A push for sustainability: Time to make linear supply chains circular
Linear supply chains are wasteful and take a heavy toll on the environment, while in circular supply chains the raw materials used are recycled back into the manufacturing operation leading to reduced waste, cash savings, lower carbon footprint and new jobs
Imagine a day when you are drinking or chewing plastic. Let's consider a dish: beef curry with fried plastic. Sounds delicious, doesn't it? You are probably assuming I have lost my mind. But I assure you, the consumption of plastic is happening now, and I am not spreading lies.
A few weeks ago, scientists in Italy found the presence of microplastic particles in human breast milk for the first time. Similarly, a group of researchers in the Netherlands detected the presence of microplastics in human blood earlier this year in May. And about four years ago, the Environment Agency Austria found it in human stool, for the first time, through a small study involving participants from Europe, Japan and Russia.
In all these cases, the experts have made an alarming claim that we are already consuming plastic and it's physically harming us.
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From the moment we wake up in the morning till we sleep, plastic materials surround us - from simple toothbrushes to our mobile phones, nearly all products that we use daily are one way or another connected to plastic materials.
According to BTRC, just in July 2022, 20.36 lakhs of feature phones and smartphones were produced in Bangladesh.
The problem is not that we use plastic, the problem is what we do after it has served its purpose.
Now let's come to the pivotal role a supply chain plays in the overall business function. And that of a circular supply chain, instead of a linear approach, which can ensure a green and sustainable future because it translates to an effective way of resource management.
Recently, the importance of a circular supply chain started to gain traction as visionary industry experts started to address it. Big brands operating in Bangladesh have been practising a concept known as the "circular economy."
In simple terms, we usually follow a linear approach from production to consumption for a certain product. Brands are trying to create a loop where a certain portion of the produced goods can be recycled and reused after consumption, making it a circular process.
In effect, the process can reduce waste, save money, save the environment and create jobs — making the world a better place both economically and ecologically. And this is where the concept of a circular supply chain plays an unprecedented role.
Circular Supply Chain Management (CSCM) incorporates the circular economy principle into supply chain management, providing an innovative and compelling perspective on the field of the supply chain. CSCM is receiving greater attention now as a superior alternative to the traditional linear supply chain paradigm. Consumers and manufacturers acknowledge that reusing hazardous and scarce resources is the most effective method of environmental protection.
And this shift from a linear to a circular supply chain is underway worldwide in recent years. This linear chain has been sufficient to keep certain sectors of the economy afloat, but the circular supply chain is more cost-effective. It is an idea that incentivises manufacturers and retailers to find ways to reuse materials that have been thrown away.
The circular supply chain concept heavily stresses two core segments – sourcing and packaging. Bangladesh was one of the first countries to declare a ban on using single-use plastic back in 2002. But due to a lack of effective regulations and monitoring, the use of single-use plastic still dominates.
About 5,000 businesses in Bangladesh produce a variety of plastic goods to meet the local demand and contribute to exports. Multiple sources indicate that Dhaka's annual garbage (plastic and otherwise) totals approximately 1,825,000 tons (the daily amount is 4,000-5,000 tons). The World Economic Forum (WEF) anticipates that production may be doubled by 2040.
Many businesses are still examining how to implement logical flaws in their sourcing, production, transportation, and overall supply chain to implement this relatively new concept. Worth mentioning here is that international rules and innovative environmental methods are accelerating the transition of businesses to adopt a circular supply chain mechanism.
The changemakers
The European Commission adopted an ambitious "Circular Economy Package" for 2030. It offers improved legislative recommendations regarding garbage management to expedite Europe's transition towards a circular economy.
The Circular Fashion Partnership (CFP), based in South Asia and Europe, includes brands like Marks & Spencer, OVS, C&A, and KMart Australia, alongside several garment manufacturers and recycling firms in Bangladesh. They are serving as a model for other developing countries like Vietnam and Indonesia in the apparel and fashion sector.
Most of the supply chain professionals in Bangladesh work in procurement functions, which is an integral function of supply chain management. Global procurement managers, who focus on a green supply chain mechanism, actively strive to reduce the length of a supply chain to lessen the ecological consequences and reduce costs. Additionally, a circular supply chain reduces dependency on supplies of various raw materials.
Our supply chain is stressed more than ever.
In the last 2.5 years, we have experienced several disruptions due to the coronavirus pandemic, which were exacerbated by the Russia-Ukraine war. As a result, ensuring stability at every stage of the supply chain is more important than ever. Experts claim stability during current crises can be ensured through the adoption of a circular supply chain mechanism.
About 80% of Bangladesh's export earnings are generated through the RMG industry. The clothing retailer, H&M, is serving as a model for the country's RMG manufacturers.
H&M is the largest RMG sourcing retailer for Bangladesh. In 2019, it purchased approximately $3.5 billion worth of apparel products from its 235 Bangladeshi garment suppliers, which is over 10% of Bangladesh's total apparel exports.
The company has stated its intention to make its operations circular by collecting discarded H&M apparel and recycling it into new items. They have placed In-Store Collection Containers (ISCC) in several locations, making them available to consumers to donate their used clothing items.
H&M asserts that more than 50% of the materials used in its new apparel are now either recycled or derived from sustainable sources. They also plan to boost the figure to 100% by 2030.
Another example is Unilever Bangladesh, which has set a goal of achieving 100% reusable, recyclable and biodegradable packaging by 2025.
Ways forward
To ensure a proper circular supply chain adaptation, businesses must commit to reforming how they produce, consume and reuse plastic. So, setting a long-term goal is the first and foremost initiative that management needs to address.
Secondly, understanding your suppliers' use of plastic and collaborating with them is essential for reducing plastic use in manufactured products. It is a must to measure the use of plastic materials at every level of your supply chain - from production to packaging - to determine your level of carbon footprint. This includes monitoring your suppliers' plastic waste policies and current plastic use indicators - essential to measure progress towards achieving the long-term green goal.
Regulation and policies will play a vital role as disruption drivers. Companies that implement circular strategies and business models early on will have a competitive advantage in working with governments to accelerate the transformation. And to that end, government support and effective legislation (the provision of financial opportunities, training, effective taxation policies, reduced import duties, etc.) are essential for the industry to establish a circular supply chain setup.
A proper design of a circular supply chain is still under design and unlocking its fullest potential is yet to be explored. But as we move slowly to reduce the friction in exploring the capabilities of a circular supply chain process, we are increasing the chances of a sustainable future.
All this is to reiterate, we must not forget that we still have a plan B to save the planet, but we don't have a planet B.
Mohammad Ashraful Islam Khan is also the Co-founder and President of The Supply Chain Street (a supply chain magazine, published by Alliance of Supply Chain Professionals in Bangladesh).
