The virtuous circle – How manufacturers can maximise reuse and recycling

Only around 19% of the approximate 90 billion tonnes of raw materials extracted worldwide each year is currently recycled or composted, with about 81% dumped, incinerated or sent to landfill, according to Deloitte’s estimates, and that volume is expected to double by 2060. Meanwhile, the Ellen Macarthur Foundation, the global group focused on promoting the circular economy concept, has estimated that developing circular business models, in clothing manufacturing alone, could be worth $700bn overall by 2030. However, that won’t happen if ‘circularity’ is treated simply as an add-on to a traditional, more ‘wasteful’ way of doing business. Instead of campaigns that simply incentivise customers to return products for resale, remanufacturer or recycling (by offering vouchers for new product purchases), the foundation urges businesses to rethink performance indicators as well as customer incentives and the customer experience in ways that encourage increased and more sustainable use of the same raw materials.

“Products need to be designed and made to be physically and emotionally durable, and able to be remade and recycled at the end of their use,“ the organisation states. “Co-create supply networks able to circulate products locally as well as globally.“ Operations and logistics expert Emile Naus, Partner at supply chain consultancy BearingPoint, suggests that this really puts the onus on redesigning products so they can be rented, resold, remanufactured or otherwise reused. “With product design, that’s something where, as manufacturers, you can do a lot; probably 75-80% of the issues are created at the beginning. So if you design well, you can build in circularity,“ he said. Sectors such as automotive parts, and increasingly in some electronics such as smartphones, already have some solutions involving supply chain collaboration.

A blast from the past?

Other past collaborative efforts include the Netherlands’ previous glass bottle standardisation programme for exchange and recycling. Schemes of that sort might look ripe for revival, especially when supply chains can use digital analytics and computers to share data and work together for economies of scale.

“Manufacturers agreed to use the same shape, colour and spec of bottle. Any bottle could go back to any manufacturer for cleaning, relabelling and reuse via a deposit system where retailers charged customers, incentivising them to bring them back,“ Emile explained. This may entail jettisoning ideas around differentiating via packaging to some extent, and may not even require any fancy tech. Ultimately, organisations can collaborate on the materials to use, the most efficient storage strategies, how to put it all together and create a ‘return’ revenue stream – as well as redesigning the supply chain itself to meet these needs. Some changes will need to depend on top-down regulatory shifts to ensure that value can be created, but there’s little stopping manufacturers from sharing data and developing more circular industry-wide approaches, meanwhile. “The question becomes how committed are you to this sustainability?“ Emile added.

“Is the product merely technically recyclable, or is it economical to recycle – that’s much harder. Too many things are branded as recyclable because you can put them in recycling, but that often doesn’t happen if it’s cheaper to buy new raw materials.“ The benefits could be huge Roger O’Brien, Project and Technical Lead at the University of Sunderland’s Sustainable Advanced Manufacturing project, said working together towards reducing waste and achieving a more circular economy within manufacturing could deliver “huge“ economic and environmental benefits, with manufacturers reducing purchases of raw materials and therefore the associated costs. “One of the most efficient ways is through the introduction of alternative recyclable materials into the production process, allowing end-of-life products to be fully recycled,“ he said. For those reasons, manufacturers should collaborate on removing obstacles to achieving this, especially in terms of education.

Many companies are reluctant to switch to new, greener materials and processes due to the perceived costs, when closing the loop could offset “significant“ capital outlay over time. Data-based insights from ERP and other business software platforms are already able to help prove the business case, incorporating new technologies such as ‘near-net’ manufacturing, including additive manufacturing, which reduces additional operations and finishing, he added. “Investing in recyclable materials could increase demand for products due to their green credentials and there could be cost savings from reusing recycled material or even remanufacturing products,“ Roger said.

As an example, the SAM project stands ready to help with the education task of breaking down barriers to process and product improvement. Jinender Jain, Head of Sales for the UK and Ireland at digital transformation and business re-engineering services provider Tech Mahindra, suggested that data-driven insights can as easily help businesses trying to achieve circularity while managing inflation, cost of living and resilience pressures in the same breath. “From a strategic vision perspective, there is a huge drive to avoid waste,“ he agreed. “And demand from consumers is driving discussion.“ Jinender echoed the overall perspective of Emile Naus, Roger O’Brien and others. Business intelligence and analytics, garnered via monitoring and management software in the enterprise, is key to driving collaborative efforts on circularity and the elimination of resource waste, because it increases the availability of quality information that can be used to make valid business decisions.

Moving forward on sounder foundations

Data on how products might be repaired and reused can be analysed and conclusions founded on sufficient bedrock for the enterprise to move forward, without waiting for regulation to mandate change. It can also free up in-house resource to focus on collaborative or individual efforts, not only on developing but implementing improved designs that help reduce waste and reach circular economy goals. Repairs and maintenance can be made easier and shelf lives lengthened, all of which helps move an industry nearer an ideal of zero waste. “That’s the first thing which is going to help in the circularity of the economy. Right now, we are in the region of being at somewhere less than ten percent of the economy – with billions of tonnes of waste going to landfill,“ Jinender said.

Extracting core materials for recycling and reuse must be coupled with a linked-up approach that takes in the whole supply chain through traceability of materials for retrieval, for example. Suppliers of goods and services, including IT, to manufacturing and retail, are also key partners here, he noted, especially because, while solutions vary, accurate data sharing for transparency which can be acted upon is crucial. “There are different ways of going about these things. You may need to change your manufacturing or shop floor design. You may need to keep the cost down as well. It is not easy,“ Jinender added. “Cost per unit may go up.“

Collaborative efforts should devise more approaches that can be implemented without top-down mandates from government. Without grassroots and industry action from the first instance, progress on circularity may remain glacial, he noted. Jinender gave a practical customer example in packaged medicines, typically retail, with mandatory, multilingual leaflets detailing side effects and other information. The company realised that almost no one reads the leaflets, and the resources for creating them are largely wasted.

Hacking a packaged solution

A team-and-customer hackathon came up with a solution: adding a scannable code or link to full details online on the box, instead of providing the traditional leaflet. “It was a large saving,“ said Jinender. “It has completely done away with the need for putting a paper inside a three-package medicine box. It is now rolling out in Asia-Pacific. For some other countries permissions are sought.“ Regulations in force sometimes leave considerable scope to make changes that aren’t always explored. In this case, the actual stipulation was only that the information needs to be provided to the end user; it is left to the manufacturer to decide the best way of fulfilling this, the appropriate packaging materials to choose, and so on, Jinender noted. “Then newer business models will appear,“ he said. “And technology is also going to catch up with this, providing the right level of information on the solution or problem. Can I have accurate information on tracking or products I am using? If I need to wash jeans 25 times, can I do it with a less water, or can I extract something more, or use less hazardous materials in my processes?“

Mark Yeeles, Vice-President of Industrial Automation at industrial IT manufacturer Schneider Electric, said the drive for circularity should become “more than a mindset“ – nearer a way of life for manufacturer communities. “Many large industrial companies have said reducing carbon footprint is a top-three strategy – OK, great. But then you look at reports that show one in six hasn’t done any mapping (of carbon use) at all,“ said Mark. So a ‘smart factory’ programme will of course help as a start. Once you’ve got measurements, you’ve got data that can be analysed, with resulting strategies then thought through, defined and applied to improved policy and practice around organisations across the supply chain, as a collaborative effort. Working with clear expectations scoped out, and applying an optimum circularity methodology, helps ensure the right principles are applied for the right purposes, which can be bigger than simply working with your own data and experiences. “If you’re a consumer packaged goods manufacturer, for example, your focus might be on packaging challenges, because that’s the bit the customer ‘feels’, as it were,“ Mark explained. He added that devising and applying simple and partial changes that reduce waste can be a better way to go than trying to “boil the ocean“.

“You can also look at machine builders and ask how they optimise their circular loops.“ Schneider’s ‘green premium’ partner programme has helped it reduce its own primary resource consumption by “about 157,000 metric tonnes“ through retrofit, recycling and take-back programmes. Understand objectives, establish baselines and set goals with an understanding  understanding of what peers are doing. Look for industry benchmarks on, for instance, energy use. He suggested that more of that sort of activity needs to happen.

Collaborative efforts exist – but could grow

Certainly getting government funding can be “a bit complex“, but there are also catafalque-type groups around the country – or like the Manufacturing Technology Centre (MTC). In such groups, manufacturers can share insights and work towards developing circularity endto-end, with the right partners. Mark Hughes, UK and Ireland Regional Vice-President at business software vendor Epicor, gave The Manufacturer some pointers on how to start closing loops further and faster by using data, noting that aspects of circularity have been applied by segments of manufacturing for decades (automotive being an honourable example).

Epicor has worldwide automotive spares supplier Carwood as a customer as well as industrial equipment focused Radwell. “It used to be the grey market. Now it’s the green market,“ Mark quipped. “There’s long been good examples, but it hasn’t been mainstream.“ Quality traceability, trackability and reuse or repair rely on quality information about resources and supply chains, which means collaboration and communication must be rock-solid, especially if there is to be a return on investment. With supply chain disruptions and price pressures altering the sustainability versus cost and availability balance, using software to record, analyse and manage the required data will become a key method to meet challenges for resource, materials or product reuse, especially when intelligence can be shared to help make circularity efforts cost-effective.

“For some, sustainability is becoming integral in their manufacturing cycle because they can’t source product from anywhere else,“ Mark reported. “Companies like Radwell are coming to the forefront because they’ve got product.“ Collaborative marketing efforts could include a focus on making end users more aware of the opportunities to source or purchase remanufactured or refurbished, as well as any add-on services such as extended warranties. “So we’ve got to get better at using technology such as B2B or B2C collaborative selling tools,“ Mark said.

Key takeaways

• 81% of extracted raw materials is dumped, incinerated or sent to landfill

• In clothing alone, ‘circular economy’ business models could return $700bn by 2030

• Measuring and metrics is key – which means leveraging data using digital technology

• For maximum benefit, data and insights should be shared up and down the supply chain

• With this information, the industry becomes empowered to increase circularity

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