News round-up
The ECOnomics of the circular economy
A Pan European company whose products move millions of fresh and ambient goods from manufacturers to retailers’ shelves has invented a new concept which could reduce costs and boost margins at the same time as eliminating waste and promoting sustainability in the supply chain – the ‘ECOnomics of the circular economy’.
At a time of mounting cost and margin pressures on the retail sector, Pooling Partners, the parent company of UK’s IPP Logipal, and its sister brands across Europe, suggests businesses should re-engineer their supply chains to maximise returns – not just to improve their profits, but for total supply chain transparency and environmental sustainability - from farm to fork or pallet to palate.
The company which is the only pallet company to manufacture its own products, also retrieves, repairs and repatriates pallets from all over Europe through a leasing model that ensures it can track them at all times - a model that, it suggests, could help retailers overcome some of their biggest financial challenges.
“In a low-margin sector, you simply cannot afford to be profligate with your products,” said UK Country Director Carl McInerney.
“Unfortunately, the Internet has proved to be a double edged sword in that retailers have become experts at marketing and optimising the outgoing customer journey, but have struggled when it comes to tracking and tracing its returns when the item is not required. Operating an environmentally sustainable reverse logistics programme in the age of the omni-channel, where people can buy anything anywhere and at any time, is a recipe for limited visibility. This means retailers often do not know where a product is in order to repatriate and re-sell it.
“This is a huge headache for retailers whose stock accuracy files cannot easily be reconciled with the goods lost in transit (GLIT) which may be lost, stolen or simply clogging up space at another warehouse or distribution centre (DC). It may be malicious loss (theft), or simply a process error.
Pooling Partners argues that ECOnomics is the essential science of cost-effective ‘mapping’ that will drive the new smart technology economy.
The drive towards the Internet of Things, means that human interaction will reduce as products become increasingly ‘self-sorting’ or ‘homing’ so that they are repatriated faster and will be less harmful to the environment in terms of reduced carbon footprint and ‘empty running’ of trucks.
“This will be important for reducing product movements, waste and carbon footprints as well as cutting costs – hence the term ‘ECOnomics’, because it benefits both the balance sheet and the environment,” added McInerney.
“We are not far away from turning this concept to a reality, but we do need greater cross-functional collaboration to make it happen. Marketing and merchandising have to be on the same page as the supply chain and loss prevention teams, but this could be achieved through broader board engagement and this is turn will drive better shareholder engagement making the retailer a more promising investment prospect.”
