In a highly resource-constrained world, there’s little room for waste! For all us in the plastics manufacturing space whether we make, use, or sell plastic products, getting creative with the way we obtain, use, and dispose of plastic materials will be KEY for a long term healthy and sustainable plastics industry.
We all understand that unless we change what we do and how we do it, we cannot expect different or improved results. Business and sustainability experts globally are making the shift to “go circular,” implementing smarter processes for sustainable inputs, improved product design, more efficient delivery methods, and close loop initiatives for materials in manufacturing and after use. For us in the plastics world… This is the basis of our circular economy and it’s one of the biggest growth opportunities for plastics businesses and brands!
The circular economy itself is a $4.5 trillion opportunity, according to Accenture. Who in our plastics industry wouldn’t want to get circular? For companies making, using, distributing, and selling plastic products, it is important for us to understand the distinction between a linear supply chain versus a circular supply chain, and how that can improve our businesses and environment.
Today’s status quo in our plastics industry is linear. We use inputs to make our plastic products, our plastic products get used, and then we dispose of our plastic waste. This linear model poses serious long term risks for each of our businesses and our whole industry! Aside from the obvious procurement issues associated with diminishing and costly resources and growing demand for sustainability, plastics companies should consider the wider financial, reputational and regulatory concerns too.
Here’s a liner risk/waste example: We make polyester plastic water bottles and polyethylene plastic grocery bags for consumers to use, the plastic products get used and discarded by consumers, some of which wind up in the ocean. As we all know, plastic marine debris has been news worthy for some time and is a real serious problem for plastics companies who care about their brands. Branded trash is literally crowding our oceans. Every year, 800 million tons of plastics leak into our oceans, equivalent to one full garbage truck every single minute! Assuming this trend continues, we’ll have more plastic in our oceans than fish by weight in 2050. Bad news for companies that care about their reputations because much of this plastic trash is easily traced back to its origin company through brands and logos.
In tomorrow’s status quo, our plastics industry will operate circularly. We make and package our products using more sustainable materials and processes and design them in advance for reuse and/or recycle at end of use, we create recycle/reuse collaborations upfront with other industry providers and manufacturers, and we connect stronger with our customer / consumer so they understand how/why to reuse/recycle our products and packaging once they are used, and we collect our plastic scrap to use as new raw materials to make new products or be used in new reuse applications. This circular model creates long term collaborative shared opportunities for our businesses and our whole industry! By connecting circularly, we share and use less raw material resources and harness the economic value intrinsic in plastic materials, we connect closer with our customers through shared sustainability, operate proactively in terms of regulatory mandates, and open new doors of innovation for our businesses.
Here’s a circular opportunity / sustainability example: We make polyester plastic water bottles and polyethylene plastic grocery bags for consumers to use, recycle and reuse programs have been developed in advance circularly / collaboratively by supply chain partners including plastic resin producers and resin distributors, product manufacturers, packaging manufacturers, recyclable material collectors and recycling companies, and manufacturers that make new products using recycled plastic as their raw materials. The plastic products get used and more conveniently collected for recycle / reuse from consumers who have been taught / incentivized to participate in the circular economy. More of the Branded recyclable plastic bags and plastic bottles are collected through the supply chain while less is discarded, recycled back into more sustainable plastic resins, and used by collaborating supply chain partners to make new plastic products like automotive parts, consumer electronics packaging, footwear, or reused clothing for those in need around the world. Through circularity, more recycling / reuse programs develop, consumer education, participation, and pride increases, participating brands engage stronger with consumers and their brands gain value, less plastic waste gets discarded as trash, and plastic resources are used more efficiently and sustainably.
An effective circular supply chain needs to focus on both internal and external sustainability.
A circular economy and supply chain will enable us to operate our businesses more efficiently and sustainably by connecting our supply chain and collaborating closer with our supply chain partners on shared goals. To get circular, we need to recognize differences between internal sustainability in our operations and external sustainability in the market, because both are essential to a circular economy.
Internal sustainability is the implementation of sustainable manufacturing and operational initiatives, how we make and deliver products, better waste management and recycling / reuse practices, etc. Circular supply chains will help connect new value, more value, and more effective ways to gain value. As examples, major brands can become huge purchasing organizations to buy scrap plastic waste which can be recycled and used back by them in countless new products and packaging. Manufacturers making plastic products can develop more efficient ways to buy recycle grade plastic resins created from specific and strategic sources like ocean plastics, adding strategic & brand value beyond price per pound.
External sustainability is implementing sustainable connections between industry and the consumer marketplace. Plastics companies need to look externally to implement initiatives that educate and collaborate, to connect stronger with consumers for a shared purposeful cause. We need to leverage our sustainability in the market to enhance sustainability and to create stronger more sustainable valuable brands for our businesses. External sustainability includes finding ways to logistically collect plastic waste that’s already (or) will eventually be “out there”, at end of use, partnering with retailers as example, to implement more resourceful ways to promote and sell sustainable plastic products and provide consumers with more efficient recycling drop off collection programs at their retail locations that give incentive and educate consumers as part of a circular supply chain. We see many companies finding new and creative uses, including using plastic waste as raw materials to make humanitarian products. We need to connect stronger with consumers so they understand how / why they should participate in a circular economy and circular supply chain. Remember, one man’s plastic waste literally becomes another’s plastic raw material.
Circular supply chains and circular economies sound big and confusing? How can businesses start getting circular???
It’s understandable why business owners and managers may have concern to jump in to a circular supply chain ocean. So instead of jumping, let’s dip a toe in the water and let circularity evolve over time? Understanding how effective circular strategies can benefit our business and industry up and down the supply chain is the key to implementing circular supply chains on a mainstream basis. Circularity doesn’t just benefit manufacturers making plastic products, it benefits everyone up and down the supply chain including plastic resin manufacturers, resin distributors, compounders, plastic recyclers, logistics providers, distribution and retail, and most certainly, consumers and our environment.
These are a two steps I suggest to our clients for them to take in order to begin the process of getting circular.
1st establish a soft sustainability plan (you can add to it down the road) that outlines your goals and time lines to grow circularly. Plans need to include how we make, package, deliver, sell our plastic products more sustainably, and how we communicate (education) our sustainability and end-of-product use (recycling and reuse) resources to our customers and consumers.
2nd is to begin connecting your sustainability goals with your supply chain partners and their goals, to form solutions together. That connection (connect the dots…) and teamwork within your supply chain is the KEY to Success and will lead to even more innovation and efficiency! For us in the plastics world, our supply chain include our plastic resin suppliers, packaging suppliers, mold and tooling suppliers, recycling vendors and/or sustainability vendors, logistics providers, sales, distribution, and marketing communications vendors that connect sustainability more broadly with consumers. Many businesses involved in circular supply chains and circular economies utilize the services of a Supply Chain Advisor to assist in connecting eco supply chains, to ensure everyone is rowing in the same direction and providing feedback and resources towards a shared sustainability goal.
Some questions we should consider:
- What % of recycle plastic resin can we effectively use in making our plastic products? How can we get access to high quality consistent recycle grade plastic resins?
- How can we design our plastic products so they can be recycled/reused more effectively at their end of use in a circular economy?
- How can we develop a zero plastic waste program for plastic scrap we generate in our own factories, offices, and distribution processes and how can we use these valuable plastic scrap materials ourselves or sell them to other manufacturers in our circular economy to maximize value?
- How can we ourselves use recycled plastic or recycled fiber in our own packaging? How can we optimize our packaging to use less raw material and get more product on our trucks and shelfs to reduce shipping cost and carbon footprint? How can we help our customer to recycle our used packaging?
- Are we operating our facility at 100% capacity and if not, how can we use (share) our production capacity to produce products for other businesses?
- How can we effectively communicate our sustainability (and educate consumers to reuse/recycle) our products and packaging, and to promote a circular economy?
- How can we help our customers to recycle or reuse our plastic products once they reach end of use in the markets, to avoid disposal?
How do we track and measure our sustainability and economic advantages in a circular economy and supply chain?
Many people react skeptically to circular economy / supply chain model because they see obstacles that can prohibit circularity, including economics and consumer participation. That said, I know many business leaders in our plastics industry who are incredibly innovative business managers and great capitalists, and we should be the ones to tackle this opportunity to close our own loop on plastics, not environmentalist! We cannot sit on our hands and stay comfortable. We should be the ones to try new strategies and develop shared measurement.
Plastics has economic value when we purchase resin and it has economic value when we buy & sell plastic as scrap. We all recognize there’s economic value to be harnessed, and we should be the ones to hold onto this value throughout the supply chain instead of dumping it in our oceans.
We all care about our environment and understand the importance of sustainability, especially when we think about our kids and about our future generations. As business manager’s we also have bottom line and top line economic goals to meet, otherwise we may not be in business to worry about sustainability. The logical longer term question for business owners and managers in our plastics industry is … how can we tell if we are implementing circular supply chain and economy principles successfully to yield both improved sustainability / profitability results?
Long term answer. For circularity to go mainstream in our plastics industry it will require open collaboration from our supply chains on metrics and measurements we all can use together to gauge effectiveness. Understanding and communicating the economic, social and environmental benefits of going circular will go a long way in helping businesses integrate circular principles across their supply chains. There’s a lot of work to be done on this, but I believe plastics companies that take leadership roles now will lead and gain competitive advantages.