Sir: There is much talk about collaboration between customers and suppliers but there have been precious few examples.
The Tesco Buying Club pilot involved a group of companies combining their ‘demand’ for LED lights into a single contract (‘Tesco’s ‘scale for good’ slashes energy costs,’ 28 September, p6). Managed by 2degrees and with the help of Tesco’s procurement team and the Carbon Trust, it secured a 30% reduction off the cost of installation.
Across all four participating supplier sites, the energy reduction will be around 1,000,000 kWh per annum, and supplier lighting costs will be reduced by close to 80%. When fully rolled out, Tesco expects over 700 suppliers to participate, particularly as the Club focuses on a range of technologies and solutions, not just LED lights.
Here’s the important bit - information from the suppliers was only presented to the retailers in an aggregated or anonymised form and participating companies were not identified unless they chose to identify themselves in order to benefit from joint publicity.
In the Tesco Buying Club only Typhoo Tea went public. This sort of collaboration within and between organisations is central to transitioning successfully to a sustainable commercial operating model.
Martin Chilcott, founder and CEO of 2degrees