BIOTECH SUPPLY October 8-9, 2012 Crowne Plaza, Foster City, CA Implementing Sustainability Programs: Case Studies from the Field Megan Maltenfort, Sustainability Manager VWR International, LLC

VWR Corporate Overview 5/23/ VWR…  Founded over 150 years ago  One of the largest distributors of lab supplies in the world  8,000 associates in over 25 countries  $4.1 billion in sales (2011) Mission: To enable the advancement of science throughout the world

Common Customer Sustainability Requests 5/23/ Use less packaging when shipping products to reduce waste Sell more environmentally preferable products but don’t charge us more Recycle my products when I’m done with them

Case Study: Customer Tote Programs 5/23/ Scenario Distributor’s Customer…. has internal sustainability program wants to reduce waste, esp. packaging/cardboard Limited space in labs and stock rooms Distributor Pilot Solution Distributor detrashes shipments at the Distribution Center and delivers product to customer in plastic totes (or it could be carts) Source: wh1.com

Case Study: Customer Tote Programs 5/23/ Customers may not see full environmental impact Impacts are not eliminated  only shifted along the supply chain What Distributor’s Customer sees: Reduced waste- packaging & cardboard- less clutter in lab Positive impact to sustainability goals- metrics are favorable Problem Solved- Right? What the Distributor sees: x Increased waste at Distributor’s facilities- packaging & cardboard x Negative impact to Distributor’s sustainability goals xTotes are heavier than cardboard  impacts fuel efficiency during transport x Totes break and need to be repaired and replaced- increased costs/waste x Totes are not returned and need to be replaced xPacking products on totes is not easily integrated into distribution process

Key Challenges 5/23/ How do you give the customer what they want when it does not fit your business model Example- Delivering product in carts to reduce waste at customer sites How do you help customers see sustainability from broader perspectives Balancing customer sustainability initiatives with your own Customers may ask for services that are detrimental to your own program  this forces you to look up the supply chain

Developing Successful Tote Programs 5/23/ Create closed loop program where suppliers are involved DistributorSupplierCustomer  Supplier ships product in tote to avoid disposable packaging from beginning  Customer ships empty totes directly back to supplier  Distributor does not generate waste from detrashing and does not have to store and manage totes  More streamlined, efficient, and implementable solution

Engaging Suppliers to Reduce Waste 5/23/ In a Distributor’s Customer Survey about Waste and Recycling: #1 Complaint was Packaging Waste Solution: Engage upstream partners to fix downstream problems Solution: Engage upstream partners to fix downstream problems Supplier follows their product from Distributor’s receiving in to shipping out Find opportunities to optimize packaging based on handling of product & packaging and pick, pack and ship process Engage associates in sustainability, logistics, supply chain, and engineering on both sides to spark innovation Transparency and collaboration creates stronger partnerships and “stickiness” Opportunity to Collaborate: Bring Supplier to Distributor’s Warehouse Inspired by Toyota- Kaizens and lean thinking (Japanese for "improvement" or "change for the better”)- expand from internal exercise to external with distributors and customers

Common Customer Sustainability Requests 5/23/ Use less packaging when shipping products to reduce waste Sell more environmentally preferable products but don’t charge us more Recycle my products when I’m done with them

Balancing Product Sustainability and Costs 5/23/ Price of “Environmentally Preferable” Product Price of “Average” Product

Low Cost Environmentally Preferable Products (EPPs) 5/23/ Across Industries: Grainger, Office Max, VWR Cost-competitive EPPs Within Our Industry: Centrifuges (recycled content), pipet tips (bio-based), freezers (energy efficient) Across Industries: Grainger, Office Max, VWR Cost-competitive EPPs Within Our Industry: Centrifuges (recycled content), pipet tips (bio-based), freezers (energy efficient) Many companies are creating branded EPPs which are lower cost EPA-defined environmentally preferable attributes Recyclable Recycled content Reusable Energy efficient Water efficient Bio-based Take-back Durable Easily Disassembled Reconditioned

Common Customer Sustainability Requests 5/23/ Use less packaging when shipping products to reduce waste Sell more environmentally preferable products but don’t charge us more Recycle my products when I’m done with them

Product Recycling and Take-Back Solutions 5/23/ Advantages:  Can reduce waste in supply chain and help customers achieve sustainability goals  Can provide customized solutions to customers to create “stickiness”  Can make money by providing these services Pipet tip box recycling Chemical recycling Garment recycling Glove recycling Equipment recycling/take-back

Key Drivers of Sustainability Success 1.Collaboration & transparency with customers and suppliers 2.Sharing of best practices & mistakes Partners are at different stages of the journey- be motivational, patient, and supportive 3.Increasing efficiency and reducing waste is a win for all 4.Look at the big picture & think holistically 5/23/

Thank You! Questions…. 5/23/ Megan Maltenfort Sustainability Manager, VWR International