence and resources to deliver. It’s hard evidence of Tesco’s commitment to cost and carbon reduction in its supply-chain - contrary to the recent misleading press coverage – and the impact will be enormous over time.

This year’s program stands out for other reasons, most notably for its sharp focus on practical problem-solving around the areas of greatest waste and opportunity. (You can get a feel for the program by reading the activity plan.) However, the characteristic that really marks this program out is not its size or focus, but the fact that it is a genuinely collaborative program. If the behaviors of the first few hundred suppliers to join the Tesco Knowledge Hub hold true, then this year’s new joiners will soon be sharing best practice, exploring challenges and solutions together and learning how to solve problems by accessing their collective ‘know-how’. Last year, over 30% of Tesco Knowledge Hub members took part in problem-solving discussions; 85% participated in Knowledge Hub webinars designed to share best practice between peers; and 72% said they found answers to specific challenges.

We have started to collate the case studies from last year that demonstrate how business cases for carbon reduction and waste projects (e.g. anaerobic digestion) have been developed or accelerated by members of the Hub directly because of what they have learnt from their peers. Or equally important how mistakes have been avoided, or critically important insights gained for maximizing the return from technologies like voltage optimization. There are dozens of both examples and more happening all the time.

That level of collaboration, but this year at scale, within the Tesco supply-chain, will have real impact. And it really is different from anything anybody has done before.

Watch the interview with Helen Fleming, Tesco's Climate Change Director