How can suppliers help create a circular supply chain?

The rise of circular designs is triggering a change in the concept of sustainability. On the other hand, if you were a consumer conscious of environmental problems, you would say that the shift towards circular supply chains by suppliers is indeed serious. Now, rather than merely selling motors or toners for these printers as Hewlett-Packard and others did in the past, they have also designed products which can be used modularly and have a long service life. Reusable and easily reconfigurable, these are promoted through reuse to reduce waste. Today, by integrating with leasing, maintenance and take-back services, their product lifetimes have been extended even further while at the same time creating new revenue streams in secondary markets.

Integrating below practices, suppliers can play a vital role in developing a more sustainable and circular supply chain. ? Responsible consumption mindset. ? Designing products with recyclable materials, easy disassembly, using design for environment philosophy . ? Opting for recycled materials in production processes as appropriate. ? Minimizing waste generation during packaging and using reusable packaging. ? Implementing systems for product return, refurbishment, or recycling at the end of life. ? Providing clear information on product materials, manufacturing processes, and environmental impact. ? Obtaining certifications for sustainable and circular practices.

Design for circularity is redefining the traditional approach to production and consumption. For example, Adidas has been innovating in this field with its Futurecraft.Loop footwear line. This footwear is designed to be fully recyclable. At the end of their life cycle, the shoes can be returned to Adidas, where they are broken down and transformed into new shoes, thus minimizing the need for virgin materials and reducing waste.

Designing for circularity means to have the end of the product in mind. Ensuring that products don’t end up in the landfill if they break or are over-worn and instead can be easily repaired and accessibly recycled. Take-back programs, like those of Patagonia and Levi’s, encourage consumers to give new life to old products and can shift products from landfills to being usable again. Check out more sustainable brands at Beaker’s beta at app.joinbeaker.com!

Suppliers can foster a circular supply chain by designing products and services for circularity, considering their entire lifecycle from sourcing to disposal. Aim for products that can be reused, repaired, refurbished, remanufactured, or recycled, reducing virgin material needs and extending product lifespans. This approach opens new revenue streams from secondary markets. For instance, furniture suppliers could design modular, durable items, easily assembled or customized, and offer services like leasing, maintenance, and take-back.

Creating a circular supply chain demands waste and emissions reduction. Take Patagonia for instance. It is an outdoor clothing brand recognized for its name. They manage waste and air pollution internally as impressively as any. Patagonia is using 64 percent reclaimed materials and aiming to be carbon-neutral by 2025. From optimizing resource use to developing systems for managing waste, they are bringing down their environmental impact in leaps and bounds. These measures are not only compliant with sustainable principles but also represent a path to sizeable savings in cost. Patagonia demonstrates how businesses can be profitable while positively affecting the planet

Minimizing resource use and maximizing efficiency is key to reducing waste in building a circular supply chain. Research has shown that an estimated 10-40% of clothing is unsold and sent to the landfill. By integrating data-driven demand models, manufacturers can attempt to predict consumption and create products at that level instead of a constant cycle of overproduction and underperformance. Also, designing with easy-to-repair components, standardizing materials, and minimizing packaging are other ways to reduce waste in supply chain processes.

In reducing waste and emissions, innovation and efficiency are key. A standout example is Tesla with its production of electric vehicles. In addition to reducing emissions through electric mobility, Tesla also focuses on the efficiency of its manufacturing operations, using solar energy in its factories and recycling battery materials, demonstrating how sustainable operations can be an integral part of a successful business model.

One method that has helped categorize the emissions and identify the exact processes and alternatives to undertake in order to reduce those emissions, is the Scope 1, 2 and 3 emissions. Scope 1 emissions entail the greenhouse gas (GHG) emissions let our directly via the internal processes undertaken by the organization. A factory letting out unfiltered smoke is a stark example. Scope 2 involves the employment of services that indirectly emit GHG into the atmosphere. This includes the electricity supply of the factory, for example. Scope 3 emissions are products that emit GHGs but are associated with the organization only through theur value chain. The purchase of fuel for running the company vehicles is an example of this.

Suppliers play a pivotal role in creating a circular supply chain by actively reducing waste and emissions. Collaboration is key; encourage suppliers to adopt sustainable practices, minimize packaging, and embrace circular design principles. Set clear guidelines for waste reduction, recycling, and emissions control. Foster innovation by supporting suppliers in adopting eco-friendly technologies and materials. Regular assessments and feedback loops ensure continuous improvement. By aligning goals and fostering a shared commitment to sustainability, suppliers become integral partners in achieving a circular and environmentally responsible supply chain.

When it comes to circular economy, information (on the product lifecycle, product quality, product characteristics or materials used) is one of the key success factors. This is why value chain collaboration is crucial: suppliers, sellers, customers, service providers recyclers all need to rely on the data, that is calculated according to common standards and can be shared with relevant parties in a safe way. Existing and emerging industry networks enable this collaboration.

If your suppliers are SMEs, they might not have a capacity for R&D to identify and/or implement circular practices. By creating programs of knowledge and best practice sharing with your suppliers, while providing incentives for adoption of positive practices, you can accelerate the impact and enjoy the benefits earlier.

An assured way to garner consumer and partner interest in such collaborations is the disclosure of the intent of the practice. If it is well-established that the practices being carried out by your firm are to enable a system replicating the circular economic system, it sparks a level of interest among external stakeholders who could be potential collaborators. Provide some information on the circular economic model, explain how your business values align with the model's proposition, and enable the audiences of your engagements to provide their inputs - through comments, emails or phone calls. Start with questions posed towards them, and when you're sure they're interested, provide the answers.

In a circular supply chain, the collaborative business with customers or partners is a basic requirement. A thing which is inspiring, from my point of view, is that businesses are adopting this approach. Last year, IKEA also launched a buy-back service of used furniture; as a form of recycling vital raw materials. Efforts like these are important in reducing the national economy's consumption of resources as well as landfill waste volume and pollution. They now aim for all 27 countries using circular schemes to meet this target within a decade. Not to mention that cooperating in this way creates stronger ties with the customer, making them believe in you.

Consumers wants engaging, simple & convenient ways to behave sustainably & develop sustainable habits. It's the responsibility of big business to deliver convenient ways for them to do so. The way to achieve this is by creating a clear value exchange. Buy-Back solutions offer this value exchange in a simple way that is a natural development of habits that now popularised by secondary marketplaces like ebay & facebook. Buy-back is a circular model that enables brands to claim back ownership of secondary market eco-systems & deliver hassle free solutions for their customers to extend product life-cycles. By commercialising 2nd life cycles of products, a ripple effect back through the supply chain is created, leading to circularity by design.

In the context of supplier innovation for sustainability, it's also important to emphasize the need for scalability. Suppliers should not only innovate but also ensure that their sustainable solutions can be scaled up efficiently to have a broader impact on the entire supply chain and industry. This ensures that the positive environmental and social outcomes are maximized.

Innovating for sustainability goes beyond simply improving existing products; it involves reinventing business models. The technology company Philips, for example, has adopted the 'lighting as a service' model, where instead of selling light fixtures, they offer lighting services. This motivates Philips to create durable and energy-efficient products, aligning their interests with environmental sustainability.

Picture a plastics supplier navigating uncharted waters by delving into biodegradability and compostability. In a paradigm shift, they transcend the limitations of traditional materials, heralding a new era of eco-friendly alternatives. Simultaneously, digital platforms become their ally in the pursuit of transparency and accountability. Employing advanced tools, they seamlessly track and trace each product and material, offering stakeholders unprecedented visibility into the supply chain. Yet, the metamorphosis doesn't stop at technology; it extends into the organization's very fabric. The supplier undertakes a holistic approach, engaging employees and stakeholders.

Large retailers have their technology roadmaps laid out for multiple years ahead of time. They don't leave a lot of room to insert new projects. R&D is expensive and time consuming. The rate of change around sustainability legislation and mood is faster than they anticipated and so they must collaborate with 3rd party innovators to deliver on ESG targets. Buy-Back schemes create more engaging retail experiences and a tighter bond with their customer base, as well as ensuring supply chain resilience considering disruptions in the current climate. Often the simplest solutions are the most effective and buy-backs create a 2-way relationship between customer and supplier which is a much healthier and more collaborative way to drive progress

Suppliers can support a circular supply chain by innovating for sustainability. This involves investing in research and development, embracing new technologies and business models, and cultivating a creative, learning-centric culture. Such innovation helps anticipate and meet evolving market, societal, and environmental needs, generating fresh solutions and opportunities. For instance, a plastics supplier could develop biodegradable or compostable alternatives, utilize digital platforms for product and material traceability, and involve employees and stakeholders in co-creating and testing new ideas.

Suppliers are critical to creating circular supply chains. In fact, it's impossible to do without them! In a circular supply chain, customers become suppliers and suppliers may well become customers, as goods begin to flow in multi-direction. Consider buy-back and sell-back programs, where goods flow backwards "up" the supply chain. Shift your perspective to imagine sourcing finished goods from a user rather than raw materials from a supplier - and imagine what your supply chain might look like!

Apply operational technologies and data systems to measure inflows, outflows, and their characteristics of your plant, organization or system in order to better optimize those streams, and find opportunities to match them to new applications - which could be internal or external! Search for opportunities to leverage existing OT data systems and apply them to circular use cases to lower investment demand and mitigate change management risks.

In building a circular supply chain, consider the broader ecosystem impact. Suppliers should evaluate and enhance their social and environmental responsibility across the supply chain. This includes ensuring ethical sourcing, protecting biodiversity, and upholding human rights. Leveraging technology for better transparency and traceability is vital. Additionally, engaging in policy advocacy and public-private partnerships can drive systemic change. Sharing success stories and challenges can inspire industry-wide shifts towards sustainability. Remember, every step towards circularity, no matter how small, contributes to a more sustainable future.

Simple, hire a circular supplier, right ? Easier said than done. There remains a climate of fear of the unknown, especially among mid level managers who will gravitate towards “that’s the we’ve always done it” vs the emerging circular approach for fear of losing their job ! It is imperative that leadership encourage creative thinking, no, wait affirmative action to combat climate change, because “that’s the way we’ve always done it “ just is not working.

All supply chains are networks - even the most linear ones... And they probably don't begin and end where most people think. This is why achieving respectable SC visibility is not a trivial exercise. Track & trace is worthy and essential, but it's only a small part of the game.