This will navigate you to Accenture.com Sign In page. Ethiques products are 100% plastic free, one tree is planted for every online order, their office is powered by 100% renewable energy, shipping is plastic-free, and more than 18 million litres of water has been saved in the production process. In the current period of supply chain uncertainty circular supply has practical benefits. There are several organisations offering certifications for circular supply chains some focused on supply chain alone, while others include this as part of a broader certification that includes economic and/or social standards. To see why this is the case, it is useful to compare production in a factory to production in a biological cell. As 3D printing becomes more widely adopted, decentralization in supply chains will become more economical. In an interview with Supply Chain Brain, Intel Supply Chain Manager Greg Skrovan gave a very clear answer for how Intel defines the circular economy. In addition, because of parts specialization, it is very difficult to amass enough volumes of the parts to make recycling worthwhile (or it would require very deep stripping down to the basic metals, the basic silicon, or the basic hydrocarbons that make up the thousands of different plastic variants). Rypes big idea was to identify some re-use and remanufacture, which allowed them to start, but a wider spread of this will require the development of more standard parts, which will then enable local recycling markets. Another takeaway from the Gartner survey (above) was that CSCOs are facing increasing pressure from both internal and external stakeholders to make their networks more sustainable. And there are also plenty of governments incentivising those who meet certifications. A circular supply chain is important for many reasons, but primarily because: For manufacturers and sellers, the circular supply chain is a key part of a broader move towards reducing waste and using more environmentally friendly practices. To truly build a circular supply chain, companies need to make the commitment to re-using, refurbishing, re-manufacturing, and recycling. Built on a foundation of complete sustainability, Ethique has been B Corp certified since 2015. Kua Coffee is an Australian-based coffee supplier built on complete circularity. In 2020, outdoor clothing and gear label Patagonia repaired over 100,000 of their used garments to sell through its Worn Wear initiative, and more than 520 tonnes of plastic destined for the ocean have been turned into gear by the environmentally-conscious company. This can be one of the criteria on all agreements and approvals. These initiatives span a variety of businesses. The circular supply chain aims for zero waste, which means keeping all elements of your supply chain out of landfill. And everyone should definitely be very much focused on it.. Despite the interest in circular supply chains, there are very few functioning examples. With packaging contributing to 30% of eCommerce emissions, looking at how your products are packaged especially those direct to consumers is important. This strategy could also include refurbishing items for resale. Being able to track back your packaging and pallets so they can be returned and reused is a responsible sustainable practice. Signify then receives its payment through the estimated $2million the city will save on energy costs, and they are then able to replace and recycle the bulbs at the end of their lifecycle. Advisors So theres a commercial angle to it as well as the sustainable angle.. Following the same process for supplier agreements, you can also look to product procurement for ways to enhance your circular supply chain. As an extreme example, in 2019 oceanographers found a plastic bag in the Mariana Trench, the deepest known point in the worlds oceans. Recycling, reusing and recovery solutions need to be simple and straightforward for the end user, otherwise there is the risk of them not taking the appropriate steps to sustainably dispose of the packaging. Several organisations now offer circular supply chain certification, some of which cover sustainability and ethical practices more broadly. When she's not reading a book with her cat for company, you can usually find her cooking, eating or trying to make her garden productive. Aluminum is standard and recycling can happen within the (relatively local) reach of one factory, which has made aluminum the first widely used recycling success. One area in which busin ABC analysis is an inventory management principle which stands for Always Better Control. Finally, it is no surprise that the clothing success started with uniforms, which are more standardized than fashion clothing. More and more companies are examining how their business can use the SDGs to improve sustainability practices. The good news is palm oil can be grown responsibly, protecting nature and benefitting people. Circular supply chain enables the transparency and financial incentives needed to accelerate the shift to a mainstream sustainable palm oil industry, ensuring it continues to play a key role in food security. When an item cannot be salvaged, 60.7 percent of respondents recycle it. of CEOs see sustainability as important to success, of consumers would pay more for sustainable brands, small-scale farmers live on less than $2 a day, Consumers can directly tip their farmer, rewarding responsible and sustainable practices, Producers, in-turn, gain additional direct income, driving more diverse consumer markets, A new generation of producers emerges when economic benefits ease access to agriculture insurance and a financial credit history. They get this value out of the energy savings from recycling cans to produce aluminum, which is much more energy efficient than producing it from Bauxite. In other words, the circular supply chain focuses on optimising the lifecycle of a product: instead of materials ending up in landfill, they are returned to begin a new journey in the supply chain. Millions of smallholder farmers depend on it for their livelihood and its an important crop for the GDP of emerging economies. To be sure, the initial assembly plants of complex products may still need centralization for some time to come, but spare parts could in principle be decentralized completely to the point of use. In any business model, cutting unnecessary costs wherever possible is always a good strategy to improve company profitability. Making a difference is a key point of differentiation. This year, Coca-Cola, Colgate-Palmolive, and Unilever joined the 100+ Accelerator. Nestl has signed the European Plastics Pact, to make 100 percent of its packaging recyclable or reusable and reduce its use of virgin plastics by one third by 2025. Circular supply chain holds the potential to change how food, and retail goods are produced, enhancing producers incomes and environmental outcomes. Furniture used to be made all from non-standard and customized parts, so no recycling occurred. I cover logistics and supply chain management. Still, more standardization needs to be designed in to increase the volume to do the recycling locally (rather than having to aggregate over large regions). Keen to see how the circular supply chain is already working in the real world? For example,Marsis looking at climate action, no poverty, and partnerships as part of its sustainability plans. Follow this author to improve your content experience. Not only that, but customers are increasingly demanding more sustainable and ethical practices something that looks like its here to stay. If applicable to your business, you could look to incentivise the repair of damaged or malfunctioning goods instead of replacing for new. Businesses follow consumer desires. Participating in a blockchain-enabled circular supply chain not only improves traceability but creates differentiation through empowering consumers as well as suppliers. 100% of Kuas profits go back to mobilising their farmers on a journey to climate resilience, including new native trees, soil-conserving waterways and a sustainable income. The circular supply chain takes used products and their materials and reintroduces these into the supply chain a process that can often take place repeatedly. Its easy, therefore, to see why consumers and policymakers have become interested in the concept of the circular supply chain, in which at least a large fraction of materials is recycled and reused in the product. Accenture has developed this patent-pending capability, but it is just a start. Processors, distributors, wholesalers and retailers can trace product provenance, creating market differentiation for sustainability and food security. A circular supply chain is where used products or their parts are returned or processed so they can be repaired, resold, refurbished or recycled which reduces waste from the supply chain and is more sustainable. Digital Engineering and Manufacturing Jobs, Do Not Sell My Personal Information (for CA). The value in this method comes fromusing mass production to produce goods cheaply meaning the business can sell as many items as possible. These SDGs are a collection of 17 interlinked global goals designed to be a blueprint to achieve a better and more sustainable future for all. As such, businesses that have implemented circular supply chains often couple circular supply with other sustainable practices, such as reducing energy consumption or using greener energy sources, and finding alternatives to single-use plastics. The linear supply chain is the traditional method of sourcing raw materials to make a product and sell it to consumers, with its lifecycle ending when it is no longer functioning or fit for purpose anymore and it becomes waste. Security The decision to re-use, refurbish, re-manufacture, or recycle goes a long way to improving sustainable supply chain operations and building a circular economy. Mara Seaweed, for instance, is moving its factory closer to the source of its raw materials. Where this is not possible, other changes can be made to the product or process to reduce waste and the carbon footprint. The company has also been climate positive since March 2021, offsetting their carbon emissions by 120%. Alecia's background is in ancient languages. It is widely accepted by now that the normal supply chains of material use producing materials, using them, and then discarding them into landfills, other countries, or rivers and seas are wasteful and damaging to the environment. Mr. Skrovan said that the new focus is transforming the companys reverse logistics supply chain, making it a circular economy. According to Mr. Skrovan, a circular economy is the transformation from make, use, dispose to make, use, recover, reuse, reclaim. When the company can no longer reuse an item, it will find a sustainable way to the dispose of them. If you look back at the examples of circular supply chains given above, these features arguably characterize the products involved. Many of these certification programmes adhere to the United Nations Sustainable Development Goals (SDGs), a series of 17 goals set up in 2015 to provide a blueprint for future prosperity. Within our manufacturing companies were working with people who invest in renewable energies, and theyll have cost reductions that they can pass on to us. The key value driver is the steep value decline of used furniture, most of which can be recovered with good quality remanufacturing. The SDGs were set up in 2015 by the United Nations General Assembly and are intended to be achieved by the year 2030 and are included in a UN Resolution called the 2030 Agenda. Concept EV, Drive-By-Wire Van Aims To Shake Up Last-Mile Delivery Industry, Redesigned Chevrolet Colorado Coming In Mid-2023 With Turbo-4 And Desert Boss, AI Ethics And That Viral Story Of The Chess Playing Robot That Broke The Finger Of A Seven-Year-Old During A Heated Chess Match Proffers Spellbinding Autonomous Systems Lessons, The Inconvenient Truth Surrounding Sustainability. The packaging that the refills come in are sent to an Enval site, which is then turned back into green energy.. Webinars on Demand, Health Supplement & Nutraceutical Manufacturing Software, Learn how Unleashed helps businesses around the world power their inventory management, 75 million tonnes of additional recycling materials if all countries achieved top recycling rates, inflation and supply shortages will lead to further production challenges over the coming years, With one third of consumers willing to pay a premium for sustainable products, Association for Supply Chain Management (ASCM), International Sustainability & Carbon Certification, The University of Cambridges Sustainable Supply Chain Management online short course, United Nations Sustainable Development Goals (SDGs), packaging contributing to 30% of eCommerce emissions, data as a basis for implementing a circular supply chain is essential, US company Signify, which produces lightbulbs, The key to capitalising on this is building ecosystem partnerships with waste contractors, suppliers and innovators, Kua Coffee is an Australian-based coffee supplier built on complete circularity, Renault is now also on track to becoming carbon neutral, When theyre no longer worthy of wearing, Nike wants you to return its shoes, Ethique had its humble beginnings in New Zealand, Why Automation is Critical for Supply Chain Success, Reduce Your Inventory Costs With These Strategies, As Easy As ABC: Categorising and Managing Inventory, It saves businesses costs in the long run especially as materials become scarce and/or expensive, It focuses on preventing as much waste as possible from going to landfill, Businesses can apply for ISCC Plus certification with. In addition, the water that is used is recycled and recirculated. So by shortening your supply chain so it includes local suppliers where possible, youll reduce your ecological footprint. Its great to hear that communitys expanding.. In the majority of human supply chains, product parts have proliferated and production has been centralized in order to achieve two critical goals: performance via specialization of parts (many specialized materials and designs that add functionality) and economic efficiency via economies of scale (large plants that share fixed costs and deliver to a wide area with an elaborate distribution system). IKEA has launched a program to buy back used furniture to refurbish and resell. For businesses, adopting a circular supply chain is not only more environmentally friendly, but often more economical in the long run as well. As a result, circular supply chains are likely to remain relatively rare outside those that are naturally local and simple to begin with, at least in the near term. This is possible because of two systemic features: These two key features reduce the cost of re-use and increase its value because the materials are locally available and more cheaply and quickly obtainable than materials from elsewhere. Each must get some payment or value out of participation. Over 90% of CEOs view sustainability as a strategic imperative. Used cans are separated from general trash, collected, cleaned and then reworked along with fresh aluminum. Supply chain sustainability takes on a lot of forms. They turned to repairing and replacing specified high-volume items with relatively high parts commonality. A prime example raising concerns worldwide is the expansion of palm oil plantations. Is It Better To Lease Or Buy A Car In Summer 2022? In a survey on returns management, Mr. Cunnane explored which sustainability practices organizations used when it came to returns. Companies are investing more money into sustainability initiatives, seeking to reduce waste and carbon emissions. Are Software-Limited Features Like BMW Heated Seats Or Tesla Limited Batteries Good For The Customer? Lets begin by looking at some very different examples of ones that do: Aluminum cans are recycled and reproduced at a high rate (75% in the UK). Supply chain sustainabilityis increasingly important for the future of business and the world as a whole. Here, 53.5 percent refurbish the item and then sell it, while 26.7 percent remanufacture the item, which means the item is held to higher standards than refurbishing. Both of these aim to minimise resource usage and reduce waste from the supply chain by repurposing or recycling materials or products. As highlighted above, more and more companies are looking to reduce waste and turn their supply chain operations into a circular economy. Both clothing retailer H&M and mobile phone retailer Vodafone are incentivising customers to return used items to their stores, providing them with a discount or trade-in value for doing so. The longer the supply chain, the more emissions that are produced. According to DHL, there would be 75 million tonnes of additional recycling materials if all countries achieved top recycling rates. 2022 Forbes Media LLC. Per ARC Advisory Groups survey, 64.2 percent of respondents indicated they re-use the returned item, and sell it as is. This is common for apparel and other non-electronic items, where it is easier to get an item back into a selling channel. There are a few ways companies are able to achieve this goal using reverse logistics and returns management. Inventory Blog For example, it has a strict demand-pull lean flow system (storage is extremely low, and the ratio between pure processing time and throughput time in the cell is about 2:1, which beats even modern lean production plants), and the cell uses 100% inspection quality control where faulty parts are discarded (and disassembled) immediately. At ARCs user conference this February, Accelerating a Digital Supply Chain Transformation and Sustainability, Mr. Cunnane will moderate several panels on sustainability. AI Ethics Confronting Whether Irate Humans That Violently Smash Or Mistreat AI Is Alarmingly Immoral, Such As Those Angered Folks That Lash Out At Fully Autonomous AI Systems, The Summer Of Extreme Weather, GMs Plans For One Million EVs And Turning Trash Into Cash, Wireless EV Charging Company WiTricity Wins Major Investments, Partnership As Cord-Free Charging Expands. Renault is now also on track to becoming carbon neutral. (Similar economics hold for semi-precious andprecious metals, such as copper and gold, where one can even see scavengers pick through electronics trash in landfills because it is so valuable.). There are more examples of companies looking to reduce waste across a wide variety of retail and direct to consumer channels. The bottom line, at least for the foreseeable future, is that making cyclical supply chains widespread will require that business gives up some of the economies of its large manufacturing plants and cut back on the specialization (and thus the feature performance) of parts. Maintenance The United Nations (UN) hasoutlined Sustainable Development Goals(SDGs) for global supply chains. Daniel Bull-Clearie, Head of Supply Chain at Mara Seaweed, says the company is re-thinking its packaging as well, looking into paper or seaweed polymer to replace the plastic pouches some of its products come in. We invite you to join us as we build a circular supply chain ecosystem for a more sustainable and inclusive world. There is also a range of educational courses now available that cover sustainable supply chains an example is The University of Cambridges Sustainable Supply Chain Management online short course. A circular economy is an economic system aimed at eliminating waste and the continual use of resources. For those items that cannot be salvaged, close to 40 percent are still be discarded rather than recycled. With one third of consumers willing to pay a premium for sustainable products, companies should prepare for sustainability to become the expectation and not the exception in the future. In Logistics Viewpointsnews rounduptwo weeks ago, Mr. Cunnane highlighted the circular supply chain that Intel is building. Circular systems employ re-use, sharing, repair, refurbishment, re-manufacturing, and recycling to create a closed-loop system to minimize resource inputs and reduce waste, pollution, and carbon emissions. Ensuring external suppliers are adopting circular supply chain practices, and minimising waste, is key to helping your own supply chain become more sustainable. Adopting technologies that support rising consumer interest in product provenance will position companies to thrive in the digital world. From new materials to how a product can have a circular lifecycle, there are many ways in which research and development can focus on innovation in the manufacturing process. Studies have shown that green HR management can positively influence a business sustainability performance. Ethique had its humble beginnings in New Zealand and is now a global beauty and cosmetic brand. By gaining these accreditations, companies not only ensure their internal processes are adapting to a circular supply chain, but they can effectively show evidence of their commitment to external stakeholders a circular seal of approval. So far, the 100+ Accelerators start-ups have green cleaning solutions to reduce water waste and energy use, collected more than 1,000 tons of glass waste, recycled electric vehicle batteries that store renewable electricity, and installed the first solar thermal system at an AB InBev plant. Why is circularity possible in these seemingly very disparate cases yet so hard to achieve more generally? Anything that can be managed through computer systems can be automated in the supply chain. why consumers and policymakers have become interested in the concept of the circular supply chain, a large fraction of materials is recycled and reused in the product, t is useful to compare production in a factory to production in a biological cell. For businesses looking to integrate circular strategies to their supply chain, there are many ways to do so from basic measures to more comprehensive and complex programmes. Businesses who adopt sustainable practices are also able to meet the needs of growing demand from eco-conscious consumers. Article by Alecia Bland in collaboration with our team of inventory management and business specialists. Many other certification programmes include supply chain practices as part of their criteria, some of which are country- or industry-specific. What companies can learn from successful recycling efforts. Small producers carry a disproportionate weight of assuring sustainable practices are followed, often at increased cost and reduced yield. To successfully implement a circular supply chain, its important to have participation from across the board including training and managing employees so that they are aware, involved and interested in sustainability. Chris Leads Supply Chain [+] Sustainability Research at ARC. Nike has announced that it will start refurbishing sneakers that have been returned by customers and sell them at cheaper prices. However, looking at these numbers, it is clear that more work needs to be done. David Press, Head of Operations at Three Spirit, says they look at the entire supply chain to appraise how sustainable it is and that this can be beneficial in terms of costs as well: We look at the supply chain as a whole. Usually the foundation of a circular supply chain lies in reverse logistics where a manufacturer or retailer has measures in place for items to be returned when they are no longer needed, so they can be reused, refurbished or recycled. Its a part of their Move to Zero journey towards zero carbon and zero waste, where they recycle athletic shoes at the end of their life, and produce new shoes from the materials. Were looking at getting some electric vans this year.. Renault the French car manufacturer was well ahead of its time in 1949 when they began offering used vehicle parts at discounts between 30% to 50%, but with the same warranties and guarantees as new parts. Visibility into consumer demands enables effective inventory and harvest management, reducing enormous amounts of waste. Here we take a deeper dive into the way the circular supply chain can benefit your business bottom line, with 5 key ways this method can benefit your business: When employee resources, energy and material have already been used to produce an item, it makes sense to recoup these assets time and again where possible. They also unlocked value through redesign so that a damaged sleeve on a shirt, for instance, could be easily replaced rather than the shirt destroyed. KPU realized that it was costly to destroy materials that still had use-value in them. Ben Vear, General Manager (EMA) for Minor Figures, says getting B Corp certified is something the business is proud of but the process was a challenge, partly because this certification is now so popular: B Corp thats something were really proud of. Participation provides a means to drive innovation and amplify emerging technology investments by furthering your corporate priorities. The key to building this economy is to keep products, equipment, and infrastructure in use for longer periods of time, which makes these critical resources more valuable. To encourage buy-in from customers, incentivise reuse and recycling with methods like offering discounts, or offering repair or refurbishment rather than replacement. The answer is that in the three example organizations are all able to unlock and share enough value from recycling so that each participant in the supply chain benefits and chooses to participate. Kua Coffee is also carbon positive: they measure and aim to reduce their footprint every year, as well as offset the remainder at 200%. Its primary focus was to drive profits for the organisation, at a time when raw materials were lacking in supply, but it is a practice that continues today, with the company designing its major vehicle components to be easy to disassemble for even more profitability. Please try logging in with your registered email address and password. There is already a separate, active Accenture Careers account with the same email address as your LinkedIn account email address. The key to sustainable production is changing the dynamics at the point of origin. So nothing goes to landfill. A closed loop supply chain is essentially the same as a circular supply chain. These three SDGs, combined with the companys plan to eliminate single-use plastics in its packaging, are helping it work towards a circular supply chain. To recycle and remanufacture products or components, the collection systems would have to stretch over vast distances in order to get back from the locus of use to the locus of manufacturing. Their coffee is sustainably sourced from Uganda, their packaging is recyclable, and all coffee grounds are repurposed into local community gardens and reuse projects.