Remember the days before Coronavirus when climate change was the great threat to humanity? With our eyes now firmly fixed on the unfolding impacts of the pandemic it is easy to overlook, but it hasn’t gone away, and urgent change is needed.
If COVID-19 has done any good, it is that a number of sacred cows have been killed regarding what is possible in how we live and work, such as the need for 9-5 office attendance, ad hoc convenience shopping and the need to use cars constantly - all debunked and the air cleaner for it. But these effects only go part way to achieving sustainability goals, even if we did retain those lockdown habits. Is there a better way?
As a lean transformation practitioner, I am used to a view of organisations as single entities operating a linear process beginning with extraction of virgin materials, processing and manufacturing and disposal of both by-products and those goods when they reach end of life. My focus is often on waste in the production process, which includes what is thrown away, nugatory activity, what must be reworked and unsold or unfinished stock. But lean thinking does not deal with the necessary need to procure and dispose of materials. Meantime, mineable raw material reserves are dwindling, their extraction and processing carbon-hungry and disposal fouling our planet.
An alternative approach is to adopt a circular model of resource use, where we keep clean, reusable resources in circulation – the Ellen MacArthur Foundation are the great champions of this. Keeping materials in circulation means everything from extending product life through good maintenance to refurbishment and re-use of parts, to recycling of base materials.
This poses big transformational challenges for all, and not least for the procurement community, as it could change the terms of trade with suppliers and customers alike. The implications are subtle but important.
Each level of circular use needs buyers finding suitable ways to source inputs for redesigned production processes. The reuse of good reusable components through a buyback scheme could be far cheaper than a process reliant on remanufacturing from recycled raw materials. New thinking will sit between production designers and procurers - a great example is the recycling work Stuffstr is doing with Adidas.
Every output from your business should be seen as an input to another, whether it be offcut materials, chemicals, end-of-life stock, or obsolete plant. Each can be designed to have value for other processes and as such, potential as an auxiliary income stream. But to maximise downstream sales value, businesses will need to track and pass on data to prove the carbon pedigree of their by-products.
As virgin materials become less abundant, expect prices to rise and buyers will need to consider alternative reprocessed sources. Whether motivated by cost or green credentials, businesses will expect procurement professionals to verify the specification and genealogy of the materials they use; the community will need to include this in their compliance thinking, especially as carbon accounting gathers pace.
Finally, the carbon cost of anything bought in must include the real costs of sourcing including transportation, transaction costs, lighting, warehousing and reprocessing. Any costing or bidding process will need to be able to assess that carbon footprint as part of the true carbon audit trail of the business.
Virtuous circles of resource are emerging, notably in the food and textiles sectors - but they are fledgling initiatives. When the Covid-19 cloud passes, the Climate Emergency clock will still be ticking and big changes will be needed. The impacts on supply chains will be fundamental, but change is essential to enable economies to function successfully, without reliance on throw-away practices.
Adam Hobbs is a Business Coach and Consultant, MD of JamJarCo: a Lean Transformation practice focussed on promoting sustainability as strategic roadmap for both resilience and growth. He lives in Bournemouth with his wife and three children.