Ep 148: Scaling supply chains in the circular economy with Deborah Dull

Deborah Dull 00:00

We pull off miracles every day to never be known. So the reason why nobody knew that our field existed for so long is because we were in the background doing like, Mission Impossible type stuff. And like nobody knows that Tom Cruise saves the world all the time, like that's, you know. So that's kind of been our space.

Pippa Shawley 00:21

Hello, and welcome to the Circular Economy Show. I'm Pippa, and in today's episode, we're exploring supply chains in the circular economy. By day, Deborah doll is vice president and global supply chain sustainability leader for Genpact, an organisation offering assistance and analysis on tech strategy and supply chain implementation. By night, she co-founded the nonprofit Circular Supply Chain Network to create a space for supply chain professionals to come together and discuss the circular economy. I sat down with Deborah to learn more about the opportunities and challenges of circular approaches in supply chains. The advantages of moving to a more agile system, and why supply chain professionals are the Tom Cruise's of the business world. I started by asking Debra, what a supply chain typically looks like in the linear economy.

Deborah Dull 01:12

We aim to understand what demand is needed where in the world. And we aim to meet that with supply that the very easiest, simplest way to explain it. So if you, for example, are going to have a friend over for dinner, then you have to figure out what that friend wants to eat, what time they'll arrive. And depending on if you do an appetiser first or serve whenever you're actually kind of experiencing what we do in supply chain. So what does who need where, when and how much, then how do we meet that so you had to work late that day. So you best to go to the grocery store the day before, maybe you want to get a little prep done early, you don't actually know if the friends coming or not, or the second friends who maybe you're going to get ready to have a little bit extra capacity, so that you can feed more people. That basic is what we do all the time. But instead of the dining room, it's you know, the whole world. So we get to look at grocery stores and big factories and the the everyday experiences that we have. And then the everyday experiences that we don't know that we have. When we think about different industries, then, of course, it gets more complicated. If we think about a t shirt, for example, you'll have a shorter number of suppliers. So what I mean by that is, if you're a major retailer, then you probably work with a major brand. That's one tear back, that brand is going to work with a manufacturer who's going to make that T shirt, that's another tear back, that T shirt is made up of cotton and threads, and maybe some dyes, those are all going to be different suppliers. So that's another tier back. Closing usually has five or six tiers. But something like a car has 20 tears all the way back to the planet. And so that's the way we think about today. And you didn't ask for linear and I see a completely different world with circular supply chains. But this idea of the suppliers, suppliers, suppliers supplier can then vary by industry. And that's where it gets pretty complex because none of this chain of suppliers really owe anything to anybody that's not their direct supplier or their direct customer. And this is where the complexity and I think the fun comes in. Where how do you then try to predict, shape and wrangle this ecosystem of partners, when really nobody is required to do anything differently? And this is one of the challenges, we start talking about transitioning to a circular supply chain in a circular ecosystem. How do you even find who these are most supply chains can't see past their tier two, only 2% can see into their tier three suppliers. And so the vast majority of our supply chains are unknown to us. And I think we can solve that by making our supply chain shorter. But we'll get into that later, I'm sure.

Pippa Shawley 03:53

Great. And I was thinking then as you were talking about that, that often when we talk about the circular economy, we say it's not just doing less bad. It's not just recycling our plastic waste, it's turning off the tap that gets that as it is stepping back along there. So when we think about a circular supply chain, what does that look like?

Deborah Dull 04:15

So first circular supply chains are going to source finished goods that I think will drive a lot of our repair and manufacturing activities straight into cities. So as we see this big urbanisation move, we can take advantage of the density of cities to do what many call urban mining. So how do we find materials and ideally finished goods inside of cities, and again, do as little to them as we can so it might be repairing a button, or simply cleaning an item of clothing or something else that we need to use around the house? And how do we get it back into the hands of a user as fast as we can, which all of you listening is probably very well aware of that concept from a supply chain perspective. What that means then is instead of becoming very, very good at managing all all these disparate, globally centralised factories, we then have to start imagining instead of one big mega factory, what if we had 100 or 150 Micro factories in our major urban centres around the world that totally shifts how we partner who we partner with our systems for visibility, type of inventory, spare parts, we need to repair. So we need different items to repair than we do to build something new. So to me, it's super exciting because one, that's a totally different way to think about the way that we run things. But it also helps solve that visibility challenge, we think about 512 15 tiers of suppliers that we really, really are never going to know who those last folks are. And then if we collapse the supply chain and make it only one or two tiers, we sourced from somebody, we do something to it, we give it back to somebody, we make our lives a lot easier. And we can actually do better on the top goals for supply chain. So performance for us usually looks like time and cost. So how quickly can we get something to whoever needs it? And how much does it cost us to do that. And if we don't start from the planet every single time, theoretically, we can go faster, and we can be cheaper than starting from scratch. And that premise, I would love for more supply chain professionals to sit down and imagine what would it look like if we were to imagine our supply chain in that way. Because I think even if you don't end up fully transitioning, it gives you a chance there might be a nugget of innovation in there that you never looked at before, because you haven't placed these constraints on your team before.

Pippa Shawley 06:34

And then I imagine that with supply chains, having all these elements to them, the idea of changing the system to a circular one could be quite alarming to somebody or to an organisation that spent all this time refining it to work really well within this linear system. And to change it feels like a massive risk. But you've also talked there about the opportunities of like not having to go back and get virgin materials out of the ground, which comes with so many different problems, potentially, and cost both in terms of money and emissions and that sort of thing. So what would you say to somebody that's like, oh, yeah, I know, we probably should. But I'm a bit scared to do this.

Deborah Dull 07:17

We know it is going to be hard. We have built these eco local ecosystems, you might call them around different industries. So there's some countries who really specialise in textiles or electronics. And it's not just that the factories there, the factories, factories, factory, all the suppliers of raw materials have gathered around in these mega cities really of where everybody works and lives. And moving a factory then means moving an entire ecosystem. Well, it's really interesting to me, it's been these last few years of the acceleration of talking about reshoring, or near showing or friends sharing of moving a factory.

Pippa Shawley 07:59

While national security and wanting to avoid the kind of market fragility we witnessed during the COVID pandemic have often been the political motivations for these changes. The solution is the same says Deborah.

Deborah Dull 08:11

How do we create these distributed smaller, more regional factories with the ecosystem of suppliers around them? And I think that, to me, I'm an eternal optimist, sometimes will fall. And that is very makes me very optimistic for this year next year as we bring smart thinkers from both ends of this spectrum together to try to figure out how do we move these huge ecosystems and it really ends up being quite positive for local communities, because that means a more diversified way to spend these corporate dollars into different types of suppliers. And that is one way that supply chains can really work to improve the communities around us, which is I loosely say a regenerative practice, it's sometimes getting our head around the third principle of regenerate can be very difficult. But for supply chain, that means spending our money in a different way and leaving the place better than we found it.

Pippa Shawley 09:02

Yeah, which is the goal of the circular economy anyway, right? We don't we don't want to create all this ways. We don't want to have all these scope three emissions trickling down through our supply chain. You've made a really great case for why we need to switch and that it is possible. It's not scary. I need evidence. Can you give me some specifics of where it's happening?

Deborah Dull 09:22

So for example, that team at Unilever managed to put entire food manufacturing line instead of a 40 foot container. And they can move out into local markets, not only this is widely used, but imagine if it was you can really go and produce for local market, just what they need for a certain period of time and actually move your factory and BioNTech has actually done that with it took more than one I think it took some be six and they've put them together six, six shipping containers, but to make the COVID vaccine so they can move it into resource constrained environments and into markets that don't usually get access to pharmaceuticals, and they can produce on site So we see this shift into the innovations around the concepts of a circular supply chain. How do we have smaller factories more distributed, closer to the point of views that really start to solve for some of these long term wastes that supply chain managers have always just lived with like, movement transportation, we consider a deadly waste, we call it and we do so much of it because we don't have another option. And this gives us another option. So I do see some shifts, I think technology is the only way I might be so bold to say that we can actually take advantage and continue to deliver on what we need to which again, is is it costing the right amount? And are we able to meet the time commitments that we've made to our customers?

Pippa Shawley 10:45

And I know you've worked with a lot of these companies that are considering making the switch, or they've started it. And I wonder what they say, when you come along? And you're like, these are all the things we need to consider, but look at what could be in it for you.

Deborah Dull 10:59

Absolutely. So look, I rarely approach circularity from a sustainability perspective. That might be halfway because of my audience is mostly engineering background supply chain, folks. But also, you know, there's this economy, half of the term circular economy that we don't talk about as much, which is too bad, because I think we've somehow gotten ourselves into a pickle that says, if it's a circularity initiative, we need to go find money to do it, it will cost us more. And now there's this widely held belief that sustainability always costs more. When I talk to practitioners, who are the leaders in this space, they tell me that that's not actually the case, they tell me that two thirds of their sustainability initiatives are margin positive, or margin neutral, so it's not costing them any more money. So one piece, if we gotta bring the money, we gotta bring the economy back to the circular economy half. And I urge people that if you have what you think is a circular initiative, and it's costing you more, have another look at join some industry groups, or go ask some circularity leaders on to try to help you solve why that costs more. Because I think this piece offers us a lot to go and do so all that to say, I rarely approached from a sustainability perspective. Often because of this reason. I've rarely been challenged like, this doesn't seem like a good idea. It's more How can I possibly get started. So I start often by explaining that we are in fact in a linear economy. And what that is, because we as a supply chain community really haven't been engaged in these conversations, so often, we're not aware, and then to explore this world that looks like repairing more than we build new. And for my colleagues in repair and return spaces. This is their showcase moment. You know, they're they're not often included in many conversations in the supply chain, they're often forgotten. But I believe they are the superheroes of tomorrow, because they already understand how to flow backwards and sideways. And our systems and processes and our lanes, and our infrastructure is really meant for these forward supply chains. And if you've ever tried to return something, or repair something, and just before this, my suitcase zipper broke, and I'm sitting here going, There's no way I'm gonna get this repaired cheaper than my suitcases worth. And so if you've ever done that you feel some of the pain that these global organisations have in trying to go backwards, or sideways or local in some way. But that skill set that awareness, the systems are what will be needed to really facilitate this repair first mentality, which is the best way can easily describe the difference of a circular supply chain. But it's not repair ship something off many miles away to get repaired. It's a repair as close to the user as possible, which can be a challenge, and we have work to do in developing out our repair networks. But I think we actually have more repair options than we think we might have. But they're technologically disconnected. Not some of the work my colleagues and I are doing in my day job is to really bring these different repair vendors together digitally, so they don't have to be fiscally beholden to each other but be aware that the other exists and maybe even share spare parts so that when an item needs to be repaired, we can optimise that network just as well as we optimise for flows today. So here's a cool thing that I really think is going to happen but hasn't quite happened yet. So imagine every corner is a repair shop and you can take anything in Great. Then with technology. You could have your item scanned with a laser I'm diagnosed with machine vision, and so that it knows how to print you a spare part, let's say something on a blender, something broke, or you've lost a screw or something like that. Or if it's a pair of jeans, that it knows which gene that is, and can match your original zipper as quickly or as closely as possible. Cool. That's one half, how do we figure out what happened to the item and what it needs? Now, how do we actually fix it. And one of the issues, of course, is that we need human beings who have spent their entire lives around one thing, and since we're in the UK, I can reference the repair shops, such a great repair, it's called the repair shop, right? That lovely TV show. But they've really, they're experts in these one areas. And I think with the help of technology, we can take somebody who has an engineering mind and is quite clever and handy, but give them this machine vision kind of augmented reality, a pair of glasses, that can help coach them through the repair. What it makes me think this is not so far away, is that this is being used in the industrial world to already help assist with repairing the huge pieces of machinery that help our world function. So a repair person can show up, they can identify the machine that needs help by wearing these glasses immediately. And then it'll actually watch them do the repair and say like, Ooh, hey, wasn't No, not quite like that. And so then you have this wonderful virtuous circle of learning between machine and human. And while it gets a little like matrix boardy, I really think that that will help us get to where we need to go as society also helps to develop skills within humans and help with job creation, of course, because we do need quite a few of these people out in the world, if this reality will become true, and I totally believe it is going to happen, it's probably gonna take longer than I want it to. But that really is, I think, the very real realistic future where we can actually use our items much, much longer and don't get frustrated by broken suitcase slippers.

Pippa Shawley 17:03

This kind of innovation should come from industry itself believes Deborah.

Deborah Dull 17:09

we tend to put a lot of pressure on the consumer to say demand different from your brands. And I'm in the complete opposite end of the belief that it wasn't the consumer that asked 100 years ago to have a bad light bulb produced. And I think it's unfair of us, and I think often a cop out for us to say, well, consumers need to demand it when they didn't ask for the system to begin with. And so then if we reimagine we, in industry and in supply chain is reimagine and the world that looks different than we can rebuild to that. Now it's not an overnight and it certainly sounds crazy and outlandish. But for now, thinking about the concepts and trying to develop this lens through which we see the world just in a different way. It's and I have had my colleagues come up to me and say, Oh, my gosh, I saw XYZ today. And I thought of you because of, you know sustainability related. It's that shift that if you can't unsee it, once you get your head around something, you'll start to see ideas and innovations and potential. And so for now, if we think in the supply chain world, this is an innovation tool set for your team. I'm not asking you to be 100% circular. But think about the goal of getting to one in five items need to be repaired instead of build new, that's often the number that's used to think about the climate change gap that we have is simply one in five items. So it's not perfect, we'd love to see more than that and to take care of our materials better. But that starts to feel easier. Somehow. We're just under one intent today. So it's about a doubling ish. And then you can have a whole new set of options to lead your team through what I think are very fun. Innovation discussions.

Pippa Shawley 18:48

Yeah, I mean, we've talked a lot about repair and a little bit about product or service. But we also say that there's no silver bullet in the transition to a circular economy. So what are some other things that supply chains can consider?

Deborah Dull 19:00

Absolutely. If a land of repair isn't in it for you, then think about the decisions that you own, independent of the business model and of the product. There's been a lot of discussion and totally fair of as a service business models are shifts there and of product redesign to use us materials or build them in a modular way so they can be better repaired, fair. But supply chain does own fully own some decisions. So for example, we often get to choose how we source and all the items that go into our process that isn't the final materials for the product. Now we have the seat at the table and we think about the materials we need for our product. But if we think about energy and water and packaging, the tertiary pallet type packaging, or the shrink wrap that goes around that. We own those decisions, we can influence network design, but that really doesn't happen. that frequently if we think about physically putting a facility someplace that has access to renewable energy, for example.

Pippa Shawley 20:07

And while this sort of innovation might not be seen by the general public, Deborah thinks it's fine. If the consumer never knows about it.

Deborah Dull 20:14

We pull off miracles every day to never be known. So the reason why nobody knew that our field existed for so long is because we were in the background doing like, Mission Impossible type stuff. And like, nobody knows that Tom Cruise saves the world all the time, like that's, you know, so that's kind of been our space. And that's been pretty awesome. Man, now we people kind of know who we are now. And which means we get to develop new skill sets, especially around storytelling and engaging the wider organisation. So I think the I said this already, I'm quite an optimist. I think the future is bright. But it's up to us really to make the changes. Now. Certainly, when we think about urban mining and getting our items back from users, consumers, whoever it is, there will be a behaviour change. But again, I'm a strong believer, and because I'm a supply chain person, and I was trained in process and making good processes, if given choice, they're going to choose the easiest path. And so if we truly want to change, then they need one choice, it needs to be the right choice. And that's it. So it's you know, the difference between cities who have commingling recycled bins that you put everything into one area, or those who don't. And I'm not saying that recycling, of course, is the answer here. It's the loop of last resort. But we think about how to go into a system and sit there and observe it and watch how people are already interacting with it. And then we can figure out how to change it. And that piece is while the designers are really important. And understanding user behaviour is really important. Also, though, the majority of materials and energy and waste are produced and used upstream in supply chains. So really, as supply chain professionals, we actually have a lot more power as professionals than we do as consumers. So if you are listening to this now and you know someone in supply chain, please go and share the good news that they their decisions we make in supply chain make a huge difference. And in some sometimes no one will ever know. And that actually feels somewhat familiar to us. In many ways.

Pippa Shawley 22:27

I absolutely love this image that you're the Tom Cruise of the business world. I love that. Absolutely right. I think maybe just to wrap up if if people are going to come away from listening to this episode with just a few things in mind, what would you love them to leave with? And maybe, even if they don't work directly with supply chains, what are some things that you can think about? Yeah, absolutely.

Deborah Dull 22:47

So I'll use this as a plug for our organisations have been working together these last several months to develop a white paper on supply chain. So that's out on the Ellen MacArthur website, also on the circular supply chain Network website. And there's a great fact sheet that the team developed that is just a couple pages that summarises how our circular supply chain is different than linear supply chains. But then also trying to take a practical lens to say look, this will not be easy. So we call out nine challenges that you can anticipate experiencing, which again, if we're in supply chain, that should feel normal to us. If you're not in supply chain, it's interesting to go and read those nine to see where you might be there and then go find a supply chain person. So the action if you are in an organisation that produces an item, go and figure out who your supply chain is. And now, this might take some patients supply chain is huge. We plan stuff, buy stuff, make stuff, move stuff. So you might find somebody who's a perfect match for you. If you're looking to have a getting to know you conversation, finding somebody who's a director or senior director or vice president type level of strategy, or of technology might be a good place to start because they have a good idea about what's happening across the entire organisation. So one, please go introduce yourself to the supply chain. And to then start getting curious about where your product comes from. If you have the luxury of having access to an intern right now, this is a really good internship project of like try to take our most used material, our most popular item, or maybe the the naughty, the bad kid product that you it's always causing you problems, you know, pick that and then work your way back and try to figure out how you can get all the way back to the planet. And it's going to be unbelievably difficult to do that. But that process should show us a lot about the way our networks are designed in a way our processes and our supply chains have been designed. So you can start to learn a little bit more and use that as a use case to talk to your supply chain. It's about so two items, please go figure out who this protein is. And on the other hand, just go get curious about where your stuff coming from.

Pippa Shawley 25:07

I think that's lovely. Go get curious, become the Tom Cruise of your industry, and really get creative as well. It sounds like there's so much opportunity there for people to really find better solutions than the things that they've been working in and for the last 5100 years, so, absolutely. Thank you so much, Deborah.

Deborah Dull 25:25

Thank you so much for having me.

Pippa Shawley 25:30

Thanks for listening to this episode of the Circular Economy Show. You can find the supply chain paper that Deborah mentioned in our show notes. We're also planning a mid season Q&A episode. So if you have any burning questions for the team at the Ellen MacArthur Foundation, drop us a line at podcast@emf.org Or if you're listening on Spotify, you can leave a comment in the q&a section of our show notes. See you next time.