4 Benefits of a Closed-Loop Supply Chain | Pallet Consultants
Many benefits in a closed-loop supply chain aren’t purely financial. Social and environmental factors are some of the best reasons to close the supply chain loop and reduce waste.
In a typical supply chain, goods and products are transported on pallets or in containers from manufacturers to distribution centers and then to customers. Generally these pallets or boxes are left with the party receiving the products, placing the burden of recycling or disposal on whoever is next in the supply chain. In a closed-loop distribution system, items related to product packaging and shipping are returned to the original manufacturer or distribution center to be inspected, repaired and redistributed. Although closing the loop completely is an ambitious task, some of the world's largest companies are already working towards that goal.
If they closed their supply chain loops, many businesses would see a cost-savings from no longer being responsible for disposing of pallets and other packaging material, especially larger companies with multiple locations. Consumers around the world are increasingly favorable to green companies and more people are choosing to do business with environmentally-conscious entities. Start a conversation with us to learn how our fast pallet retrieval and delivery, efficient pallet recycling and on-site repair programs can help close your packaging supply chain loop. The main advantages of a closed-loop supply chain are:
- Reduced Waste
- Improved Public Perception
- Enhanced Customer Loyalty
- Being Ahead of the Regulatory Curve
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1. Reduced Waste
Reducing waste and increasing efficiency of all supply chain facets are the principle benefits of making supply chains more circular. Inefficiencies and missed recycling or reuse opportunities produce waste and pollution. Pollution has an inherent economic cost because of its consequences on individuals and environments around the country. Reducing waste saves money and helps the overall economy.
But if supply chains will be redesigned to produce a minimum of waste, many changes will have to be made. For example, many facilities use pallets not optimized for their applications, and many boxes used in shipping today do not fit products with 20%-30% of their space wasted. More space-efficient packaging would alone save significant amounts of material, transportation space and fuel costs.
2. Improved Public Perception
Environmentalism is now mainstream and will continue to become a bigger part of consumer habits. According to a Unilever survey conducted in five countries, 33% of customers prefer sustainable brands. Changing to a closed-loop supply chain is a great way to earn positive publicity, and can make both consumers and other businesses alike feel better about associating with green companies. Between the overall improvement in customer perception and the increase in sales associated with it, becoming environmentally conscious can be financially beneficial.
3. Enhanced Customer Loyalty
This is related to improved public perception. Customers who choose to support environmentally friendly companies feel better about spending money there and will be more loyal to the brand and its products. In the Unilever study mentioned above, brands that integrate sustainability have 30% higher growth than those that don't. Taking sustainability farther than just your supply chain by offering reusable or refillable packaging for customers earns additional respect and loyalty. Through this approach, customers also become a part of the system of sustainability and become more integrated into that company's ecosystem.
4. Being Ahead of the Regulatory Curve
Government regulation on sustainability efforts like closed-loop supply chains are almost guaranteed at some point in the future, however far off it may seem today. By adopting these policies now, companies and organizations can lead the way for lawmakers and influence policy decisions through their own experience. Not only would money be earned through long term savings and increased sales, but being ahead of the curve in that way would be a great advantage.
While the rest of the business world has to move towards going green, those already leading in the sustainability space would have mature supply chains and more capital on hand, larger brand recognition and deeper customer loyalty. Pallet Consultants is a leader in packaging sustainability with our extensive pallet recycling programs. We can help you close your packaging supply chain loop through our fast pallet retrieval and delivery, efficient pallet recycling and convenient on-site pallet repair programs. Learn more about how we can increase your pallet inventory efficiency while making your operation greener by talking to our pallet and logistics experts.
Interested in closed supply chain loops? Pallet Consultants offers pallet pools and on-site repairs to close your pallet inventory supply chain. Servicing the nation with high quality products and services from pallet auditing and total pallet management to pallet manufacturing and recycling, Pallet Consultants is a full-service pallet supplier. We’d be happy to take time reviewing your unique situation and answer any questions you may have. Start a conversation with us!