Manufacturing in the circular economy

In today’s world, where environmental concerns are at the forefront of societal and legislative change, recycling processors and product manufacturers play a crucial role in shaping a sustainable future. A win-win proposition for processors and manufacturers is to recognize that taking back products is a business trend, as well as a sustainable practice. This proactive approach helps build a positive reputation and opens doors to new business opportunities.

Manufacturers use raw materials or commodities such as recovered paper, plastic, glass and metals, to make products. A value is assigned to each when put on the market. Paper prices stem from the timber and forestry industry market; plastics, depending on the type, are given a value based on the price of a barrel of crude oil (plastic in its rawest form); glass comes from sand; and metals are valued by their type and alloy.

So, how can product manufacturers and recyclers collaborate in the circular economy? Producers and processors can employ four effective practices to increase diversion:

       1. Proactive reuse and recycling of products

When assessing material needs, companies can shift their production methods and take proactive measures to reuse, reclaim and recycle their products. This encourages consumers to return recyclable items through various convenient channels. In turn, such sustainability-minded companies won’t need to buy so much raw material. This saves them from creating virgin material-based products and embraces circular economic practices, which can help ensure the longevity and resilience of their business model. Manufacturers that prioritize recycled content in their products increase the value of the commodities used and could tell an attractive, environmentally conscious story for companies that use recycled content rather than mining for virgin resources.

2. Collaborating with shipping partners

For product manufacturers, collaborating with shipping carriers, such as FedEx and UPS, and providing prepaid labels for customers to mail back expired or old products simplifies the return process and promotes participation in take-back programs. A production process that reuses an item with intention can create a circular economy for any company and begin to reshape product production into a circular process rather than a straight line to the landfill.

3. Reverse vending machines

Reverse vending machines (RVMs) are another solution companies can use to create value in consumed packaging and products. RVMs are much like beverage vending machines, but the machine pays the user for the materials it is given instead of the user paying the machine to receive merchandise. Ten U.S. states employ the RVM model, but this circular value chain concept could be expanded nationwide, without legislation, to raise recycling rates to 60 percent compared with states redeeming bottles at 24 percent.

4. Extended producer responsibility

While recycling efforts begin at the individual level, it is equally essential for decision-makers within companies that make products to prioritize recycling practices and to understand how they will affect extended producer responsibility (EPR). It also is important to understand how EPR could affect manufacturers in the states where they manufacture and sell their products.

The circular economy offers a promising path for recyclers and product manufacturers to remain competitive while contributing to environmental preservation. When product manufacturers reduce their use of virgin material, employ shipping program partners, incentivize reverse vending models and embrace EPR with consumer-direct cash and reward/point programs, everyone wins. As industries prioritize more sustainable practices, recycling processors have more demand for their products and product manufacturers can differentiate themselves as key players in the circular economy.