How to build a reverse supply chain from scratch, for problem plastics or anything else
Multi-layered plastics have the lowest recycling rates of any and are the most impactful to the environment. However they do provide an important function in packaging food and are not easily replaceable. There are limited applications for the re-use of ‘Problem Plastics’: energy, construction. For example, the Center for Regenerative Design and Collaboration (CRDC) South Africa designed the Resin8 concrete from mixed plastics in 2020.
While post-industrial soft plastic waste may be relatively easily located, recovered and directed for manufacturing, it is the post-consumer, single-use soft plastic waste that is causing the most impact in the environment. These plastics do not have a clear value chain in the market making them difficult to collect (post consumer) and recycle. Setting up a scalable reverse value chain for problem plastics can take years, with manufacturers having to motivate collection, identify value chain players, and scale aggregation.
With the advent of new technologies such as pyrolysis, or the incorporation of packaging new applications such as construction materials , these plastics present a new opportunity for consumer goods manufacturers to close the gap and generate value. A substantial steady stream of these plastics being recycled and re-utilized sustainably would mean -
- Consumer goods manufacturers would not have to give up the benefits of using soft plastics for food packaging
- There would not have to be any undue investment in redesigning alternative packaging
- This could be an opportunity to provide consumers with a ‘feel-good’ engagement with the brand, improving brand value
How can a consumer goods organization run a circular economy program that ensures a steady stream of the most ‘problematic’ materials it produces are safely returned for valuable re-use?
The food-brand itself can offer a lot of leverage in building this supply chain. This is because its packaging is recognizable from a distance, separable, familiar, likeable and once a use is established it is reusable. But it would takes a lot more than recognition to extract lost materials from the ‘post-consumer’ abyss.
Reclaimers, schools, suburbs, townships, business parks, each represent distinctly different communities. They have been typically engaging with your food-brand across the shop counter and a little recently over the computer or phone screen, usually with the idea of consumption, but sometimes even status or delight. The same food-brand could be a reason for a rather long tail of engagement over the phone or the computer, with the idea of ‘do-good’. For a reclaimer it can be reason for engagement with the idea of ‘making a living’. Once this reason for engagement is established, it would be possible to motivate collection of food packaging, especially problem plastics at scale. One would need to engage with these diverse communities with different accesses to phones or the internet in an obvious manner, inform where to conveniently bring the material or how to receive their rewards. One would need to set different expectations for different communities to direct the reverse flow of material. For consumers for example to bring the materials back to the stores or for reclaimers to bring them back to aggregators. All of this should be happening autonomously and automatically.
Countries in Southern Africa, South & East Asia, South America are blessed with thousands of dedicated partners to run a reverse supply chain. In fact in South Africa over 1000 small and medium businesses as well as over 100 000 micro enterprises in the form of recyclers and reclaimers, bring back 90% of the aluminium, paper, glass and plastics that gets recycled. Despite the lack of recognition or resources this reverse supply chain has been functioning very well for several years. For a new stream of material such as problem plastics however, one would need to discover and validate reliable reverse-suppliers, set up several supply chain contracts scalably, monitor the fulfillment of these contracts, set goals and incentives for performance to accelerate the supply at times.
Human beings understand numbers. We like to measure everything in numbers, whether it is our influence, affluence or our health. Numbers make a good game as well. Smart recycling centers will give points to their participants for the ‘right behavior’. The ‘Right Behavior’ should change according to context. Participants will earn more points for more participation. Points could be redeemed for rewards. Rewards can be won during business as usual or on special occasions. Either way, instead of diluting pricing, point-based-rewards are a proven way to attract the masses.
As communities engage with a food brand in the reverse supply chain there is an opportunity to build a map of the ‘journey of your package’. While the brand may know how the package went from the factory to the store to the bin, a truly circular brand would know how the package came back from the bin to the store to the factory, what happened to the package, what it got turned into, how it got re-used to improve something else. Through this chain however, it would be important for the brand to have evidence with the data.
Each act of recovery of a material is a micro-job, whether done voluntarily or for rewards. One would need to provide communities of suppliers with instant proof-of-work. These can be handwritten slips to purchase orders issued over SMS or whatsapp . A branded document stating exact details of delivery, amounts owed, payment terms, date & time of delivery and a fixed supplier ID, gives a great deal of reliability to the supplier. However, in doing so, having electricity at your recycling facility, a PC to run your Point of Sale software, a slip-printer and paper for the printer means you are spending more time and money managing your computer equipment supplier than your materials suppliers.
Communities prefer easy access to the rewards they earn for their work. However a bank account is not necessarily within reach due to documentation requirements or due to banking charges. If the reclaimer can receive his remuneration in a form that is not cash, but provides immediate access to food or airtime, he would use such a medium. This is where emerging mobile payments solutions can help. However, adoption of this method of payment takes time and should not be done on its own. It should be done along with other value adds that increase the odds of changing behaviour.
We know that we like products for the brand we see. Not necessarily for the quality of the product. Once quality is within a certain broad range of Great, Good, Average or Poor, people go for the brands they like. They do so due to emotional and irrational reasons rather than logical reasons. This is why brand building is a critical competitive advantage and a defense against price disadvantages. Your Brand needs to stand for a purpose that your customers subscribe to by lleverage your national brand locally within the community. And indeed your end-user can be your supplier.
Kudoti is building the circular economy through more profitable waste supply chains. Our work in the CE extends easily to sustainability. Kudoti works across multiple stakeholders to build an entirely digital circular economy through the following activities:
- Sponsoring of ecosystem partners
- Tracking and tracing of materials
- Trading of materials
- Setting up and disbursement of rewards and incentives
We also understand that one size does not fit all. Our platform is modular and API based. Which means that the workflows can be embedded into existing systems or consumer applications. It also means that the workflows can be customized to meet the designed circular supply chain.
If this paper has raised your curiosity about us, feel free to connect with us: Contact Prasenjit Sinha at Prasenjit@kudoti.com or Gift Lubele at Gift@kudoti.com.