Operations
06 October 2022
5 ways to create more sustainable supply chains
A recent summit GS1 US summit looked at the innovation creating a more circular economy.

Photo by Matt Seymour on Unsplash
A recent summit GS1 US summit looked at the innovation creating a more circular economy.
Over the last two years, supply chains have moved front and center like never before, as the bullwhip effect that resulted from the pandemic made consumers more aware of how the goods they buy move across the world, and how challenges in one area can have a far-reaching ripple effect.
It showed that supply chains are global, interconnected systems, and they have a massive impact. But it goes beyond getting items to shelves. As we seek to build supply chains for the future, it’s important to also consider their impact on the planet.
On Sept. 29, GS1 US held an innovation summit to explore work taking place to create more sustainable supply chains. GS1 US is the American organization that provides unique barcodes to brands and retailers for tracking items throughout a supply chain. Through this, it works with partners across industries, and provides a link to a global network that make these standards universal.
It’s also uniquely positioned to identify what’s coming next, and the event put innovation in sustainability in focus.
“We cannot talk about supply chain resilience without factoring in circularity and sustainability, said Vivian Tai, director of innovation at GS1 US. “Making our supply chains more circular and sustainable will be a herculean undertaking, and we will need to collaborate to produce more responsibly, to lower the impact of trade on our planet, and to create positive handprints by the way we choose to consume. GS1 Standards serving as a common language will be an important enabler for the collaboration that will need to happen.”
It comes at a time when consumer demand for sustainability is growing as the impacts of climate change come to bear. Brands and retailers are putting sustainability forward in their mission and actions as a result. In listening to speakers throughout the event, it was clear that the companies behind the process of making and moving consumer goods all have a role to play.
Still, it’s worth considering: What do we really mean when we talk about sustainability? The event broke this down through a series of presentations and panels. Here’s a recap, which can double as a primer on the different levels to address sustainability in consumer goods:
Solving environmental challenges require addressing systems, and no one company or country can solve it alone.
That collective imperative came through as Shannon Bouton, CEO of environmental nonprofit Delterra, kicked off the day with a keynote talk about how her organization is working to grow recycling in areas of the world where citizens lack access to waste management. Launched in Indonesia and Argentina, the McKinsey-founded nonprofit’s Rethinking Recycling initiative is working on both the supply and demand side of the equation in communities. It is working to develop economically sustainable recycling programs in cities and training waste workers, while working with local companies to ensure there are large enough local markets to absorb recycling on an ongoing basis.
“You have to look at the whole system,” Bouton said. “You cannot solve this problem by focusing on any one piece of that value chain. I like to think of what we do as being acupuncture – targeted interventions at critical points that unlock the flow of materials across the whole system.”
Around the world, the system that is currently in place is largely informal. In fact, Bouton said the unsung heroes are waste pickers who collect recyclable materials from trash cans and dumps, then sell it into a stream of mostly informal aggregators.
“Finding the right set of incentives to bring these players into a transparent market and training them to use the tools to do so is the real crux of the challenge here,” Bouton said.
The journey of a product can say a lot about where it has been, and whether it can find new life in a second use. Along with taking a systems-level view, tackling sustainability requires familiarizing oneself with the terminology used within the supply chain on the data level. GS1 US Senior Director of Traceability and Sustainability Timothy Marsh summed up three key terms.
To be successful with sustainability, all three of these things are needed at many levels, from charting the path of a product to making the decisions that allow supply chains to balance environmental and business considerations. They also allow businesses to meet consumer demand for more information about the origins and journeys of products by providing data that can paint a full picture.
Developing standards can offer a “common language” that allows this data to be used by the many entities involved in the supply chain, said Maria Basso, platform curator with the World Economic Forum.
“There’s a world of information out there. It’s all in different formats, it’s all communicated in different ways and it’s begging for a standard way to communicate, so that every stakeholder can understand their impact, and can understand their ability to contribute and improve,” said Jeff Eason, senior manager for sustainability data and tech at Walmart Stores.
The journey in supply chains now reminds Eason of the early days of the internet, when protocols like HTTP were being developed to provide a common footing working on the decentralized networks.
“Imagine all the innovation and all of the advances that has been unlocked since that agreed-upon set of language” was developed, he said.
Sustainability measures aren’t only required for a product’s journey to a sale. It must be taken into account after a purchase as well. Returns are one area that is especially in need of attention. According to Deloitte, the rise of ecommerce over the last decade has led to a 33% increase in the return rate for overall retail sales.
This growth has led to challenges in supply chains. Stores often don’t have space to hold returns, and find margins challenged by selling this inventory again. When moved, returns traverse their own path known as reverse logistics, which increases the carbon impact. Many returns are also destroyed or thrown out, instead of being resold.
But increased focus on the waste that is generated has led to a focus on sustainability, where previously there was a focus primarily on profitability.
Reuse and resale business models are emerging that keep existing goods in circulation. Webb referenced examples such as the apparel rental service Rent the Runway, Ikea’s furniture sell-back program and a refurbished program for medical imaging equipment run by Phillips.
These models are crossing packaging, products and company operations. At the event, Brian Bauer demonstrated how Algramo makes smart packaging that enables people to buy exactly the amount of a product they want, and access refilsl. Recurate CEO Adam Siegel talked about its integration powers resale channels on the websites of 50 brands and retailers like Steve Madden, Michael Kors and more. This allows shoppers to list an item for resale on the website of the brand where the item was originally purchased. It’s all designed to enable circularity.
“The most sustainable product you can buy is almost always a pre-owned product and our goal is to make that easier for buyers and sellers,” he said.
Companies must also consider the items they use to conduct normal business. According to Chief Impact Officer Garr Punnett, Rheaply provides software that brings more visibility to company asset management and facilities management departments to enable reuse of items like office tables and chairs within a company. When a business is ready to discard items, the company also reaches out to the community to extend the lifecycle of materials by finding a new home or resale outlet. The company wants to do everything it can to keep an item from going to the landfill.
When seeking to increase sustainability, the materials that hold goods as they move from place to place are another important area to focus on. The EPA estimates that packaging accounts for 30% of waste annually, so offering more environmentally-friendly approaches that keep boxes and containers out of the landfill can move the needle.
Promotion of reusable bags and bottles, as well as innovation in edible packaging and plant-based packing peanuts are showing the way to a future where there is an alternative to single-use, plastic packaging.
Multiple levels of engagement are needed for a more circular future.
Education and communication are necessary. Scrapp Recycling CEO Evan Gwynne Davies talked about how the company’s app allows users to scan the barcode of an item, and tells them which parts of the product are recyclable according to local rules.
Brands and retailers are setting out ambitious sustainability goals, and must consider sustainable packaging that fits within their operations in order to meet them. Returnity works with brands and retailers to implement reusables in a way that makes sense for their supply chain, working with Rent the Runway, L’Oreal, and others, said CEO Mike Newman.
There are many different levers a company can pull strategically to make packaging more sustainable, as well, said Mike Stockman, of Delterra. That could be less packaging, or changing materials. The nonprofit makes a tool called PlasticIQ to help understand those different choices, and the implications of them over the long-term.
When it comes to sustainability, “There isn’t one size fits all approach,” Gwynne Davies said.
While there is lots of work to preserve items, not all materials are recyclable. Many that are discarded end up as waste. Alongside reusing what you can, an important consideration is reducing waste that is created.
Emerging areas are addressing this. Biomimicry is the study of organisms and their interactions to apply solutions that have already been created in nature to answering problems created in society through industries from apparel to healthcare. Regenerating fabrics are an example of an area in development.
At the same time, new methods are being developed to recover materials that were thrown out, including employing robots to mine landfills and recover reusable materials such as ewaste. Startups are also working on ways to take food waste products and turn them into consumable products such as flavors.
As products are manufactured, transported, used, discarded and then used again, data will become a powerful asset to provide a look at where a product came from, and where it might be heading.
“Global unique identification and standards-based data sharing will be essential for a more sustainable future,” said Melanie Nuce, Senior VP of Innovation and Partnerships at GS1 US.
As the organization that works to champion and spread those standards, GS1 is working with organizations on each level of the supply chain, and enabling collaboration to bring that future into view.
“Sustainability teams do not have to go at this alone. From trying to figure out how globally unique identifiers (that they have already invested in) could do more for them, to working with trading partners across their value chain to implement sustainability or circularity initiatives, we are here to partner with you,” Tai said. “Whether it is finding the right new emerging technology, trying out a new way to be accountable for carbon impact of products, or recovering materials through better traceability practices, the Innovation and Partnerships team at GS1 US is here to support pilots and further exploration with you.”
GS1 US will dive deeper into the digital supply chain at the Supply Chain Visibility Summit on Oct. 20.
Trove's Brand Resale Index identifies best practices for brands that own their recommerce programs.
(Photo courtesy of Trove)
In the current era of commerce, brands are exercising more control over how their products are sold, and delivered.
As they run their own stores both online and offline, brands have ownership of the relationship with the customer, the shopping experience they provide and the process that delivers goods to their doors.
Increasingly, this ownership is also extending to resale.
While secondhand sales were long the province of marketplaces and consignment stores, brands are increasingly choosing to bring resale under their own roof. With infrastructure provided by software platforms, more brands are setting up their own recommerce programs that offer trade-ins, and selling pre-loved items through a channel that operates alongside ecommerce and brick-and-mortar.
Trove CEO Andy Ruben saw an opportunity to grow this area of resale after running sustainability, private label and ecommerce at Walmart.
The question he sought to bring from the whiteboard to the real-world was: “How would a different model work where brands could continue to grow, but their growth would not directly connect to new production?”
“So brands like Patagonia would make money the first time they made a Nano Puff, but then make money the second and third time they would sell that same jacket. And over time, more and more of the growth would come from the secondary sale as they have more products in the world,” Ruben said.
This resale model arrives as a generation of brands – Think: Patagonia, On, REI, Lululemon – are building strong affinity among customers, and creating highly sought-after products that make consumers want to seek them out. This increases the value of resale, as consumers can still participate in the experience with a brand and own an item, while doing so at a lower cost barrier to entry than buying new.
As this fast-growing segment of the $100 billion resale market continues to see more brands join in, Trove sees a set of best practices for brand resale emerging. Working with OSF Digital, the recommerce software company is codifying these and highlighting leaders in the space in a new report out on Tuesday.
The Brand Resale Index, which evaluated 40 brands across four verticals and was agnostic of tech platform, identified four key areas where brands can stand out:
To make resale sustainable for brands, growth and profitability will be necessary. Ruben said software is a key tool to undergird all of these elements.
“If you don't have that technology backbone, it's going to be very hard as a brand to make money and scale this program,” Ruben said.
(Courtesy photo)
When it comes to the leaders in resale, the report broke down top performers by category:
The leaders tend to stand out by tying each best practice listed above together. For instance, REI makes resale part of its membership program, so there is an inherent connection between the experience of buying a resale item and the experience of participating in the brand’s community.
“Brands have the ability to offer you things that no one else can,” Ruben said. “By trading items in, they can give you exclusivity and access to the core of the brand in a way that a third party marketplace or an Amazon never could.”
Looking ahead, the Index identified a key opportunity for luxury brands to expand their own recommerce channel. The category has a long history in resale, but the leading brands do not for the most part own their resale experiences. Rather, it is consignment shops and second hand boutiques that make up most of the upscale secondhand market.
“Luxury has all of the elements that make that category a winner in this space,” Ruben said. That includes items that are coveted by consumers, a deep narrative and heritage around those items, as well as a pricepoint where products hold their value.
Here are a few more key findings from the report: