A Guide to Sustainable Supply Chain Management

The constant flow of raw materials, energy, and food along the supply chain is what keeps modern civilization going. Yet over 90 percent of the impacts on the air, soil, and land caused by consumer products is due to the supply chain. Over 80 percent of a consumer company’s greenhouse gas emissions also come from its supply chain. The harvesting of resources, the inefficient use of those resources, and the waste products entering the environment at the end of the supply chain are degrading the natural world.

Eventually, the waste, pollution, and resource depletion caused by supply chain operations will put the livelihoods and the lives of those billions of people it supports at risk. However, as MIT faculty member Peter Senge told the Harvard Business Review, “Innovation is what companies do best.” Businesses need to develop creative, innovative solutions in response to the challenge of sustainable supply chain management.

Why Closed-Loop Models Are Vital to the Sustainable Supply Chain

The environment faces several pressing concerns. Greenhouse gas emissions are perhaps the most urgent, as we confront a widely acknowledged climate crisis. Another is the abundance of plastic in the natural environment, in wildlife, and even, increasingly, in our own bodies. Closed-loop supply chains can mitigate these issues. Reprocessing plastic along with steel, aluminum, glass, and cardboard helps keep these materials out of the natural environment. It also saves energy, since recycling generally requires less energy than is needed to refine petroleum into virgin plastic, crush and smelt ores, or transform pulp wood into cardboard.

The concept of reusing and recycling materials is a simple one, but the reality is more complicated. The supply chains that keep our economy running resemble a huge river network; small streams flow together into factories, then spread out to retail stores, and then branch out again into the hands of billions of consumers. Reclaiming all those used products and packaging material is a little like making a vast river delta reverse course and flow back uphill.

In order to create a truly closed-loop, sustainable supply chain, whatever waste can be used for other purposes should be filtered out and directed to factories that can use it or reprocessing centers that can turn it into something that factories can use. This is a challenge because there are so many sources of waste, not only from billions of individual consumers, but also from the industries that employ them and that supply them with food, shelter, soap, toys, furniture, and other products.

Reusing and Recycling Is Key to a Sustainable Supply Chain

The most obvious challenge of creating a sustainable supply chain is the size and complexity of the modern supply chain. Billions of waste streams must be aggregated at a centralized location in order to produce usable recycled materials in amounts that are profitable. But the challenge does not end there. Waste streams, especially consumer waste streams, often mix materials and these must be grouped by type in order to be recycled. Some of the most commonly recycled materials are:

Paper Products: Cardboard and paper products are easily recycled, but paper products need to be sorted by their coarseness. For instance, printer paper, packaging paper, and cardboard streams need to be separated for recycling. Paper product fibers also shorten with each recycling and can only be recycled five to seven times before the fibers become too short.

Glass: Glass can be recycled over and over again without degradation simply by melting the glass down; however, there are many different varieties of glass. Window glass is different from that used for beverage bottles and glass items must enter the correct recycling stream in order to be reused.

Steel: Steel, like glass, can be recycled over and over again without losing any strength. Recycling steel requires less energy than mining and refining ore, meaning that recycling steel can significantly reduce carbon output.

Aluminum: Aluminum can also be recycled a limitless number of times. Like steel recycling, aluminum recycling offers significant energy savings over extracting and refining raw ore. It is also a much less expensive process than refining aluminum from raw ore.

The above materials have been successfully recycled for a long time, yet much of the recyclable waste generated by consumers is not recycled for a variety of reasons. Recycling may not be available in a consumer’s area, they may not know where to take items, or they may not be aware that an item is recyclable.

The same issues also apply to plastics, which as a class are one of the most common materials used in consumer packaging. Recycling plastics can get complicated, since maintaining color and consistency in batches of recycled plastic is tricky. The result is that, while plastics can be recycled, recycling plastics is not as demonstrably profitable as recycling other materials. This has led to a lack of recycling programs that can handle certain types of plastic as well as incentives for consumers to collect and turn in their used plastic packaging and other items.

The Problem of Plastics in Sustainable Supply Chain Management

The term plastics encompasses a wide range of materials, all of which have different chemical formulations, different molecular structures, and different properties. These different types of plastic also have varying levels of recyclability. The seven categories of plastic in common use in consumer packaging are:

Plastic Abbr. Numerical Code Uses Recyclable
Polyethylene Terephthalate PET or PETE Also known as polyester. Mostly used for plastic beverage bottles and food wrap. Yes
High-Density Polyethylene HDPE A strong, thick plastic used for grocery bags, milk jugs, and shampoo bottles. It is a stable and durable plastic that is food safe. Yes
Polyvinyl Chloride PVC Used for making blister wraps, detergent bottles, and water and sewer pipes. It is commonly mixed with a wide variety of additives to give it different properties. No
Low-Density Polyethylene LDPE LDPE is a thinner and more flexible form of HDPE. It is used to make grocery bags and squeeze bottles. Yes
Polypropylene PP A food-safe, strong, versatile, and heat-resistant plastic used to make sport bottles and food containers. Rarely
Polystyrene PS Known as styrofoam in expanded form and used for egg cartons and insulated food and beverage containers. In its non-expanded form, it is used to make plastic plates, cutlery, and cups. Rarely
Other PC and Others All other plastics. Polycarbonate (PC) is the most common. Due to the uncertainty associated with this recycling code it is almost never recycled. No

Complicating the issue of plastics recycling is the fact that a single piece of packaging might be composed of several different types of plastic. Consider a mesh bag of oranges at the grocery store: the plastic mesh bag, plastic clip closure, and label identifying the product are likely made of different types of plastic and each part of the package must enter a separate recycling stream in order for the material to be reclaimed. The mesh bag the fruit comes in is most likely HDPE plastic, the clip that holds it closed is likely made of polystyrene, and the label may be paper laminated with plastic.

Despite the difficulties of recycling plastics, it’s important for any business interested in implementing sustainable supply chain management practices to reclaim and recycle plastics or to develop packaging that is more easily recyclable. That’s because plastics do not break down into their constituent chemical elements. Instead, they break down into smaller and smaller bits of plastic called microplastics, which enter into the food chain and are damaging to the ecosystem as a whole. Degrading plastic also releases methane, a greenhouse gas with substantially more warming potential than carbon dioxide. For these reasons, recent interest in closed-loop, sustainable supply chains is largely concerned with finding ways to keep plastics out of the environment.

Closing Loops and Creating Circular Business Models

Perhaps the best way to create a sustainable supply chain is to turn a linear supply chain into a closed-loop system. This requires partnering up with suppliers that support sustainable practices and can develop a circular plan for the full lifecycle of a product and its packaging.

Major national and worldwide brands already run recycling programs for waste like cardboard, aluminum, metal, glass, and plastics used in their supply chains. To create a more sustainable supply chain, these should be extended wherever possible. An example might be finding a partner to reuse polystyrene, polypropylene, and other plastics that aren’t easily recyclable.

Product packaging should be redesigned for reuse, biodegradability, or ease of recycling. Using natural and biodegradable materials like wax to give cardboard water resistance instead of plastic can make a positive difference. To make packaging easier to recycle, a company striving for greater sustainability might start making product containers out of HDPE only instead of mixing HDPE and PP. Simplifying plastic use can also reduce energy expenditures overall, which is another overarching goal of sustainable supply chain management.

Reducing Energy Costs for Sustainable Logistics

One major reason that plastics have become so omnipresent in consumer packaged goods is due to the energy savings they offer. A plastic soda bottle weighs far less than a glass one, and when it comes time to ship a load of soda to the consumer, this lighter weight pays off in two ways. The first is that more product can be loaded onto a truck before the truck reaches the maximum allowable weight. This reduces the number of trips needed to fulfill orders. On loads that are limited by volume, plastic’s light weight means that less fuel is required to deliver the load.

In many cases, switching to a type of packaging other than plastic would increase fuel costs along with a company’s CO2 footprint. Sustainable supply chain management should focus on improving recycling numbers, using more recycled materials, and reducing the amount of packaging used overall rather than eliminating all plastics. Partnering with recycling, reprocessing, and repackaging firms in areas where a company’s product is heavily used is one step in the right direction. 

Utilizing Existing Circular Models to Build a Green Supply Chain

The easiest way to begin developing a sustainable supply chain is to take advantage of closed-loop models that already exist. Pallet pooling services provide a good example. These companies manage a nationwide network of shipping platforms that support the supply chain. When one company is done with a pallet, the pooling company reclaims the pallet, inspects it, and provides it to another customer nearby. It is one of the most efficient circular business models currently in place and allows shipping pallets to be reused dozens of times while minimizing empty transportation legs. Pooled plastic pallets make this model even more environmentally friendly, since plastic pallets have several sustainability advantages over pooled wood pallets:

Durability: Plastic pallets are more durable than wood pallets, and are able to make around 100 trips through the supply chain in their lifetime. Reusable wood block pallets, on the other hand, have a usable lifespan of about 20 trips, after which they are generally taken to a landfill.

Reduced Product Damage: The greater durability of plastic means no splinters, broken boards, or loose fasteners. This translates into fewer opportunities for product damage and load rejection. Fewer wasted products mean less waste overall and fewer products needed to fulfill orders.

Lighter Weight: Plastic pallets are also far lighter—up to 35 percent lighter—than wood block pallets and therefore reduce the fuel needed to transport products. Since plastic pallet pooling services use a closed-loop model, there is no need to worry about plastic escaping into the environment. Plastic pallets are valuable assets built to be used over and over again.

Recyclability: When a plastic pallet is at the end of its natural life, it can be ground up, melted down, and turned into a new plastic pallet. Plastic pallets provide a rare example of true cradle-to-cradle recyclability.

Plastic pallets made of HDPE plastic can be created directly out of recycled plastic packaging, providing one way to keep plastic out of the environment. Because of the strength, durability, and longevity of high-quality plastic pallets, plastic pallet pooling is perhaps the best example of a closed-loop supply chain system currently in practice. This model proves that plastic can be sustainable if properly used. A plastic pallet pooling provider is also an example of a sustainable vendor that can support businesses seeking partners in environmental accountability.

The iGPS pallet pooling program rents durable and 100% recyclable plastic pallets that help companies build a more sustainable supply chain. To learn more, give our team a call at 1-866-636-6443, email a specialist at [email protected], or visit our contact page.