This article is sponsored by 3E.
Circularity requires product knowledge to fulfill the maintenance, reuse, remanufacturing, and recycling standards of a circular economy, for both the quality and health of manufactured products long-term.
The team of sustainability experts at 3E, formerly Toxnot, have observed in working with global suppliers that perhaps the most evident barrier to broad material transparency goals for companies is the status quo set by long-established supply chains. We took a closer look at the obstacles to collecting supply chain data and the idea of Extended Material Responsibility in supply chains.
Data collection isn’t easy
3E’s conversation around circularity is a candid one and we aim to approach supply chain data collection in the same way. The complex supply chains that make our way of life possible can double as the barrier to entry into the circular economy. Products with short and tightly integrated supply chains are the exception rather than the rule. In most cases, suppliers have suppliers, and those suppliers have suppliers, and the pattern repeats.
Additionally, full material disclosure (FMD) data necessary for circularity requirements can be challenging to obtain no matter how few suppliers you are engaging with. Reaching FMD requires a complete bill of materials (BOM) from suppliers, as well as any specific end-of-life data. Many product and sustainability teams feel overwhelmed by the magnitude of their supply chains, and there are no instruction manuals for collecting material transparency data for circularity goals.
Executing the crucial material transparency step is especially tricky because it relies on the cooperation of suppliers. There are many reasons why suppliers might not provide manufacturers with data. The approaches to dealing with those challenges can vary, such as:
Corporate bureaucracy and legal teams
These two components of large supply chain actors are a large part of the status quo. Large supplier companies commonly embrace data secrecy to protect their formulations and are often slow-moving. With seemingly infinite resources, large suppliers tend to make the rules, so it can be hard to get material data from them. While this is perhaps the hardest issue to tackle in circularity, it is also the ripest for change and collaboration. Manufacturers can work to overcome such barriers by unifying their supplier data requests and being more transparent with suppliers about their circularity goals.
Unified supply chain requests, providing visibility of benefits across the supply chain, and even regulation are ways that individual manufacturers can participate in or support overcoming this barrier.
The traditional exchange of supply chain data between manufacturers and their downstream suppliers has historically consisted of a lot of emails. In the past, companies have relied on email for exchanging their highly sensitive BOM data. It is becoming more standard to use secure platforms, such as Toxnot, to survey for and collect this information, but challenges remain. Suppliers have lagged behind their manufacturing counterparts in adopting software to share data. Increasing the use of universal requests on a shared platform across manufacturers can help to bridge this disconnect. In short, keep asking for data in the platforms you use; sooner or later suppliers will need to follow, especially once they understand how they can benefit as well.
A gap in technical understanding
Due to the complexity of supply chains, your data requests may not always reach the right people at the right organizations, and this can be time-consuming. For instance, a textile manufacturer may survey its yarn supplier for FMD data, yet only receives back data of one singular part of the total composition, such as cotton. The dyes in the yarn are missing and the yarn supplier isn’t sure what other details you’re asking for or where to get them. To get the complete breakdown of that dye formulation, you may need to speak to someone else in the company or reach more deeply into the supply chain altogether. Improving the communication process of data requests helps establish expectations for manufacturers’ material transparency and enforce requirements for suppliers.
Worth the effort
Despite the challenges, supply chain data collection is possible and essential in the path toward circularity. Erem, a new outdoor desert footwear company, is the perfect example. From its inception, Erem sought to embody circularity. It scouted suppliers to provide materials that would not only support the ability to repair and reuse Erem’s boots but who also would provide the supply chain data needed ensure that materials could return to nature at the end of the boots’ lives. Erem surveyed its suppliers using the Toxnot platform, and received data back that enables it to produce the boots that reflect its circular intentions.
Extended material responsibility
A term that we’ve coined at 3E is extended material responsibility, the idea that all actors in a supply chain carry some responsibility for the products and materials they create, especially suppliers at the last point of known material composition. When it comes to the difficulties of supply chain outreach and the failure of suppliers to provide FMD, extended material responsibility is key. Suppliers can withhold materials transparency data so long as they are willing to take materials back and close the loop themselves. Without material composition, there is a critical block in the circular model, so accountability must be passed down the supply chain as needed. This is yet another reason for suppliers to actively participate in transparency efforts to save themselves time, money and effort long-term.
In addition to manufacturers holding their supply chain partners accountable for their product’s circularity, this idea of extended material responsibility reaches beyond end-of-life and recycling efforts into the creation of products. Adoption and enforcement of extended material responsibility will encourage accountability at all levels of the supply chain, aiding the efforts toward circularity.
The elephant in the room
It’s no secret that a significant challenge of bringing circularity to life is the viability of take-back programs. Full materials disclosure and extended material responsibility are strategies for getting supplier data, but materials and products still need to be correctly identified at take-back to complete the cycle.
Various companies actively working towards circularity have take-back programs to reintroduce materials and products to the remanufacturing process, but few have been tested at scale. This is very much still cutting-edge, and perfecting the processes and infrastructure will take time.
However, supply chain outreach combined with extended material responsibility is a readily available tool that will help to reach large-scale, pragmatic circularity. If you’re a manufacturer looking at improving your supply chain outreach responsiveness, you can easily start by heading to Toxnot by 3E and signing up for an account today.