An unexpected link between resilient supply chains and consumer demand is a huge opportunity for entrepreneurs.
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The pandemic exposed the fragility of the global system designed to get the right product to the right place at the right time. When faced with resource shortages, product scarcity, and limited traceability, the supply chain became susceptible to counterfeit goods, compromised quality, and delays in distribution. Never before has the consumer been so aware of the impact the supply chain has on their lives.
In response, companies are trying to build more resilience into the supply chain and the effort has revealed an unexpected connection with sustainability. As a recent GS1 US whitepaper points out, a more circular economy will be more resilient. At the same time, consumers have a growing appetite for greener, more sustainable products, so the future of supply chains must also be circular to build consumer loyalty and back up brand promises such as “made from recycled materials.”
Supply chains today follow a line from the extraction of raw materials through production and use to disposal, often in a landfill. Circular supply chains disrupt this “take, make, waste” pattern. They dramatically reduce waste and help turn the remaining waste streams into value streams that feed further production.
The circular economy is a multi-trillion dollar opportunity for businesses of all sizes, and many entrepreneurs are working to build more sustainable supply chain practices into the heart of future business models. Let’s examine some examples with the potential to disrupt several industries. Each company leverages global data standards, which are critical to enable the consistency and interoperability needed in a world undergoing rapid digitalization, as well as ideological and behavioral shifts.
Image credit: GS1 US
Hacking produce to increase supply chain visibility
An estimated 30-40 percent of all food is wasted in the United States and 40 percent of produce is wasted before it ever reaches consumers. This fact was simply unacceptable to the founders of Strella Biotech. They created technology to essentially “hack fruit.” With sensors, IoT networks and data analysis, Strella’s solution can identify maturing fruit in cold packer rooms based on the gases that the produce emits as it changes quality. This arms packers with intelligence to distribute the most mature fruit to the supply chain first, saving significantly on food waste. The company is also exploring downstream applications in retail and import/export inventory management.
Tracking products in the food industry is a huge challenge because raw materials and products lose their identities when they are processed or taken out of their packages by consumers. The proposed Food Safety Modernization Act (FSMA) section 204 food traceability rule from the U.S. Food & Drug Administration (FDA) is spurring demand for technologies that address this traceability “pain point.” Aanika Biosciences leverages the well-recognized system of product identification based on GS1 Standards to biologically tag or microscopically “barcode” food. This makes it possible to trace food all the way back to the farm, despite temperature changes, washing processes and other transformational events.
Related: 5 Reasons You Need to Adopt a Circular Economy Business Model
Solving recycling to address the shrinking supply of virgin materials
Most Americans recycle bottles they use every day. However, less than 10 percent of plastic is recycled in the United States because the industry still struggles with sorting plastics. Shrink sleeve and pressure-sensitive labels are often the culprits: they cannot be separated from the plastic bottles they cover, making them impossible to process. Magnomer is a startup that believes magnetizable ink can fix this problem. Their technology uses magnets that already exist in many recycling plants to remove labels that often prevent recycling.
MeCycle is also aiming to improve the U.S. recycling rate. A consumer can scan the UPC barcode of plastic, aluminum or glass containers using the MeCyle app, which shows them how much carbon and waste they are reducing and returns incentives such as bottle deposits that are available in their area. MeCycle is beginning to offer its service within select markets of New York State, so consumers can return bottles and cans to ensure they get reborn into new beverage containers or other useful items.
Rethinking fashion to reduce waste
In addition to food, bottles, and cans, textiles are wasted at a staggering rate. A whopping 14.5 million tons of textiles were sent to landfills or incinerated in 2018, which is equivalent to 85% of the textiles produced that year in the U.S. alone.
A growing base of entrepreneurs are driving experimentation in the apparel industry to reduce this unsustainable amount of waste and make fashion greener. OtailO, for example, enables a “click-to-brick” returns management solution with smart and optimal returns routing for retail brands. Leveraging the GS1 system of standards for identifying products and locations, this solution enables shoppers to buy anywhere and return anywhere. OtailO technology makes brick-and-mortar locations a network of return and resell centers, which cuts down on textile waste, and means far less transportation and packaging associated with the traditional returns process.
Related: 4 Key Trends for Retail Entrepreneurs in 2021
These entrepreneurs recognize the opportunities associated with the growing consumer demand for sustainability. Their visions lead to a more circular economy, where products, assets, and infrastructure will be more productive as they are kept in use longer and reduce stress on supply streams. Future circular supply chains will transform today’s vulnerabilities into tomorrow’s opportunities.