What is a Circular Supply Chain & a Circular Economy?
Before the COVID-19 epidemic many of us had not heard of the phrase, supply chain. We were like small children who got whatever we wanted on demand and when we wanted it, but this self-indulgence stopped when COVID-19 hit. As long as we were getting the food we needed, along with our paper goods, we were satisfied. Who will ever forget the rush to Costco to purchase paper towels and toilet paper before these products disappeared from the shelves? We were happy enough with any off-brand paper towels that we could purchase online and thankful that our neighborhood supermarket chains were delivering the foodstuff when necessary. The United States government was also supplying families large and small with free boxes of food to feed their families who were mostly at home needing three meals a day plus snacks.
What is a Linear Supply Chain?
Thank G D we are back in the swing with products in abundance once again and the container backups at the ports have eased considerably. So, we learned quickly what a supply chain crisis actually was, beginning with the curtailment of some product manufacturing in China to the overload of container ships stuck in various ports around the world. Holiday presents were aboard backed up containers and many of our children’s wishes went unfulfilled temporarily. Some of us did see a silver lining in these delays, teaching our children that instant gratification is not necessarily related to happiness but more family time together.
Our supply chain knowledge goes something like this. Most products such as electronics, clothes, toys and even medicines are manufactured cheaply in China and shipped to America on huge cargo ships with containers piled one on top of the other. However, we learned that even if China did ship out the products there was not enough manpower at the ports of call at seaport states in our country. This is the first step in the logistics process. Then the good news comes that the relevant containers have been unloaded at a port in a state such as Los Angeles, but how will your grandson’s holiday gift get to the east coast in time?
Depending on the drayage arrangements, the products in question can be attached to a hauler or put on a train. Usually, one truck will bring the products to a warehouse in one city and another truck will bring it closer to the destination. But there could be numerous types of transportation systems involved until a product reaches the consumer. Also, it must go first to the store's warehouse before it gets to the store.
In a traditional linear supply chain, once the products are used they are disposed of and ultimately brought to a landfill. The supply chain will move along this path; from raw materials to manufacturing to the consumer and ultimately to the landfill. According to the World Economic Forum 1, of the 2.12 billion tons of garbage that is produced worldwide only fifteen to twenty percent will be recycled.
In the last several years we have noticed that many products such as clothes are being made from recycled materials. For example, clothes that were worn that buyers return are reused and remanufactured into new freshly modeled items for sale as new. The number of raw materials and the amount of waste thrown out is dramatically diminished. With these modernized methods of production instead of the supply chain ending at the consumer when he or she disposes of the product it continues back to an appropriate plant to be remade into other products. The first method is linear, and the second method is called circular.
Planning for a Circular Economy
We are well aware that products especially from China are manufactured as one and done. This means that by the time your oldest child’s pants have been put through the washer and dryer it is quite unlikely to be passed down to his younger brother. The concept of “planned obsolescence” was the way to go for the past century when it came to the manufacturing of typical household goods. This means that a product is specifically designed to become useless and outdated within a short amount of time. So even if your oldest son’s pants do survive constant cleaning, they will be out of style by the time his brother fits into them. In the sixties, bell bottom pants were the rage but after several years they were obsolete no matter what condition they were in. Today, boys' and men’s pants are so narrow and tight, but this will ultimately change so that consumers will have to buy the newer styles.
The concept of recyclable plastic bags was met by many with disapproval. Who wants to reuse bags that were filled with perishables such as meat and milk? Yet frugal minded consumers are beginning to realize that they can carefully reuse plastic bags, and many have purchased canvas ones to use again and again. This debate has been mitigated and there are many shoppers who come in with their own bags and it’s not only limited to Trader Joe’s shoppers who were always eager green people. (Ironically Trader Joe’s still gives out free paper shopping bags while many other supermarkets charge for them).
Recycling Printer Cartridges
The recycling of printer cartridges has been going on for many years and some companies will let you send your used cartridge back to them by UPS at no charge. What can printer companies possibly do with those used cartridges that otherwise would have a good chance ending up as non-recyclable garbage?
John Gagel the chief sustainability officer at Lexmark leads the way in the returning of its laser cartridges for the specific intent of reusing the plastic from them. About forty percent of their returns can be used to reproduce completely new cartridges keeping within Lexmark’s specific quality control specifications. Even if the used cartridges do not meet the qualifications, the raw materials they are made of can be broken down into plastics, metals, and resins. The products will be used as a direct source of resources in place of garbage disposal. Their products are originally designed with circular economy in mind.
Take resin for example, Gagel first began to establish circular concepts with his engineering team with using both new and used resins increasing the utilization of the used resins to up to almost forty percent. Almost seventy-five percent of the leaders of large companies are trying the circular supply chain approach, reducing substantially the amount of waste that is used in linear supply chain strategies.
More than 6,400 metric tons of used parts were redirected from landfills and recycled by Xerox in the U.S. Reverse Logistics Center in 2021. Xerox is boasting a remarkable turnaround of more than ninety- nine percent of their products back to their factories avoiding landfills.
Xerox has been making paper copiers since 1959 claiming the synonym for copying as Xeroxing. Today there are many copier companies competing for the copier market, but Xerox was the first. This is how Xerox accomplishes these amazing statistics of recycling over ninety-nine percent of their products. Al Gallina, vice president of America’s supply chain operations, explained that when a product is returned by the customer, they disassemble the parts with a process named, “dynamic disposition”. The remade products are on the same quality level as their new counterparts.
If your family members are Chinese food fans, I bet there are some stranded chopsticks hanging around your kitchen doing nothing. They look too good to throw out yet how many do you need per meal? How many family members use regular flatware instead?
Felix Bock, a sustainability expert, had just finished giving a seminar in Vancouver British Columbia when he noticed a waiter disposing of his chopsticks at the sushi restaurant where he was eating. It was great to speak at seminars about how to recycle materials but what had Felix ever done in reality to show the importance of going green?
Right then and there Felix decided he had to experiment on how a circular economy works instead of just speaking about it in theory. He developed a company named, “Chop Value” to create cutting boards and coasters out of disposable chopsticks. Chopsticks are usually made from bamboo and his staff collects about 350,000 chopsticks from restaurants in Vancouver every week and they have so far totaled 70 million pieces to date. High heat and pressure at his microfactory turn his chopsticks into a variety of new products ranging from desks, wall panels, cutting boards and even stairs.
These codes help consumers learn more about the products they purchase. Patagonia, a clothing company, has found a new use for QR codes. Jennifer Patrick, the head of branding and packaging, identifies it as a way to keep track of what happens to the products they manufacture. By placing the QR code directly on the product instead of the tag, the voyage of the product from production to sale will keep the product from ending up in a landfill. By scanning the code into the computer, the consumer and the manufacturer keep close ties on what happens to the product. For example, someone purchases a sweater and after a while decides that they don’t want any more they will get information from Patagonia or another involved company where their sweater originated. They can find out if their sweater can be returned for reusage just like the laser cartridges.
Another company that is hopping on the circular supply chain is the iconic, Ralph Lauren which symbolizes the American consumer. A Lauren product, called “Cradle to Cradle Certified Gold Luxury Cashmere Sweater” is a product with a commitment to circular economics. By a level multilevel process for certification, it is connected to a channel that lets people recycle any one hundred percent cashmere product that they no longer want even if it is not a Lauren brand.
If these types of relationships between consumer and manufacturer succeed in developing this is a perfect way to prevent clothes that are no longer needed from ending up in landfills and garbage dumps. Companies are learning how to recycle fabrics and use them to make brand new garments. Next time you see a label or QR code stating that your new item is made from recyclable material, don’t despair if it is sanitary and new. It is just one of the remarkable ways that innovators are making the turnaround from a linear supply chain to a circular one.
We have touched on, but a few examples of how large and successful companies are reusing their old products to make new ones. The time is right for consumers to hop on the bandwagon. Because of all the problems with the global supply chain people have realized how we rely on the rest of the world for both our vital products and our luxuries. They are more willing to team up with retailers and extend these new technologies to other parts of our world.