Its still difficult to have a closed loop into the future

It's still difficult to have a closed loop into the future

The concept of closed loop supply chains sounds a laudable ideal: a virtuous circle of production from cradle - not to grave - but back to cradle again.

Right now, no company comes near to claiming that its whole production process not only produces zero waste, but operates within a cycle of perpetual sustainability.

While Dr Anne Bonhoff, global head of chemistry for US-based certification agency UL's environment division, describes a closed loop as where "a complete supply chain is in the loop, under control from the beginning to the end," she recognises this remains some way off.

"You can try as much as possible to recycle and recycle but there comes a point where some materials will be wasted," she says. "Most materials can be recycled, or at least you can try to, but it's difficult to have a closed loop into the future. It's nice; it's a goal, but we're not there yet."

Dr Bonhoff points to plastic materials as an example of the problems. "You can recycle plastic, but each time you do so, they are not getting purer. They often contain impurities and you need to clean them. You also don't have the same quality of recycled material."

Dr Christina Wong, associate professor at the Hong Kong Polytechnic University's Institute of Textiles & Clothing, identifies other challenges. "The major challenges are the cost of textiles recycling; the willingness of customers in returning their old clothes; convenience and free-of-charge of textile disposal; the lack of incentive of returning their old clothes; and the problem of fast and cheap fashion with a short life span."

"A circular economy is the ultimate, golden goal," adds Rob Drake-Knight, founder of UK-based eco-friendly clothing brand Rapanui, whose company offers customers a 30% voucher on future purchases if they return an end-of-life item. "It's the answer to a lot of problems that we are going to have in the future if we continue to work in a linear-based economy. But it is incredibly challenging, as it will involve people changing a lot in the way they think about things."

Annual advances
Even so, the past year has seen some advances. This May, UL's environment division launched a recycling claim validation process. This provides one of the first global frameworks for evaluating and validating recycled content claims in manufactured products. These claims typically consist of the manufacturer indicating either an average percentage or minimum percentage of content that is recycled and reused. This procedure identifies and addresses all materials included as part of the product.

"We are entering a phase where manufacturers are beginning to think about the full life cycle of their products," said Scot Case, director of markets development at UL's environment division. "Some companies are beginning to realise that the best source of raw materials is their old products."

Several companies are looking at ways to at least tighten their production cycle. Over the past year US-based The North Face has continued to refine its pilot clothing take-back/recycling programme 'Clothes the Loop,' whereby customers drop off used clothing, hats and footwear from any brand in any condition.

Initially piloted at 10 retail locations, this has been expanded to 27 North Face stores across America. By 2015, the company aims to use 30% of its material from recycled content - up from 7% in 2011. It has made advances using measures such as reducing the synthetic compounds in the membrane of its Venture product line by 50% by incorporating more environment-friendly castor oil.

Meanwhile, Dr Wong's own university launched an upcycling project in January with upscale boutique Joyce, in which fashion students from the university were tasked with designing a complete look and outfit using only Joyce's merchandise from past seasons.

Successful shift
Drake-Knight believes that if closed loops are to succeed, they will require a shift in the concept of ownership. For instance, "if you look at a high-priced item such as a jacket that costs GBP200 (US$336.74), you could rent or lease that at a lower cost and return it to the company when you're done with it. You have to make sure the closed loop is affordable. That could work with items such as skiing or sailing kits - stuff that is used intermittently and not worn next to the skin."

Case acknowledges that closed loops are in many respects in their infancy, but feels that should not lay companies open to criticism for pursuing them. "These systems are narrow in their focus but they are the fundamental building blocks for much larger closed loop systems," he says. "In the future, rather than closed loops being specific to one company, I see the potential for several companies to buy into the same system."

He feels that companies now realise sustainability saves them money in the long term and that closed loops underpin this.

"It's about companies not just thinking about short-term profits but the long-term survival of their company and of world resources," he says, noting that if a major industrial accident is "connected to your brand, then it is very damaging, it can destroy your company. Or it could cut off a supply of your materials."

In contrast, "closed loops put you in control of the chain, they are less risky from a business perspective," he says.

Click on the following links to read other articles in this management briefing.