Secrets for circular supply chain partnerships from Interface and Aquafil
Secrets for circular supply chain partnerships from Interface and Aquafil
Mon, 06/29/2020 – 02:00
It’s an enviable alliance that has outlasted most marriages. For two decades, Interface and Aquafil have worked together to close the loop on carpeting, an example that other companies have followed.
The carpet maker and the nylon supplier moved long ago past the early steps of engagement and strategy. They’ve innovated on raw materials, resulting in Aquafil’s Econyl yarn that it recycles from ghost fishing nets, carpet fluff and other would-be waste. They’ve co-launched pilot projects that have reshaped their supply chains, including the Net Works program, which pays fishers in the Philippines and Cameroon for turning in castoff nets used to create new nylon. They’ve expanded their markets and slashed carbon footprints along the way, cementing reputations as innovators.
What are the secrets for the successes of this longtime collaboration between Interface and Aquafil? A virtual GreenBiz event June 23, “How to Get Your Supply Chain to Embrace Circularity,” moderated by GreenBiz co-founder and Executive Editor Joel Makower, revealed insights.
Buying 100 percent-recycled nylon from Aquafil has helped Interface reduce the carbon footprint of its carpet tile by 69 percent. Learnings from this partnership also helped Interface to move forward with other initiatives, such as being able to count recycled or bio-based ingredients in 60 percent of the material used in its carpeting and 39 percent of its luxury vinyl tile, the latter of which took only three years to achieve.
It’s not easy to be ahead of your time
“When I see a landfill I see a goldmine,” Aquafil Chairman and CEO Giulio Bonazzi told a banker in 2008, pitching his circular vision for using waste materials instead of oil to produce nylon yarn. “The guy was so shocked he jumped out of his chair, I’m not kidding, and said, ‘I will not give you one penny.’”
Ten years earlier, Bonazzi was on the other side. When he heard Interface legend Ray Anderson position Interface as a regenerative company by 2020, he thought the man had lost his mind. Eventually, though, something tugged at Bonazzi. He began to find value in that audacious goal, a notion that eventually led Aquafil to collaborate with Interface on common working teams to tackle one problem at a time. The companies share a long-held desire “to engineer a product with the end in mind just like nature does,” as Bonazzi put it.
For Interface, the journey was a solo one that began back in 1994. That’s when founder Anderson set “Mission Zero” goals to remove negative environmental impacts by 2020, an ambition that largely has been achieved. These include three goals of a zero carbon footprint, zero use of virgin materials and zero use of chemicals of concern, in addition to the “reuse or re-entry” of materials in each of Interface’s markets.
The company took this commitment a step further by applying these same metrics and goals to its suppliers in what it called the Suppliers to Zero program. Reaching out to suppliers to get them on board took Interface a great deal of creativity and early consciousness raising.
How can other companies find success in winning over their suppliers toward eliminating the very concept of waste in their products?
Moving toward circularity is a tough sell if the concept is new to certain stakeholders, but know thyself and consider data your friend, urged Interface vice president and CSO Erin Meezan: “Look at your components individually so you can target your first steps toward what’s most material.”
For example, in the early steps toward its Mission Zero path, a life-cycle analysis blamed nylon for being Interface’s largest environmental impact. In 1996, the company began working with suppliers toward using nylon produced from waste. Aquafil, in the meantime, fine-tuned a depolymerization process that it says sidesteps the use of toxic chemicals or dyes, relying largely on a food-grade catalyst to help separate waste material from nylon.
Interface eventually unveiled its first recycled nylon carpet tile, using Econyl, in 2010.
No-cost or low-cost ways to get the conversation going with suppliers include simply meeting with them, Meezan noted. Interface invited suppliers into its factories for sustainability summits in 2003, showing off practices that suppliers themselves could mimic. It raised awareness during these events and in other conversations, which included suggesting relevant webinars and other resources.
Interface also requested new types of data from suppliers that often never before had been asked about the carbon footprint of their products. That introduced a new lens through which to view their approaches.
As for higher impact results, Interface early on promised bigger purchases for suppliers that ramped up their recycled content.
How can the business case be made?
“What we did with suppliers is share what we had learned about our own footprint and how we did that analysis,” Meezan said. “That was our best weapon and the best capability we had.” For Interface, 92 percent of its products’ environmental impacts come from raw materials. Knowing such figures is the first place to start, she added. “Data is really your friend, being able to map out for the senior leadership team how important your supply chain is.”
Next, if you’re thinking of pitching something ambitious, start small. Don’t overwhelm stakeholders with a major reinvention of complex systems. Instead, consider a pilot project. “It’s a way less threatening way to pitch a senior leader,” Meezan said. And while a pilot keeps both the targets and the opportunity for failure modest, success can encourage new possibilities.
Finally, don’t forget to bring strong examples of supply chain progress and innovation to senior leadership. Interface was the first carpet maker to use Aquafil’s Econyl, now widely used among competitors, too. Yet it’s common for arguments to spring up internally over when to open up an innovation to the greater industry, she said.
Meanwhile, years ago Aquafil attempted to spark a parallel partnership toward circularity with its own supplier, a chemical giant. Once again, Bonazzi said he was laughed at and told he would fail.
“Basically they were not happy, they were feeling more a competitor than a customer and made a big mistake,” he said.
Today, Aquafil is selling the solvent-free nylon processing technology that it created back to that supplier.
Bonazzi didn’t change suppliers, in part because he didn’t need to. The very nature of the progress Aquafil helped to advance with Econyl shifted the sourcing needs away from big petroleum. Instead, a widely distributed crew of fishers, carpet collectors, waste pickers and post-consumer material suppliers including Gucci and Stella McCartney have become primary suppliers.
“Instead of oil, we use waste,” he said.
For Aquafil, the costs of regenerating nylon initially were more expensive than for the process of producing virgin-oil nylon, but no longer. Bonazzi noted that it’s important to look at price trends over the course of several year when considering an innovation of this nature instead of reading too much into a recent rock-bottom price for petroleum.
“If you take into account all the costs, sustainability is never too expensive because if we pay the cost of landfilling or incinerating or the raw material we take from the planet, the actual costs are much higher than the costs we are paying nominally,” he said.
Both Bonazzi and Meezan noted that their customers are far more savvy than a decade or two ago about the fact that the cost of raw materials doesn’t reflect the negative effects caused by extracting them from the earth in unsustainable ways.
Ahead of the times
What happens when your circularity efforts are ahead of what most consumers are demanding?
Interface and Aquafil have found themselves in the position of consumer educators, which requires ongoing diligence.
For example, Interface’s sales personnel bring the message to potential customers about why products designed for circularity make for greener, low-carbon buildings. In the last five to 10 years, Meezan has found these efforts amplified by an adjustment in popular sentiment led by advocacy from the likes of the Ellen MacArthur Foundation. Circular messaging by fashion companies such as Gucci, Prada and Stella McCartney — all Aquafil customers, by the way — have helped too.
Despite speed bumps in the early days of figuring out nylon recycling, Bonazzi said the market and customers have been supportive along the way. He said working with a client with exacting sustainability standards, such as Interface, brings far more benefits than headaches.
“They challenge us a lot but also the most challenging clients are the ones making the best products,” he said. “The more challenging the customers, the better they are. We work together to learn how to be better companies. This is really what we are trying to do.”