At the heart of the trend towards circular supply chains are measures to reduce waste and increase recycling.
Progress on this front is important, whether on a small scale – as with the solutions adopted by small and medium enterprises – or on a large scale, as with multinationals.
One multinational leading the way on this front is Colgate-Palmolive (CP). With 34,000 employees and total net sales of over US$17.4 billion in 2021, CP is one of the world’s most valuable brands. Its products are sold in 200 countries and territories and include some of the most recognizable household brands: Speed Stick, Palmolive, Ajax and Hill’s Pet Nutrition. Unsurprisingly, its supply chain is colossal.
While CP’s journey to zero emissions is a colossal undertaking, it is nonetheless making remarkable progress, at the heart of which is its commitment to TRUE Zero Waste – a zero waste certification program designed to measure, improve and recognize zero performance. waste. CP is also part of the vanguard of companies forging a more sustainable future.
“We have more TRUE Zero Waste certified facilities than any other company on the planet,” said Mike Corbo, director of supply chain for Colgate-Palmolive. “A total of 18 sites, in total, in 10 countries across five continents – including the first-ever TRUE Zero-Waste certified facilities in Africa, Latin America, Continental Europe, India, China and Vietnam.”
The Colgate Palmolive Zero Waste Commitment
However, this is only the beginning for CP; its ambition is to ensure everything its facilities are Zero Waste by 2025.
“We are aiming for Zero Waste certification for our global operations, including our manufacturing sites, technology centers, strategic offices and warehouses,” says Corbo.
The company has made significant progress in this area, but how CP has managed to make such great strides in reducing waste could hardly be less glamorous.
“You’d be surprised how well we’ve done it,” says Corbo. “It sounds a bit silly, but we pretty much started out doing trash dives – literally rummaging through what we were putting in the waste stream.”
He adds: “We started to separate everything and ask each other questions. Why is this or that not in the product? Why isn’t it recycled? What exactly is our waste stream?
“That’s where you have to start. It takes years, and it takes focus. But the money and resources that we were throwing into materials are no longer thrown away. It’s repurposed, repurposed, or put back into the product.
Sustainable supply chains ‘take time, effort, focus’
The key to reducing waste, he says, is to measure everything: “We measure how much electricity and water we use, and how much waste we produce, and then come up with innovative ways to reduce the consumption.”
He adds, “I am very proud that we have launched a zero waste to landfill initiative at our manufacturing facility. We have had it externally certified and will soon have all 45 factories certified.
The company is also working to make all of its new manufacturing sites LEED certified. LEED stands for Leadership in Energy and Environmental Design and is a global green building certification program.
“We want to make sure these sites are optimized for energy efficiency, water savings and waste minimization from day one,” says Corbo,
While CP is an example for reducing waste on the multinational front, the progress of small businesses is just as important, as is the vast technology ecosystem that helps SMEs achieve their net zero goals.
One such company is OnProcess Technology, which helps organizations make sense of vast fields of data to optimize their aftermarket service supply chains.
Move to Net Zero Changing Linear Supply Chains
It’s the part of the supply chain that helps close the circle of sustainability, where companies provide services around a product – like parts and materials, repair and maintenance – once it’s ready. ‘it’s sold.
Supply chains have always been linear and until recently had a “take, make, use and throw away” mindset.
OnProcess helps clients reinvent this model through its digital platform, Agora, an integrated stack of tools that provides insight and unravels issues.
“When I started in this industry 20 years ago, kit items were made in factories, went through a downstream supply chain, were sold through some sort of retail network, and then ended up in the trash or landfill after being used,” says Oliver Lemanski, CEO of OnProcess.
The circular supply chain acts as an antidote to this. Manufacturers and distributors retrieve products and parts from the field when they are no longer needed and reintegrate them into the value chain, either as raw materials for new products or as new refurbished or remanufactured products.
And, because the service part of sourcing is the point at which products and parts are identified as unnecessary, companies like OnProcess are essential if the circular sourcing model is to gain traction sooner rather than later.
Companies are slow to join the party of digital transformation
But Lemanski says many companies in the service supply chain have been slow to join the digital transformation party.
“A typical service supply chain is a network of disconnected manual processes run by siled departments,” he says. “It desperately needs digitization and automation.”
He adds, “We are giving these companies the ability to reinvent and automate processes on the fly, which dramatically reduces costs, transforms the customer experience, and helps our customers achieve their sustainability goals.
“Sustainability is part of our mission. We help businesses reduce their carbon emissions by making it easy to use local tracking, recycling or disposal offers. We also help reduce the use of Earth’s resources by improving product and parts returns, while promoting greater circularity in their service supply chains.
Often the waste can amount to tens of millions of pounds, dollars or euros and can be difficult to manage effectively. An example of cost-driving waste is from an OnProcess customer who is a leading provider of TV entertainment services via set-top boxes. With subscribers to these services often moving to other providers or deciding they can no longer afford the fees, many boxes become obsolete, which was the case with this company. So how did OnProcess help solve this problem?
“The company’s goal was to help its customers use the boxes, rather than return them, so its record of retrieving the boxes was spotty,” says Lemanski. “But now every customer who goes offline receives a recovery kit that includes a suitable shipping box and a prepaid UPS label.
“As a result, box returns are 95% for voluntary disconnects and 55% for involuntary disconnects, generating $60 million in savings. This is what chain agility and transparency look like supply of field services.