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Welcome to the sixth installment of our ten-part series on transitioning from the traditional linear supply chain to a zero waste, fully circular, and ultimately net-zero performing supply chain. This series is designed to help businesses with complex supply chains, including multi-site retail operations, achieve their sustainability goals. In this installment, we explore how resource optimization can be a powerful lever to accelerate the transition to circularity while increasing revenues. 

Navigating Sustainability Challenges 

Advocating for new sustainability initiatives is challenging, especially when competing priorities have more immediate financial impacts. Many sustainability professionals feel they have hit a wall and need help pushing their organizations forward. Budgets are tightening, and projects are prioritized based on short-term returns. 

However, the concept of zero waste offers a compelling, practical, and easily implementable strategy that aligns the entire organization. After all, no one is in favor of more waste. The challenge lies in providing the tools and information that all stakeholders need to make informed decisions about diverting materials from destructive landfill disposal. 

From Waste to Resource 

The goal of zero waste is not just to minimize landfill disposal but also to preserve the value of materials through diversion. This requires rethinking the traditional “waste” paradigm associated with reverse logistics. There does not need to be a trade-off between servicing the retail/consumer sector and optimizing the flow of by-products from supply chain operations. With new operating procedures aligned with a circular mindset, the process can become self-funding or even net-accretive to revenue. 

Practical Examples of Resource Optimization 

Consider the case of plastic (LLDPE) pallet wrap, a necessary material for moving products from suppliers to retailers. The value of a 1,000-pound bale of pallet wrap is determined by its quality and cleanliness. A bale mixed with organic waste or non-film plastics is worth significantly less than a bale of clean, homogenous color film. The value of “A” grade material can be as much as 20 times higher than high-contaminant materials. Specifically, poorly managed plastic wrap can cost 1-2 cents per pound to dispose of, while good, clean wrap can be compensated for at 18 cents per pound. For companies generating millions of pounds of pallet wrap annually, the potential revenue loss from lower-quality bales is substantial. 

Similarly, old, corrugated containerboard (OCC), or cardboard, can be significantly undervalued if not managed properly. Wet cardboard, for instance, is much less valuable than moisture-controlled OCC. The same principles apply to metals, glass, hard plastics, textiles, pallets, and organic materials. 

A material characterization study for a well-known retailer revealed that millions of pounds of landfill waste per year represented an economic loss of approximately $3.5 million annually. This loss included the value of the discarded materials and the cost of landfill disposal and hauling. 

Moving Towards Circularity 

These examples highlight a common issue: many supply chains have been optimized over decades to expedite product shipment with little focus on operational byproducts. While material optimization is not the ultimate goal of a net-zero economy, it provides critical funding to support the transition to a circular supply chain. 

EcoTrax is on a mission to teach our customers how to design a Sustainability Center of Excellence (S-COE) to expedite the transition to a more sustainable future. This Build, Operate, Transfer (BOT) approach ensures that businesses can effectively implement and sustain these changes. 

Looking Ahead 

Next week, we will describe some circular supply chain models that are improving supply chains around the world. Stay tuned as we continue to explore practical strategies for achieving a zero waste, circular, and net-zero performing supply chain. 

About EcoTrax 

EcoTrax is a technology-enabled supply chain solutions company focusing on a mission-critical yet under-resourced area of supply chains – the recyclables, reusables, and waste produced by distribution centers. Our purpose-built platform and team of industry experts deliver solutions that increase the value and sustainability performance of recyclables (pallets, OCC bales, plastics, food waste) while simplifying and modernizing the management of returnable containers (totes, pooled pallets, etc.). We digitally integrate and synchronize all internal stakeholders and external partners and automate workflow through a single platform. This single point of truth reveals real-time, actionable data and insights, reducing environmental impact while improving fiscal performance.