Don’t be afraid to get circular when it comes to sustainability and innovation..
Circular economies and circular supply chains simply mean connecting stronger with our supply chain “partners” which includes our customers, in order to connect sustainable and innovative synergies in the supply chain. Companies working in Circular supply chains tend to think of each other and their customers more as “partners” instead of customers-vendors, and they share common goals for one another’s business growth and our planet. Circular supply chains look to reduce cost, increase efficiencies, and add sustainable value up and down the supply chain.
It’s no secret our Earth’s natural resources are diminishing at an alarming rate. We’ve all heard it. According to the Global Footprint Network’s estimate, human demand on our planet’s ecosystems is projected to exceed what nature can regenerate by about 75 % in just the next 3 years. Considering we only have one Earth, we all need to reinvent how we use its resources and use our own resources before it’s too late. Odds are business owner’s care, employees of the business care, and our customers, the “consumer” cares.
An important distinction I’d like to make clear is this. For us business owners, a circular supply chain and circular economy focus as much on economic sustainability as environmental sustainability. We as business owners shouldn’t pay up for sustainability! Instead we should leverage sustainability to reduce cost, gain efficiencies, and connect stronger with our supply chain partners and customers.
For all us that make, use, or serve customers in the plastics industry, we have every incentive to operate as sustainably as possible and showcase our sustainability to everyone that wants to listen! After all … Plastic is the greatest most useful man made raw material made. Yet it’s also a pollutant in many well documented ways. As business owners and operators, it’s imperative we evaluate the effects that our business operations, practices, and products pose on our society. Recognizing where we can reduce our environmental impact is the entry point for us to join a circular economy.
A circular economy or supply chain is about reinventing how we make our products and how they are used, maintained, and ultimately handled at end-of-use.
We must evaluate factors such as product design, raw material selection, manufacturing process, packaging optimization, and the end product’s reusability and recyclability. It’s about reinventing our business standards to be more efficient, using less to achieve more, while making the world and our business better. To get circular we need to get rid of the “take, make, dispose” mindset and adopt “make, use, return” our plastics industries collective mantra. When we embrace that together in each of our supply chains we create our own circular economies.
Here’s 3 area’s we see making significant improvements for clients that are pursuing circular supply chains.
- Look forward and get disruptive.
Forget about the old models we created yesterday and open our eyes to new improved models for tomorrow! Disruptive and innovative business models can be developed across every manufacturing-retail sector and certainly in the plastics manufacturing space. The emergence of today’s sharing economy propagated by tech-savvy, environmentally conscious millennials and members of Generation Z exemplifies the “product as a service” ethos. In this business model, our physical products, services and software join to create an ongoing experience rather than a one-time transaction-purchase.
For example, ride-sharing companies like Lyft & Uber offer their product (rides) as a sustainable service — drivers use their own cars, and riders use their own mobile devices to call for a ride. Furthermore, matching service such as Lyft Line pair passengers headed in the same direction, turning what would be multiple rides into one — meaning less fuel consumption and reduced carbon emissions.
Subscription-based models are another viable entry point into the circular economy. They often result in economic and environmental benefits for both sides, including cost savings for customers and more sustainable outcomes for companies. One example is HP’s Instant Ink program, which uses the Internet to ensure that print customers have ink when they need it and that they can recycle used cartridges more responsibly. Through the program, an internet-connected printer notifies HP when it is running low on ink. The customer is automatically delivered a replacement cartridge and a postage-paid envelope for returning used cartridges. This strategy connects the company & customer in a joint mission, and saves customers time, hassle and money — up to 50 percent on ink — while being gentler on the planet.
3D printing can help reduce the amount of material needed to make a finished part by realizing complex shapes or redesigning complex assemblies into a single part. These same efficiencies are being created for companies molding and manufacturing products, sharing production capacities, sharing logistics and delivery routes, teaming up to reduce cost and waste.
- Leverage Digitized Supply Chains to make plastic products quicker and more efficient.
In addition to disrupting business models, you can dive into the circular economy by digitizing the way your products are designed, manufactured and distributed. Digitizing supply chains and production helps turn your ideas into finished products in a more efficient, economical and environmentally conscious way, preserving our planet for generations to come. As example in our plastics industry, additive manufacturing is being enhanced by 3D printing. From initial design to supply chain, logistics and distribution, 3D printing technology is transforming our manufacturing industry. 3D Printing also reduces the amount of raw material needed to make a finished part by realizing complex shapes or redesigning complex assemblies into a single part, and because it requires the transmission of digital files instead of the shipping of tangible goods, 3D printing enables manufacturing on demand. This localizes supply chains, reducing the need to transport physical goods on trucks, cutting time and emissions, and allows for short-run production and greater product customization, opening up new ways for a company to connect with individual customers.
Early adopters are already turning these possibilities into reality. Automotive company BMW is using 3D printing to make lighter tools for its assembly line. Nike uses additive manufacturing to make shoe models, reducing waste by 80 percent, and Siemens has employed 3D printing to create industrial gas turbines, reducing greenhouse gas emissions and lessening resources used throughout the production process.
- Separate business growth from business consumption.
It doesn’t always take huge technological innovation to make big impacts. You can start getting circular simply by encouraging consumers to reuse or recycle your goods and by integrating recycling in your own manufacturing and distribution channels. Doing this separates the concept of business growth from consumption — a huge departure from the way many companies operate. As example, outdoor clothing company Patagonia is a pioneer in the sustainability world, from making fleece jackets out of plastic bottles to tracking the paper the used to print catalogs, environmental concern is engrained into everything Patagonia does. The company even launched a program called Worn Wear, which not only encourages customers to repair and reuse their Patagonia garments — it provides them with the tools to do it themselves. Urging customers to repair instead of replace clothing is radical in a world infatuated with fast fashion — and this is an important step in the right direction. Guess what??? Patagonia’s customers know they care and the bond between manufacturer and consumer is incredibly strong and loyal as a result. Another example is The North Face’s “Clothes the Loop” program that allows consumers to drop off worn clothes from any brand at collection bins at The North Face stores. After being sent to recycling centers, the used clothes are then repurposed for reuse to extend their life or recycled into raw materials for use in products such as insulation, carpet padding, stuffing for toys and fibers for new clothing.
These innovative examples of circular economies and supply chains are regenerative by intention, recovering, recycling, reusing materials. It decouples growth from a reliance on increasingly scarce raw materials, benefiting the company, the consumer, and our environment.
When it comes to sustainability and recycling, we urge companies to engage in circular economies and supply chains! There’s never be a perfect time to integrate your company into the circular economy and supply chain — but the right time doesn’t require the perfect time.
It’s now. We all live on Planet A — and until Elon Musk or some other genius gets us on Mars, there is no Planet B. If you feel overwhelmed with the task at hand, remember what’s most important is to take ONE STEP at a time, and develop a commitment to head towards your own circular supply chain. No single company can solve the world’s gargantuan problems alone. The move toward a more circular economy and supply chain is a collective effort and requires intention and collaboration both internally within our organizations and externally with our supply chain and customers.
So how do you get started?
As an individual consumer, be mindful of the companies you purchase from and educated on ways to reuse and recycle are crucial first steps to joining the circular economy.
As a company, ask yourself how you can improve the customer and supply chain partner experience while making everyone part of the change — and how this change will benefit all of you in both the short and long term.
There is significant efforts across plastics industry segments to connect their “eco supply chains” to enhance CSR “Corporate Social Responsibility” initiatives which include green initiatives, sustainability, and efforts to eliminate unethical practices in extended Supply Chains. An emphasis on connecting social responsibility is one of the biggest Supply Chain trends this year, not only in the plastics space, but across many industries, with businesses more than ever focused on reducing their environmental impact. The trend has proven to have positive net impacts in return on assets. So why all these efforts? Who’s really driving CSR?
Here’s why … Collective behavior has tipped towards sustainability and we’re starting to see, in the performance of leading companies, much closer relationships between the companies and their suppliers and customers up and down the value chain. Business leaders today have more of an outside-in focus based on what their end customers require. We talk to many companies and executives and the wide majority confirm, the collective consumer community is pushing companies in the direction of social and environmental responsibility. In terms of recycling and sustainability, plastics industry leaders are listening and connecting their supply chains and choosing supply chain partners that meet their customer’s needs.
With this new trend in the fore front, theirs an aggressive pursuit to connect internal sustainability with external sustainability. Many businesses now focus on end-to-end connected Supply Chains, with better process and coordination between raw material selection, packaging optimization, operational efficiency, all connected to corporate communications and brand strategy that reach and communicate with the consumer.
To maximize sustainable efforts, developing and connecting an Eco Supply Chain becomes critical, and when it functions circularly with stakeholders rowing in the same direction together towards the consumer, efforts not only impact bottom line cost and efficiency, they impact Top Line and brand value. To achieve more impactful economic results, supply chain decisions that in the past were made internally-operationally are now made with the customer in mind as well. Successful companies pursuing CSR including sustainability, focus on collaboration and orchestration, with closer end-to-end integration of the Supply Chain.
Case in point, plastics manufactures interested in recycling their plastic waste historically focused on price per pound to achieve the most value, whereas today many plastics manufacturers think more strategically, connecting the recycling of their plastic scrap into partnerships with humanitarian related products and products that connect their brands to purposeful meaningful causes. Instead of just selling plastic scrap at a price, plastics companies are thinking in terms of “social partnerships” with other manufacturers using their recycled plastics more resourcefully to make new meaningful purposeful products. As result these manufacturers are seeing multiple levels of value creation over and above price per pound selling their scrap, including brand recognition which impacts Top Line and brand value.
That same trend and strategy is impacting the purchasing side of our plastic industry as well, with manufactures looking to purchase recycled plastic resins that are made from strategically sourced materials that add value above price per pound. Adidas and Dell are two great examples, sourcing recycle grade plastic resins made from plastic scrap collected from our oceans. That strategic approach enabled Adidas and Dell to leverage their raw material sourcing efforts in the market to connect strongly with the consumer, thus achieving bottom line, Top Line and brand growth.
I’ve mentioned many times to clients why businesses need to leverage their recycling & sustainability initiatives in the market, as part of their CSR “corporate social responsibility” platform. “Doing good without communicating good may not be good enough”.
There’s mountains of evidence today that “doing good” isn’t just good for our planet & for mankind … it’s also good for business and fast becoming the expected norm by consumers.
When it comes to sustainability and recycling, businesses are increasingly coming to understand the power of communicating their purposeful activities. Unilever and Proctor & Gamble, two of the world’s biggest brand marketers, both recognize that doing good (corporate social responsibility) has a hugely positive impact on brand value & Top Line growth.
The 2013 Cone Communications/Echo global corporate social responsibility (CSR) report showed that:
- 91% of global consumers are likely to switch brands to one that supports a good cause, given similar price and quality.
- 92% of consumers would buy a product with a social and/or environmental benefit if given the opportunity, and more than two-thirds (67%) have done so in the past 12 months.
Global consumers have definitive expectations for the role companies should play in addressing social and environmental issues, and are avidly considering CSR in a variety of decisions:
- Just 6% of consumers believe the singular purpose of business is to make money for shareholders.
- 91% of consumers believe companies must go beyond the minimum standards required by law to operate responsibly.
- More than 8 in 10 consider CSR when deciding where to work (81%), what to buy or where to shop (87%), and which products & services to recommend to others (85%).
Don’t get lulled by just stats! In today’s uber Social Media environment, many companies look to utilize connected supply chains that link their recycling and sustainability practices to their corporate communications strategies, to both maximize their sustainability efforts internally and to leverage and showcase their sustainability in the market with employees, customer, and consumers.
We work with many companies helping them to recycle their plastic waste, or make their products using a % of recycled plastic resins, or optimize and reuse their packaging, and in every case we tell our clients how important it is to connect and promote their sustainability and recycling practices to their customers, employees, and consumers. Doing good is not merely a “nice to do”… it’s an essential component for businesses impacting your bottom line, top line, and brand value.