COLLEGE PARK, MD: According to a new whitepaper, the reuse supply chain is an overlooked opportunity for the logistics industry to increase value and revenue.
Author Lisa Harrington, associate director of the Supply Chain Management Center at the University of Maryland Robert H. Smith School of Business, says a new closed loop supply chain can reduce carbon and deliver significant cost savings.
Harrington argues that some businesses no longer perceive sustainability as a cost, but recognize it as an opportunity to create value – and cites P&G and its near-US$1billion in cost savings as an example.
"The recipe for success is to get the four principles right. These are reduce, reuse, recycle and recapture. Reduction is all about eliminating waste by injecting efficiency, reusing involves product refurbishment, while recycling is ensuring that your waste becomes opportunity. Recapturing is the process of breaking down end-of-life products to harvest residual value such as precious metals."
Harrington says the principles require a "Lead Environmental Partner"(LEP) to fulfil a control tower role, a closed loop supply chain management approach, and provide the customer management visibility through detailed carbon reporting.
"A great shift in attitudes is currently underway across industries. Gone are the old and dated misconceptions that 'green' means higher costs." She claims companies are creating new value by modifying their supply chains to manage their key inputs and outputs such as energy, carbon, water, materials and waste in a way that can reduce the environmental footprint of a business and generate new sources of revenue from residual value.
Chris Jackson, vice president Envirosolutions for DHL Supply Chain and sponsor of the paper adds: "LEPs help make the cost savings even greater with their ability to act as a single vendor for a company's waste management, ensuring the best recyclable rates are achieved and the process is simplified as much as possible.
"For example, the integrated partner approach is now at the forefront of waste management with companies receiving their shipments and having their recyclable waste collected by the same vehicle. Having a partner that can fulfil this role saves companies hundreds of thousands in land fill tax savings and reduces carbon emissions significantly as well," he says.