Supply Chain Circular Economy

Local or Global Supply Chains:
What's Best for Achieving Regeneration?

This journey requires a collective intelligence and a fundamental shift in mindset: a new way of thinking in which ‘global,’ ‘regional’ and ‘local’ are no longer in opposition. It also comes with a new challenge to generate ‘scale’ with positive impacts.

Sponsored Content | / This article is sponsored by CHEP, a Brambles Company | By Lachlan Feggans | Published 3 years ago | About a 7 minute read

Image: Johannes Plenio/Pexels

Can a conventional, vertically integrated supply chain be more regenerative than a decentralised model? Or is local more sustainable than global? And could there be another way?

Creating more sustainable supply chains is one of the key challenges in what is being dubbed the ‘decade of delivery’ on the UN Sustainable Development Goals (SDGs). Addressing social and environmental impacts within the business boundary is now a stakeholder expectation, but the supply chain is a different beast altogether. Currently, many organisations are grappling with the challenges of supplier engagement — around issues such as climate, human rights and material supply risks — as they adapt to a new paradigm of consumer awareness, action and investor activism.

This has implications for how organisations create value in the post-COVID world, especially as supply chain vulnerabilities have been uncovered during the pandemic. Prior to the pandemic, conventional vertical or horizontal supply chain integration strategies showed clear benefits in terms of overall efficiency, productivity and speed to market, but they also have some disadvantages. These strategies are quite common among large multinationals, while small to medium enterprises (SMEs) typically prefer a more decentralised supply chain with the clear objective of limiting or reducing their risk exposure.

But what is the best strategy for a regenerative supply chain? What are the fundamental pillars to establish one? And considering the experience gained through the COVID-19 pandemic, should supply chains become more localised or continue on a potentially risky global trajectory? Does, perhaps, the journey towards regeneration start with the local/global question?

A regenerative supply chain will first account for its negative impacts such as carbon, waste and resources use. It would then seek to restore, replenish and ultimately regenerate more resources than it requires resulting in a net benefit to people and the planet.

While there are plenty of challenges and uncertainties with this question, one thing is clear: the necessity to transform how we deliver products to people. The time has come to repair or invert the negative correlation between consumption and its impact on the planet (considering both environment and society). It is time to evolve from a degenerative model to a model that first seeks impact minimisation, then impacts neutralization — and, ideally, a fully regenerative model.

While not easy, some considerations can help initiate the process. First, regeneration should be intended more as a journey, an evolution over time — rather than a definitive, future destination. Secondly, when we speak about supply chain, we tend to think in ‘linear’ terms — visualising it as a chain taking us from point A to point B; this vision does not help in visualising its regenerative potential. This opens up an opportunity to reimagine the supply chain as a more circular process, a systems view including both resource extraction and feedback loops across both local and global scales.

This same question was recently raised during a conversation with Daniel Wahl, consultant and educator in regenerative development, whole systems design and transformative innovation. Wahl raised the concept of ‘supply ecosystems,’ allowing local and regional economies to flourish and build resilience without disconnecting from the global system.

“I would start by questioning whether the terms ‘chain’ and ‘supply chain’ are the right words to be used in the context of regeneration. Maybe we should rather speak of supply ecosystems, which are far more complex to establish and to manage than a linear supply chain,” he said.

Listen to the episode here.

This concept of ‘supply ecosystems’ is much more intricate because it involves creating a network of broader collaboration across different sectors and activities and, importantly, different scales.

Wahl says that our economic system is rooted in a competitive scarcity mindset, where global transactions undermine regional productivity. Examples he cites include ‘trade carousels’ — such as butter from New Zealand being cheaper than local butter in Scotland, or the UK importing roughly the same quantity of milk that it exports. The opportunity with a regenerative approach is to shift to systems of ‘collaborative abundance,’ which re-regionalise production and consumption systems — and, in doing so, enhance the prosperity of local and regional economies and social participation, while reconnecting production to the local or regional resource base.

This journey requires a collective intelligence that works on creating and preserving the well-being of local communities and the system as a whole. It brings a fundamental shift in mindset: a new way of thinking in which ‘global’, ‘regional’ or ‘local’ are no longer in opposition. It also comes with a new challenge on generating ‘scale’ with positive impacts.

The necessary progression towards a more regenerative economy is undertaken by linking the local, regional and global scales through powerful collaboration. In summary: Regionalise without replacing global supply chains, exactly as Wahl was commenting in our conversation: “We have to radically regionalise, but we still need to depend on global supply chains.” In time, this re-regionalisation will re-match community needs to bioregional carrying capacities while still relying on global trade for products not produced locally.

The pandemic has taught us a valuable lesson: Today, more than ever, we need to re-connect people with life’s essentials when they need them most. By focusing at a local scale, we can generate the new opportunities, better jobs and more fulfilling livelihoods. At the same time, we need to consider the global scale. This is all about shortening transport distances, improving efficiencies; and promoting low-impact, circular business models based on reusability, zero impact and resilience — models that truly enable more collaboration at all scales.

At my company, Brambles — a world leader in sustainable supply chain solutions — our ambition is to pioneer a regenerative supply chain, one which aims to minimise the usage and waste of natural resources while creating more value by replenishing natural resources.

The pathway towards regeneration at Brambles is outlined in our new 2025 Sustainability Targets — aiming to create more positive outcomes for society, the planet and our business. This means investing in reforestation projects with the aim to increase forest cover, drawdown carbon and enhance a region’s biodiversity. This approach recognises the need to replenish the raw materials — the natural capital — that we and nature depend on. Our products will become even more sustainable, going beyond zero by designing recycled plastic into our long-life circular products. This reimagines waste as a resource, recognising the single-use plastic problem and highlighting the innovative thinking and actions we need for regenerative supply ecosystems.

We also want to accelerate the transition towards a circular economy by applying our ‘share and reuse’ model and extending it to more participants in more supply chains. And at a macro level, Brambles is committed to the highest climate ambition — seeking a less than 1.5° global temperature increase, as outlined in the Paris Agreement. Finally, we will keep making a positive impact on the ‘S’ of “Social” to positively impact local communities.

Right now, we have more questions than answers — a lot of work and a long journey ahead. We are entering ‘regeneration’ territory — a new place unknown to us and many other companies. We concede we have a lot to learn. We will need to change our mindset and our way of operating to move from a leader in sustainability to an advocate for regeneration.

With this challenge in mind, we have invited other leaders and companies to join the conversation and understand what ‘regeneration’ means — in theory and in practice — and help define the pathway. Together with leaders such as Carol Sanford (a recognised thought leader in this area, author of The Regenerative Business and creator of the Regenerative Business Development Community), Daniel Wahl and Eric Souberain (VP of Nature & Water Cycle at Danone), we aim to make this conversation broader and bigger as we delve deeper into the topic of regenerative.

So, stay tuned for new articles and podcasts soon to be released in this series on Sustainable Brands™. Join us in this exciting journey!