Materials & Packaging Circular Economy

6 Tips for Avoiding Recycled Materials Supply Chain Disruptions

Don’t wait until a breakdown happens to explore alternatives. Start evaluating your supply chain today and expand your recycled plastic sources to keep things humming no matter what the world throws at you.

Sponsored Content | / This article is sponsored by Oceanworks | By Rob Ianelli | Published 4 years ago | About a 4 minute read

Image: IKEA's Musselblomma collection is made from recycled plastics | El Mueble

It doesn’t take much to throw a stable supply chain into disarray. Manufacturers committed to utilizing recycled plastic must be extra vigilant to ensure the materials they need remain available in sufficient quantities at acceptable prices. To prevent hiccups, companies must do their due diligence — to get a full picture of where things stand and what might shake things up in the future.

Batten down the hatches

Every company relying on recycled plastic should be continually evaluating its existing supplier network to identify current gaps and potential opportunities for disruption. This review should cover as many facets as possible to reveal any and all operational risks.

In the case of recycled plastic, the country (or countries) where suppliers are located is a major area of concern. First and foremost, consider the current political and economic climates: New regulations, tariffs, and political upheaval can quickly destabilize what was previously a smooth operation. Today, COVID-19 is significantly impacting the flow of goods worldwide. Understanding how countries have responded to the crisis and tracking their current infection and hospitalization rates — along with any shutdowns or import restrictions — is critical.

Conducting a full SWOT analysis of each recycled material source can be a useful and eye-opening exercise. With the strengths, weaknesses, opportunities and threats identified, firms can make informed decisions to minimize risks and adjust their strategy to limit supply disruptions down the line.

Keep your eyes on the horizon

Manufacturers aren’t psychic, so they must rely on brands’ forecasts of future demand based on their products’ target market and usage. Communication is key: Giving your manufacturing partners and their recycled material suppliers as much advance notice as possible creates better outcomes and more reliable supply chains. Though estimates become less certain the further out you plan, providing transparency to suppliers regarding long-term material expectations will strengthen those partnerships and facilitate on-time delivery.

Identify capacity constraints

Manufacturers shouldn’t wait until demand surges to see what their suppliers are capable of in a crunch. They should get out ahead of any potential supply chain bottlenecks by regularly requesting capacity forecasts for preferred materials.

In addition, opening up the supply chain to more players can mitigate risk. Having multiple sources reduces the chance of a breakdown and provides quick scaling alternatives if a given supplier runs into constraints. Other ways to protect the supply chain include bonded warehouses in multiple geographies and financial hedging. Locking in prices and pursuing futures mitigates risk at high volume.

Anticipate customs issues

Some recycled materials, such as ocean plastics, are only available from a limited number of geographies, which necessitates material being shipped across borders. As a major hub for manufacturing, China is one of the biggest consumers of recycled plastics; and often, factories need specific recycled materials that are not available domestically. China, like many of today’s major recycled material importers, has strict policies regarding recycled materials to avoid importing trash. To prevent shipments from being held up or rejected in customs, manufacturers must be well versed in what’s needed before their first shipment.

Freight forwarders with direct experience with similar materials and destinations can offer a quick though pricey path to moving material without needing to learn the local recycled material import-export rules and regulations. But it is valuable for manufacturers to familiarize themselves to expedite the process.

Have a backup plan … and a backup plan for that

It is never a good strategy to have all your eggs in one basket — and when those eggs represent critical ingredients for a manufacturing process, it can be downright catastrophic. The best way to alleviate this risk is to line up multiple suppliers. Identifying secondary sources should be driven by material parameters, location and pricing. Whether they’re simply intended as a fallback for emergencies or they become an ongoing part of a diversified supply chain, the biggest hurdle to bringing on additional suppliers is matching the material parameters to avoid retooling and product variations.

In the world of recycled plastic, sampling is key to matching new materials with existing processes and manufacturing lines. By sampling from multiple sources early in the process, companies build a foundation to comfortably “flip the switch” and change their sourcing if a transition is required. Creating supply chain redundancy can prevent a minor setback from turning into a crisis.

Lean on experts

Getting the right recycled plastic where it needs to be isn’t easy, nor is finding reliable sources of quality materials. Using a network such as Oceanworks that pre-qualifies multiple sources to create immediate redundancy and facilitates samples and bulk orders can be a huge time-saver.