Matt Quinn asks: Is the future of the supply chain circular?
While driving efficiency is high on the agenda for many companies around the world, it is undoubtedly one of the most important issues that companies operating within the supply chain should be discussing in 2020.
In fact, the impact of optimised, more efficient supply chains spreads much wider than the industry – presenting benefits for business, society, and the planet, as a whole.
Now that businesses are investigating the challenges the new decade will present, I think it’s important to reflect on the changes in technology and society that have led us here. Ten years ago, would you ever have imagined that you could order something at midnight and have a realistic expectation of it arriving early the next morning? That’s the reality of today.
Consumers are now confronted with unlimited choice – they’re able toget things wherever, whenever, however. With this choice comes expectation – people simply won’t be satisfied with slow or inefficient service.
We can say with confidence that today, directly enabled by technology; everyone’s expectations have been changed irreversibly.
Another direct impact of these changing consumer expectations is added complexity for supply chain networks. And where we have added complexities, inefficiency and waste soon follow.
It wouldn’t be an overstatement to say the logistics sector worldwide is at a critical point in its history. In addition to unprecedented demand for unlimited choice and the resultant expectation for near-instant results, never before has there been such pressure on the sector with regard to rising fuel prices, driver shortages and, of course, the growing need to be environmentally responsible.
This is a big problem. The fact is our industry is now one of the biggest contributors of greenhouse gas emissions, with transport responsible for over 24 per cent of all emissions in the EU. And if that’s not enough – supply chain networks generate 25 per cent of all waste globally, largely through corrugate and single use shrink wrap.
Larger customers, including retailers and those involved with consumer goods, are becoming increasingly aware of the impact inefficient supply chains are having – whether that be on their resources, reputation and even their bottom line. That’s why many are now setting major public commitments to move towards ‘zero waste’.
As the environment and climate crisis are now firmly on the front page and public concern continues to rise, the impact our industry is having on the planet has become socially unacceptable, and we’re now being faced with a dual challenge – to continue moving exponentially more while making dramatically less impact on the environment.
So, what is the answer? Well, there isn’t a definitive one. 11However, as an industry, we need to show leadership and put our collective skills, knowledge and experience to work to find long-term, sustainable solutions.
For a start, there are many ways we can respond to this dual challenge and make supply chains more efficient – and I truly believe the methodology of this lies within collaboration and embracing the ‘circular economy’.
Awareness of the circular economy has never been greater, with a recent report by ING revealing that 62 per cent of companies now plan to move toward circularity. The industry understanding of what constitutes a circular economy is well-established: a shift away from the principle of ‘make, use, and dispose’ with the replacement of ‘dispose’ with ‘re-use, repair, return, recycle’.
For example, at CHEP we know there are huge wins to be gained through greater customer collaboration to reduce and even eliminate unnecessary empty vehicle movements, of which there are around five million kilometres’ worth in the UK alone every year, according to the Office for National Statistics.
To put that in perspective, that’s almost a third (29.8 per cent) of vehicles driving up and down the country causing pollution and wear and tear on the road network while not actually carrying any goods.
Back to the broader issue, and the major obstacle for those looking to adapt their linear business models towards circularity is that businesses need to champion the concept of waste being a planet resource, not a burden.
Society generally agrees that pursuing the circular economy is the right thing to do. But all stakeholders in the supply chain must engage in greater analysis of data and assets to identify the solutions that can help achieve the circular economy.
It’s important for companies to focus on mutual value – not just as buzz words, but as something real where you’re trying to create value for multiple companies across the supply chain, and for wider society too. v
Matt Quinn is Vice-President of Northern Europe at CHEP. CHEP helps move more goods to more people, in more places than any other organisation on earth. Its pallets, crates and containers form the invisible backbone of the global supply chain and the world’s biggest brands trust CHEP to help them transport their goods more efficiently, sustainably and safely. As pioneers of the sharing economy, CHEP created one of the world’s most sustainable logistics businesses through the share and reuse of its platforms under a model known as ‘pooling’. CHEP primarily serves the fast-moving consumer goods (e.g. dry food, grocery, and health and personal care), fresh produce, beverage, retail and general manufacturing industries.