Three ways to reduce plastic
Costas Xyloyiannis, CEO of HICX, the supplier experience platform, reveals his top ways to eliminate the pollutant
This month, as Earth Day highlights the need for environmental action, the world’s biggest businesses have an opportunity to consider their plastic footprints. It’s a focus for major manufacturers, many of which already have goals in this area. For example1 by 2025: Mondelēz International aims for a 25% reduction in rigid virgin plastic (vs 2020), Unilever is committed to using 100% reusable, recyclable or compostable plastic and Mars too is working towards 100% recyclable packaging.
Apart from protecting the environment, many also cut plastic to manage risk and growth. Businesses that don’t comply with plastic regulations are liable to reputation damage and fines, whereas those that do can enjoy happier customers and economic benefits. Either way, a business’s approach to plastic can impact its share price.
With profits and reputation at stake, ambitious goals to cut plastic must be hit. The teams tasked with this agenda, however, can struggle to forecast, budget and make quick decisions because too often they lack the accurate supplier data needed for these steps. In practice, unless businesses find a way to maintain good data, they risk missing plastic footprint goals.
It’s time, therefore, for leaders who want to cut plastic to deal with supplier data. Here are three steps to getting this done…
Know what you’re facing
In order for businesses to achieve their goals of using less, better or no plastic, they must rely on suppliers. For example, if the sustainability team needs to explore ways to make products or packaging more easily recycled, reused or composted, they might need to rethink designs and materials, and recycling infrastructure. This requires collaboration. Businesses need suppliers to provide their best ideas, information and products or services, if they want to make a meaningful difference.
Regardless of how much businesses need suppliers, though, they often struggle to work with suppliers helpfully. The underlying cause is often a lack of reliable supplier data, with which they can communicate effectively. If, for example, an employee has the wrong contact details for a supplier, they will have to go through the manual process of finding the right person, which wastes time. Or if someone needs to contact all the business’s suppliers in Europe who might use per-and polyfluoroalkyl substances in their packaging, they first need to know who all their packaging suppliers in Europe are. Struggling to identify all the right suppliers upfront means that some will miss the memo. The message may indeed also go to suppliers for whom it’s not intended and waste their time.
At the end of the day, poor supplier data frustrates the relationship that businesses have with suppliers. Given that businesses need suppliers to help reduce plastic, why aren’t they giving suppliers a better experience?
Encouragingly, some of the world’s biggest brands are creating the conditions in which this can be possible. Businesses like Unilever, Mondelez International and Mars are building a strong foundation of supplier data upon which they can offer suppliers a collaborative experience. These manufacturers, and many others, know they need to help suppliers to help them – because when suppliers receive a helpful work experience that’s built on good data, then they can support corporate goals.
Become a customer of choice
The way forward is to be viewed by suppliers as the “customer-of-choice”. Attaining this status is far easier if every supplier has a good experience serving their mandates. Imagine for a moment that a supplier has two customers who are equally as large and important. One pays them late, has unrealistic demands and never responds to queries. Whereas the other customer treats them as partners, pays quickly, believes in common goals and communicates well. If the supplier only has a limited number of solutions to innovate plastic-free packaging, who might they choose? Human nature dictates that the business which is nicer and easier to work with, would benefit in this scenario.
In fact, a recent HICX study showed that while 49% of suppliers would go the extra mile for their biggest customer, as many as 73% would make the effort if this was also a customer-of-choice
Tackle digital processes and people’s mindsets
How then, can businesses improve supplier experience? The answer is to make supplier data 100% reliable by digitally transforming the processes through which suppliers are managed. This involves establishing systems to capture the best possible information from suppliers and then keep it pure so that a single source of truth in data can be maintained.
By digitally transforming “from the data up” in this way, businesses can easily tell who all their suppliers are and what they’re doing. This means they can enable the digital workflows that make it easier to work together, such as reducing the number of systems to which a supplier must login, or letting them quickly check the status of an invoice or ask a question that they can trust will get answered. Treating suppliers like partners will help them – and therefore the business – reduce plastic.
The other way in which brands can improve supplier experience is by shaking up their mindsets. The old way of working, in which businesses expect the world of their suppliers while squeezing them on price and making unfair demands, is in the past. Today’s reality, largely driven by Covid-19, is that we need suppliers almost as much as they need us. Suppliers have a choice. When there’s competition for finite things like innovative ideas and materials that will help businesses reduce their plastic footprints, suppliers can choose who they go to. Businesses that want to be customers-of-choice by improving supplier experience, can start by viewing suppliers as partners in the same eco-system.
The end of the day, if businesses can keep their supplier data accurate by improving their digital processes and cultural mindsets, then they can unlock opportunities to work with suppliers towards the most positive plastic reduction outcomes.
By Costas Xyloyiannis
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