Circular Economy, Supply Chains and Landfills

Has the pandemic impacted your ability to secure raw materials? Are you looking for opportunities to keep products and materials in use?

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world.

Per the Ellen MacCarthur Foundation, a circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.

Supply Chain managers globally have felt the impacts of the pandemic and disruptions to raw materials. Gartner recently shared, “The global pandemic adversely impacted raw materials availability, pricing and the ability to get products to market. Complex globalized supply chains remain fragile in the face of global disruptions. This challenges chief supply chain officers (CSCOs) to look for opportunities to improve raw materials availability and reduce uncertainty.”

Gartner further recommends supply chain leaders move away from the traditional linear consumption-based model to a circular economy strategy. “The move to a circular economy is the right move because it decouples material consumption from financial growth,” said Watt. “The circular economy also has the potential to provide a new avenue of raw materials through end-of-life reprocessing.”

The Gartner 2020 Opportunities After Crisis Survey found that 51% of supply chain professionals expect their focus on circular economy strategies to increase over the next two years. Below are suggestions on how to leverage reprocessing and recycling strategies.

  1. Commit to the circular economy. Develop a long-term vision. Profile and pilot products that may be suitable candidates for raw materials refurbishment, parts harvesting or recycling.
  2. Engage with customers. Identify opportunities to retain control of materials by shifting to a product-as-a-service arrangement, such as leasing. When relying only on customer goodwill for product returns, make the returns process as easy as possible.
  3. Scale through collaboration. Select and build an ecosystem of partners to enable access to and processing of end-of-life materials. Partnerships must be built on joint value creation and shared rewards. Start by collaborating with waste contractors to access end-of-life materials, reverse logistics providers to centralize these materials and raw materials suppliers to identify the best reprocessing routes.
  4. Move beyond residual materials value. You’ll need to balance and make trade-offs among residual material value, raw material price volatility, customer sentiment, and global and local regulation. Update these assessments periodically as the business landscape changes.
  5. Participate in the design process. Supply chains must get involved earlier and more deeply in product design. Criteria for materials selection must include potential for end-of-life reprocessing and end-of-life environmental impacts.
  6. Check the balance sheet. Assess the impact of moving toward a circular economy on the company’s metrics. Holding materials for reprocessing may have a negative impact on working capital, but a positive one on raw materials security.

Keeping products in use keeps them out of landfills. One such example is the #WearNext collaboration project in New York that has collected over 1.2 million pounds of clothing likely headed for landfills. New York City landfills a staggering amount of clothing every year equal to about 200 million pounds at a significant cost to residents of $300 million. In 2019, New York City joined forces with the Ellen MacArthur Foundation’s Make Fashion Circular initiative to launch #WearNext and developed a map of 1,100 clothing collection points across the city, allowing New Yorkers to easily find their local drop-off point.

As the world works through the impacts of the pandemic, supply chain managers play a key role in helping keep materials and products in use and developing circular economy strategies that are smart for business and the environment.


Looking for more information on the circular economy? Join us on January 20th, 2021 to hear from Chuck Nemer, CPIM, CLTD, trainer and consultant with over 40 years experience in Supply Chain management! Learn more...

Logistic Challenges Delivering Vaccines

Supply chain expert skills will be put to the test supporting the logistics, transportation, and delivery of the new COVID-19 vaccines.  

APICS Milwaukee Chapter serves the supply chain community with the education and information needed to compete in today’s world.

SupplyChainDive recently shared about the challenges of maintaining very cold temperatures throughout the delivery of the new COVID-19 vaccines door to door. "We refer to this as the biggest product launch in the history of mankind," said Neel Jones Shah, Flexport's head of airfreight, referring to coronavirus vaccines. "This is the top end of complexity of anything we've ever done before."

Not only are the cold temperatures required a challenge, for example, Pfizer’s product must be transported and stored at minus 70 degrees Celsius, but also the quantity.

According to The Wall Street Journal, the United States has ordered 100 million doses, with the option to purchase 500 million more; the European Union ordered 200 million, with an option for another 100 million; and Japan ordered 120 million. The United Kingdom and countries in South America and the Asia-Pacific have also placed significant orders.

David Goldberg, CEO of DHL Global Forwarding USA stated, "The colder the storage requirement, the more complicated the logistics." Pfizer designed its own packaging, which will use dry ice to maintain storage without needing specialized appliances. Although there are challenges on this front as well, because there are current shortages in the U.S. of dry ice due to decreases in ethanol production where dry ice is a byproduct and it can’t be stockpiled because it evaporates.

Companies are once again coming together to help solve COVID-19 era challenges. UPS announced recently it is expanding dry ice production capacity to 1,200 pounds per hour in the U.S. and Canada.

Vaccines in a 2-8 degree Celsius temperature range, like Moderna’s and AstraZeneca’s, don’t need dry ice. The vials may be sent in a temperature-controlled container that holds a battery charge and keeps the contents at a consistent temperature. The containers are not new for the COVID-19 vaccine and are already used to move other vaccines and temperature-sensitive products. However, with a greater number of vaccines to transport, more containers may be needed at any one time.

Each step in the process will require companies to step up and work together to ensure a cold chain is maintained from airfreight, ocean freight, warehouse, last mile, etc. UPS for example is building freezer farms near air hubs in the U.S. and the Netherlands, adding 600 freezers that can hold 48,000 vaccine vials at minus 80 degrees Celsius. DHL Global Forwarding opened a 20,000-square-foot life sciences and healthcare logistics cold chain facility in Indianapolis, with three temperature-controlled chambers, the lowest at minus 20 degrees Celsius. Goldberg said DHL has four other cold chain facilities in the U.S. Others are working on assisting in the effort.

Once again, the importance of supply chain management is in the spotlight during this pandemic and companies are working together to provide solutions that should help us get to recovery.


Looking for more information to improve you supply chain management logistics, distribution and tranportation efforts? APICS Milwaukee has just launched new expert-led instructor classes for globally recognized supply chain certification Certified Logistics, Transportation and Distribution (CLTD). Learn more…

Shifts in Supply Chain Strategies Due to Pandemic

Are you moving to create more visibility in your supply chain? Have you shifted suppliers away from China? Are you adopting new technologies?

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world. Materials, Handling and Logistics recently shared three fundamental shifts in supply chain strategies based on recent surveys due to the pandemic. We’ve summarized them for you below.

  1. A Push for Supply Chain Visibility and Transparency

Manufacturing executives are taking prudent steps to manage risk in their supply chains, with strengthening relationships and increasing transparency with suppliers and buyers as the top strategy identified by survey respondents. Per the surveys, 92% are taking at least some action to create more visibility within their supply chains, including requiring more information on suppliers’ own risk management and continuity strategies.

  1. Rethinking China

The Foley reports also analyze the extent to which COVID-19 has accelerated the movement of production and sourcing away from China. Of the survey respondents who have operated in the country, 59% have either already withdrawn operations, are in the process of doing so, or are considering it.

“Companies that previously diversified their international supply chains in response to the U.S.-China trade war were better positioned to mitigate the effects of the pandemic,” said Kate Wegrzyn, co-chair of Foley’s Coronavirus Task Force and the firm’s Supply Chain Team. “That said, companies may also benefit from retaining certain processes in China while relocating others in a strategic manner that disperses risks of disruption.”

According to the survey findings, the result of this analysis has increasingly led companies to move (or consider moving) supply chains closer to home: to the U.S. (74%), Mexico (47%), and/or Canada (24%).

  1. Technology and Supply Chain Innovation

The COVID-19 pandemic is also speeding up the adoption of new technologies and innovative business processes that improve supply chain efficiency and resilience.

The Accelerating Trends report identifies eight specific areas that are expected to see greater investments and provides guidance on how they stack up against each other in terms of resilience, cost, and maturity. In addition, survey respondents identified the top technologies they are considering as new tools or applications that improve supply chain visibility and tracking (47%) and operational analytics to better track business metrics and indicators (39%).

Overall, these are certainly transformative shifts from historical focus on low costs and lean inventory and will help supply chains become more resilient in the future.

Looking for more information on improving your supply chain management strategy? APICS Milwaukee has just launched new expert-led instructor classes for globally recognized supply chain certifications including: Certification Production and Inventory Management (CPIM), Certified Supply Chain Professional (CSCP), Certified Logistics, Transportation and Distribution (CLTD) and Demand Driven Planner Certification. Learn more…

Four Strategies for Virtual Procurement

Has the pandemic forced you to shift to working with your suppliers virtually?

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world. We share below strategies to work with your suppliers in the virtual world.

Although many supply chain managers historically conducted some of their business in a remote fashion, the pandemic has significantly increased the need for strategies to be effective in 100% virtual environments. Recently, SupplyChainDive shared four such strategies summarized below for leveraging virtual tools within the procurement process.

  1. Video calls: Pretty much everyone has become increasingly comfortable chatting on camera in a variety of locations and faux backgrounds, even with pets and kids entering the field of view. These days, a standard telephone call might even be considered impersonal. With two clicks, we are now face to face, and that makes for a more personal relationship. It is also easy to add others to the call, such as planners, expeditors and customer service reps.

  2. Virtual plant tours: These days, you can virtually tour almost any manufacturing facility or distribution center via video to feel more confident in buying from a supplier you can’t visit in person. You can often tailor the tour to include areas important to you and your team. Virtual supplier visits, if done properly, save time and money for the buyer and supplier.

  3. Digital problem solving: "Can you send me a picture?" The cameras in our pockets potentially offer the greatest opportunity to solve problems and communicate with suppliers in a real time environment. While the increased use of digital imagery predated the pandemic, its use has expanded. A video call between engineers and operations, with a defective part as the guest of honor, will collapse time and distance, save money, and create immediacy in improving product quality.

  4. Not-so virtual negotiations: A well-organized buyer, with clear requirements, responsive suppliers and access to a standard suite of digital tools can negotiate effectively, efficiently, and virtually. Many already do. Few negotiations with suppliers are done face to face. Ordinary requests for quotation can still be forwarded by the traditional methods of telephone, email, spreadsheet or through online platforms. The use of virtual tools creates deeper relationships that improve the negotiation process.

Although we do expect there to be days ahead when buyers and suppliers can meet in person, the shift to virtual tools will likely remain a significant factor in many relationships beyond the pandemic. Embracing strategies such as the ones above will help you remain competitive in today’s ever changing world.  

Looking for more information on improving your supply chain management efforts? APICS Milwaukee has just launched new expert-led instructor classes for globally recognized supply chain certifications including: Certification Production and Inventory Management (CPIM), Certified Supply Chain Professional (CSCP), Certified Logistics, Transportation and Distribution (CLTD) and Demand Driven Planner Certification. Learn more…


 

Supply Chain Bottlenecks and Automation

Has your supply chain been impacted by bottlenecks during the pandemic in 2020?

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world. We share below how one industry is combatting future bottlenecks with automation.

We remember how the reduction of meat processing capacity caused by plant closures and slowdowns due to the pandemic, some right here in Wisconsin, created a massive bottleneck in the nation’s meat supply chain earlier this year. Nearly two dozen plants that process beef and pork products closed in April due to the COVID-19 outbreak, while many others had to slow their production as a result of the pandemic.

Even with the federal government declaring food processing “critical infrastructure” citing the Defense Production Act of 1950, worker illnesses and deaths led to industry giants such as Cargill, Smithfield Foods, Tyson and JBS USA that dominate the supply chain sending less meat to supermarket chains. Images of empty shelves made the news.

The lack of meat processing became a critical bottleneck within the supply chain. One solution many meat companies are now turning to, that is common to manufacturers in general, is automation.  Per Supply Chain Dive and as shared below, Tyson Foods is one of many meat companies ramping up its automation strategy as the pandemic has emphasized safety concerns among its workforce. 

Although automating meat factories is costly, the pandemic accelerated many companies’ automation plans. Engineering Director, Marty Linn shared about Tyson’s Automation center, “Really one of the keys for us being successful at doing automation is being able to fully test, fully vet the automation in the environment, and the type of conditions that we're going to subject it to. . . We can bring product in here as we need to process it. It really gives us an advantage to be able to use some of the advanced technologies, try those out in the environment without having to take it to the plant."

Having a facility dedicated to automation also helped Tyson adjust to the needs during the pandemic. In one room at the robotics center is an infrared scanner that can be found at Tyson plants across the country. As meat companies raced to find ways to keep its workforce safe while the coronavirus spread, Tyson set up a testing facility at the automation center to evaluate what technology was needed and the best system to get accurate temperatures of workers. Afterward, Tyson installed infrared body temperature scanners at all of its plants.

Walking around the center are Tyson workers who are training and getting hands-on interaction with robotics. Employees can come to the automation center and learn about the developments and how to operate them. Doug Foreman, another Tyson engineering director stated, "There's a bit of a fear factor with robotics as you start to introduce those into facilities. And so anything we can do to try and get some familiarity to that comfort level with our team members, and dealing with robotics, and not being concerned about those things, and being confident in their ability to deal with those systems in our plant is a big part of getting started in this type of automation."

There are still limitations to automation. Foreman said it takes "a lot of trial and error" in developing robotics. But the engineers said they are looking to implement tools that help workers do their jobs more efficiently. "Let people do the more value-added type of activities in our process," Foreman said. "Use robotics to do those difficult, dull and highly repetitive tasks. The robot can do that all day long and without fatigue or get distracted or have trouble getting through that process."

Investing in automation can be expensive. Tyson for example has invested at least $500 million in technology and automation in the past three years and elevated leadership with experience in this area.  Likely this investment will payoff for them as our country continues to feel impacts from the pandemic.

Resolving bottlenecks in your supply chain is critical to remain competitive and deliver in uncertain times.  Looking for more ideas on how to improve your supply chain management? Join us on December 10th to hear from Dr. Charlene Yauch, the Associate Director for the Center for Quick Response Manufacturing (QRM) and a Professor of Practice in Industrial & Systems Engineering at UW – Madison. Register today: https://apicsmilw.org/meet-reg1.php?id=592.