Suitability meets sustainability - the shift to circular procurement
Procurement is evolving. It’s no longer focused on just purchasing products to suit immediate customer needs, it considers products and services throughout their lifecycle, from design to disposal.
It’s called ‘circular procurement’ and our Chief Procurement Officer, Alex Jennings, spoke to Paid, creators of the next generation of procurement automation platforms, about its increasing importance to DS Smith’s customers.
About Alex Jennings – Alex is DS Smith’s Chief Procurement Officer and is transforming our Procurement and Logistics operations in line with our customers changing needs and our expectations as a FTSE100 business. He’s a Charted Institute of Procurement & Supply (CIPS) Fellow and has previously been an elected member of CIPS congress, committed to driving the improvement of the profession. Alex has also made The Power 30, the annual list of Europe’s 30 most influential Procurement leaders twice.
What is circular procurement?
Traditionally, procurement has focused on sourcing and purchasing new products to meet immediate customer demands. What happens to those products when they reach their end-of-life has not always been considered. This is what we call the ‘Take, Make, Waste’ or linear economy.
Circular procurement encourages businesses to consider how they can maximise the lifespan of that product through repair and reuse, and how products can be recycled once they reach their end-of-life stage to protect the earth’s finite resources.
Sustainability is at the heart of everything we do and circular procurement is something we focus on as it can help our customers build sustainability into their businesses too. We are leading our industry through our Now & Next Sustainability Strategy and as a global partner of the Ellen MacArthur Foundation, we support the transition to a circular economy . This helps us drive circularity and innovate around products in our manufacturing process — where they come from and how we make sure that they’re produced in the right way. For example by 2023 all our packaging will be 100% recyclable or reusable.
Sustainability custodians of our customers’ brands
By understanding how a product will be disposed of at the start of its product cycle, our customers can structure procurement specification to consider total lifecycle costing and not just the upfront price. This can deliver better long-term commercial value.
There is also increasing evidence that since COVID-19, consumer attitudes towards sustainability have strengthened and circular procurement will have a vital role to play in winning and retaining business. For example, our latest research with Ipsos MORI shows more than half of shoppers actively look for more sustainable packaging and almost a third of European shoppers say that they have stopped buying particular brands altogether because their packaging was not sustainable.
As our research shows the consequences of not having strong sustainability credentials can be damaging and we are trusted to develop fully auditable, circular solutions that satisfy the growing demands of customers, stakeholders and employees. Supply chains can be long and complex and we don’t just look at the circular merits of our own products but the sustainability credentials of everything and everyone within our supply chain, including our external partners. To this extent we see ourselves as the sustainability custodians of our customers’ brands.
Circular procurement in action
Many of our customers are looking for circular or sustainable solutions to solve problems that have caused them a problem for a long time. For example, nearly half of Europeans (46%) say they want to use more cardboard or paper-based packaging rather than plastic based packaging. So for one of our customers selling frozen, chilled and ambient food we met this challenge by developing ECO Bowl, a new, more sustainable alternative using a corrugated cardboard tray with 85% less plastic. Not only that, at the end of life, the materials can easily be separated for recycling.
Another problem we’ve helped to tackle is recycling coffee cups. We’ve worked with the entire ‘coffee-to-go’ supply chain and have a procurement solution with the capacity to recycle every coffee cup consumed in the UK. Now we are developing infrastructure to facilitate separate collections of coffee cups from other paper streams to keep 2.5bn coffee cups out of UK landfill each year and in the supply cycle.