Adopting a closed loop system: recycled plastics in your supply chain
Adopting a Closed-loop System:Recycled Plastics in Your Supply ChainReduce your carbon footprint, maintain quality, and reduce operating costs.Manufacturing companies Today’s consumers have more choices One industry that can benefit aare missing an opportunity than ever before and have become great deal from changing consumer increasingly particular with their preferences and reduced costs ofto decrease their carbon selections. At the retail shelf, many recycled plastic is the manufacturingfootprint while also consumers now make decisions based industry. Manufacturing companiesreducing their operating not only on quality, brand recognition can now mandate changes in theircosts. By teaming with and price, but also on a product’s raw materials choices, and in turn, perceived environmental impact. can increase their supply chainCapgemini Consulting Consumers want products that are effectiveness. Our belief is that newand specific alternative responsibly and sustainably made, alternatives to traditional packagingresin manufacturers, and are remarkably responsive to the – such as cellulosic ethanol basedmanufacturing companies media’s perception of the products plastics – can bring opportunity to they consume. the industry as a whole in the nearcan design and implement future. Some examples of companiesa closed-loop supply chain Historically, the industry perspective has that have committed to the use ofsystem. This process been that although sustainability efforts such technologies include Coca-Cola1,improvement can provide a are important, the cost benefit would Nestlé2, Danone3, Heinz4, Toyota5, not justify the changes in production Ford6, and Proctor and Gamble7, tosignificant portion of cheaper, methodology. However, with industry name a few. However, another strategyrecycled raw materials in advancements in alternative and recycled that is available to fulfill the currentorder to decrease costs, plastics, the cost limitations are suddenly market need is recycled plastics.increase operational moving in the opposite direction. With consumers demanding sustainable goodseffectiveness and decrease and the media backing these preferences,environmental impact. companies can no longer afford to ignore creating environmentally friendly products.
The Opportunity company that generates $5 billion in savings by utilizing quality recycled The future is a closed-loop system revenue per year, this can equate to resins rather than traditional, virgin that allows the waste from the an annual savings of $10-20 million plastic alternatives. end-product to be reintroduced in packaging and resin costs for through recycling into the beginning companies that use PE, PP or PS Capgemini and Retailers/ of the process. By implementing a plastic resins.9 End Users closed-loop system, manufacturing Manufacturers are not the only companies can reduce one of their Capgemini and Manufacturing companies that can directly benefit largest costs — raw materials. To help companies capitalize on from the closed-loop system. Retailers these savings, create further brand and end users also stand to realize Additionally, some virgin plastic loyalty and increase sales, Capgemini significant cost savings by working resin has become more expensive works with manufacturing clients to with Capgemini. Traditionally, these than some recycled plastics. Virgin enhance their operations, discover companies and institutions have had plastic resin is derived primarily cost-saving opportunities and create to pay for their waste to be removed. from oil derivatives and therefore, relationships with their strategic With Capgemini and a closed- fluctuates in price accordingly. recycling partners to implement a loop system, retailers and other Recycled resin offers a product closed-loop supply chain. organizations can now sell their with comparable quality at a price plastic trash to haulers, who then reduction of 10-30% depending With these processes, technological take it to a recycling partner and on the polymer, and additionally advancements, and the right convert what was previously an protects against significant price partnerships, manufacturing expense into a revenue stream. fluctuations.8 For a manufacturing companies can realize significant Capgemini and Recycling Figure 1: Closed Loop Eco-System Billions of pounds of plastics are consumed in the U.S. each year, and a very small percentage is recovered for recycling efforts.10 However, that statistic is changing and more recycled plastics are being developed thanks to the efforts of many recycling companies. One such company, and one of Capgemini’s strategic partners, is NextLife®, a leading provider of sustainable solutions for the consumer packaged goods (CPG) industry. NextLife® produces FDA-approved recycled resins for food grade plastics and other purposes. A recent, independent life cycle analysis on NextLife products showed a 70-80% reduction in carbon footprint on plastic resins purchased from their plants. It is estimated that 10-30% in average Closed-Loop System: savings can be obtained through the Capgemini Consulting manages the relationships involved in analyzing, planning and successfully implementing the above closed-loop system. use of strategically-sourced recycled 1. CPG company sells end product to retailer/vendor/end user resins, in comparison to virgin resin 2. Retailer/vendor/end user collects packaging from its customer/client/patient, accomplished alternatives, when accompanied by through various methodologies speciﬁc to each business case 3. Hauler/waste company collects plastic waste for transport to recycling partner, saving the right partnership.11 The company, retailer/vendor money on disposal costs currently led by the former CEO of the 4. Recycling partner goes through proprietary processes to develop FDA-approved recycled plastic resins that are sold back to CPG company to produce end product world’s largest plastic cup manufacturer, supplies its recycled resins to some3
of the largest plastic producers in the country’s largest waste management Environmental Footprintworld, including Styrolution and other companies and haulers are poised to Assessment (EFA)industry leaders. improve their environmental impact. Capgemini is prepared to assist CPG, Capgemini utilizes patentedCapgemini provides the strategic manufacturing organizations andrelationships and detailed execution industry leaders in taking the first approaches to calculate ato bring together manufacturing step to savings and sustainability. company’s environmentalcompanies with both their downstream footprint assessments.and upstream partners, helping to Capgemini Consulting is a global The results are intendedbenefit all parties involved, while leader in helping businessesreducing environmental impact. develop strategies to improve to enable manufacturingCapgemini can help establish a closed- operational effectiveness. companies to target areasloop system by linking major CPG or for change, as well asmanufacturing companies with their Capgemini provides the support to guidelargest retailers/distribution centers, and to understand internal every step of the closed-loop system andenabling them to purchase back the recommends a three-tier approach to environmental perspectivesrecycled plastics that they originally sold collaborating with clients in addressing and priorities, allowingto their consumer base via a third-party the sustainability opportunity: the organization to gainrecycled plastic resins manufacturer. n Opportunity AssessmentClosed-loop systems now make n Roadmap Development and a comprehensive look atfinancial as well as environmental sense. Organizational Alignment its carbon usage across n Implementation and Monitoring specific products, or itsBy incorporating a patented process, whole supply chain.strategic relationships, and ultimately Closed-loopa closed-loop system, recycled plastic Opportunity Assessment –resins are now a viable option for the Capgemini’s ApproachCPG and manufacturing community For manufacturing companies thatin a variety of diverse environments. seek to venture beyond understandingThere are also opportunities in the their current sustainability profilehealthcare, government/education and make a lasting organizationaland automotive industries as well change, Capgemini provides the toolsas major food and distribution and support to develop a strategy thatcompanies. In addition, some of the not only can reduce environmental Phase 1 Phase 2 Phase 3 Closed-loop Opportunity Roadmap Development and Implementation and Assessment Organizational Alignment Monitoring First, Capgemini conducts an assessment Once the closed-loop opportunity has In Phase 3, Capgemini is directly of the company’s supply chain, as well as shown sufﬁciently attractive, Capgemini involved in launching and overseeing the an Environmental Footprint Assessment. works with the client to develop an closed-loop program detailed in the After all the data has been reviewed, actionable, cross-functional, roadmap. Capgemini also monitors the Capgemini provides a detailed analysis cross-partner roadmap, and generates initiative and recommends adjustments of the company’s operations compared organizational buy-in for improved as necessary to promote the effective to leading-practice benchmarks. Finally, sustainability. Capgemini employs a capture of expected value. a robust business case is developed to unique accelerator called the create a complete picture of the Accelerated Solutions Environment organization’s closed-loop opportunity. (ASE) to help realize these objectives. Many of Capgemini’s successful client projects have leveraged the ASE for cross-organization blueprinting and organizational alignment in major transformation programs. Adopting a Closed-loop System: Recycled Plastics in Your Supply Chain 4