The textile and fashion industry is one of the most polluting industries in the world and it needs to become more circular. Effective and efficient logistics practices in conjunction with post-consumer used textiles plays a crucial role for that. Sweden and Finland are two countries with high innovation pace and requirements on sustainability performance in this context. Learnings from these countries hence hold a key for improved industry performance.
Circular material flows of post consumer-used textiles typically involve activities such as collection, sorting, storage, transportation, repairing, recycling, and second-hand sales. These flows are currently organized and managed by a large number of different actors, including retail companies, second-hand retailers, and sorting companies. In Sweden, Finland, and other Nordic countries, charity organizations play a major role, but there is also an increasing number of commercial players participating in these flows. Together, they constitute a complex ecosystem of actors with an increasingly important role for the industry’s overall sustainability performance.
From a logistics perspective, circular textile flows present many classical logistics challenges but in a new context. Some examples that become evident as the volumes in these flows increase are as follows:
Customer-oriented collection: Currently, more than half of the textiles consumed each year are thrown away as household waste, and there is hence great potential to increase collection volumes and by that make them available for reuse- or recycling purposes. We have long talked about ”convenience” in customers’ online purchasing processes (last-mile logistics), and now it is time to continue reviewing how convenience can be developed in conjunction with donation and collection (first-mile logistics). In particular, there is a need to create a larger range of collection opportunities that satisfy customer preferences.
Cost-effective logistics flows: As volumes increase in circular flows, cost-effectiveness becomes increasingly important, especially considering the already fierce competitive situation where virgin materials and labor costs in connection with linear production are very low. Costs for handling, transportation, and storage play a crucial role in creating profitability in circular flows. Local flows need to be coordinated with complex global ecosystems to maximize the value from the collected textiles, requiring a well-functioning logistics structure. Another issue is the fact that many circular business models rely on handling and storage of unique products (e.g., pricing or photography for online sales), which complicates standardized processes that contribute to economies of scale and cost-effectiveness.
Use of new technology: One way to create cost-effectiveness is to leverage new technology, such as increased automation. This is especially important in connection with the labor-intensive sorting of textiles in the recycling flow. In Sweden, for example, there is a commercial actor, Sysav, which uses near-infrared and visual spectroscopy (NIR/VIS) in its facility (SIPTEX) to sort textiles by fiber type and color.
Managing material flows: Increased automation, not the least in sorting, introduces new types of logistics challenges. Large-scale automated sorting has several similarities with process industries where a smooth and predictable inbound flow of materials is important to ensure a steady ”production” and utilization of machines. Large-scale sorting into different fractions also highlights the need for the design and configuration of the entire subsequent supply chain. In general, this entails increased requirements for adequate inventory management, forecasting, and information sharing throughout the supply chain.
System analysis: Another logistics-related challenge, for example, in conjunction with introduction of new circular business models, is the ability to conduct a system analysis to ensure that the costs and environmental impact associated with transportation and handling do not exceed its benefits. An essential question that is increasingly being asked is whether different circular business models are truly environmentally ”good.” What energy consumption or carbon emissions are caused, for example, by clothing rentals that require multiple transports and washes? In addition to environmental impact, the total logistics costs may also need to be analyzed more carefully. Generally, many system analyses today tend to overlook many of the logistics activities that arise in circular material flows, so it is important to add a logistics perspective when conducting this type of analysis.
Erik Sandberg
Professor
Linköping University
Sweden
erik.sandberg@liu.se
