BLOCK SUSTAINABLE RAW MATERIAL PURCHASING CAN LEVERAGE-DOWN PRICING & SECURE FEED STOCK THROUGHOUT YOUR SUPPLY CHAINby gearedforgreen December 1, 2018
Big Brands and Big Retailers can do more to lead their Circular Supply Chains & enhance Circular Economies by leveraging their “Buying Power” to Purchase Large Blocks of sustainable recycled plastic raw materials. We call it “Block Sustainable Raw Material Purchasing”.
What is Block Sustainable Purchasing?
Creating a strong circular economy starts from the Top Down. That’s because the Top represents the Demand.
Big Brands & Big Retail already consume billions of pounds of virgin plastic resins, in the form of plastic products & plastic packaging they make and sell, much of which is virgin polyethylene, polypropylene, polystyrene, and polyester plastics.
Today the purchasing of these billions of pounds of virgin plastic resin is fragmented across many different manufacturers across the supply chain, who aren’t buying in big enough blocks to leverage-down pricing, (or) secure long term sustainable feedstock, (or) gain efficiencies.
However in a Connected Collaborative Transparent Circular Economy we change that dynamic!
As many of us are aware, the circular economy encompasses many levels of the supply chain, from product and packaging design, sustainable raw material selection, recycling and waste management, technology, equipment, operations, brand communication, awareness, education, social purpose, and most importantly & essentially … strong consumer demand for the products we make. It is the Demand that Drives the Circular Economy.
For those involved in circular economy sustainability, they recognize it’s as much about doing good for people and planet 🌏 as it is about connecting processes, resources, technology, and information to reduce cost, improve revenue, and grow stronger more “valuable” brands.
Big Brands like Proctor and Gamble, Unilever, Nike, etc. and Big Retail like Walmart, Kroger, Walgreens, etc. recognize that circular supply chain & circular economies equally impact economic and environmental performance, and those Big companies gain competitive market & economic advantages as result. It’s why BB & BR are spending “B” Billions on sustainability.
THE GREAT SUSTAINABLE DIVIDE
Big Brands and Big Retail at the Top of the supply chain have deep wells of financial & people resources to invest heavily in circular supply chain sustainability. Our GearedforGreen team is actively involved helping support many of these BB – BR circular economy initiatives in multiple areas throughout their supply chains, so we see this GREAT DIVIDE with firsthand knowledge. Big Brands and Big Retail have Big Advantages.
On the other side of the Great Divide resides the bottom-up Supply Chain, where the rubber meets the green road! That’s where the bulk of the manufacturers live. That’s where all the great innovative mom and pop supply chain and services providers live. And that’s where tough decisions are made every day, between (1) paying up to add sustainability expertise or playing it conservative ensuring you make payroll, (2) investing in sustainable technology or preserving cash for tomorrow, (3) using sustainable recycled ♻ plastic raw materials or keeping it simple using prime grade virgin plastic resins.
Here is Why Block Sustainable Purchasing Benefits “Everyone” in the supply chain
Unlike the Big Guys, the bottom up Supply Chain juggles these challenges that impact Investment, Risk, Credit, Leverage, etc., all of which must be managed skillfully to survive. More challenges + more risk = less sustainability.
By participating in Block Sustainable Raw Material Purchases, BB & BR help smooth out the sustainable raw material landscape from bottom up, making it easier and more cost effective to widely access sustainable plastic raw materials. That access to leveraged pricing and supply efficiency has widely positive effects on the entire supply chain, creating advantages up & down.
Here’s (3) Key Benefits to everyone in the supply chain
as a result of Block Raw Material Sustainable Purchasing
1. Leveraging purchasing power shares cost savings top to bottom for manufacturers.
2. De-Risking raw material suppliers makes it easier for them to invest in improvements.
3. Connecting the supply chain top to bottom creates collaboration & innovation which strengthens the entire supply chain together and shares value.
Here’s (3) Key Strategies to make Block Sustainable
Raw Material Purchasing Successful
- Locking in large volume annual commitments via block purchases can be accomplished without locking in price or even paying for materials until deliveries are complete.
- Buying large volume annual blocks of sustainable raw material can be done without establishing specific raw material grades or material specifications.
- Implementing Block Supply Finance Arrangements between BB/BR, participating Supply Chain Manufacturers, and Raw Material Suppliers enables the entire supply chain to share savings.
To learn more about GearedforGreen Block Sustainable Raw Material Purchasing for your Company or your Supply Chain, contact GearedforGreen – Daniel Schrager, President, GearedforGreen 888-398 (GEAR) 4327 firstname.lastname@example.org, www.gearedforgreen.com