Fixing the Recycling Supply Chain: A Blockchain Solution
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The changing economic landscape of domestic recycling opens many opportunities for growth in business. Recyclers can now use information technology in operations management to gain key insights into their daily procedures and transactions that can lead to pivotal reductions in operations costs and growth in top-line figures.Every day, companies, governments and municipalities publish statistics on recycling rates. Yet these measurements are often inaccurate because the system behind it is broken and disconnected. Each operation in the recycling supply chain is only able to confirm their own data, using packing lists and trading transactions. Nothing public exists to protect and support the recycling activity of the haulers, transfer stations and recyclers. These businesses have no honest exchange of information that allows them to communicate within the supply chain. The issue of recycling begins with well-meaning consumers who do not know what bin to use or are confused by the ever-changing laws. Their mistakes at the curb become contaminants that fall on haulers and material recovery facilities to solve. The blame for these high contamination rates is cast up and down the supply chain, causing unease in our struggling recycling system. Recyclers across the country are trying their best but cannot prove their efforts without a unified system that is immutable and factual. Haulers live in constant worry about contamination and the effects to their bottom line. Little financial spread is available to improve recycling education. To meet ever-growing demands, we need a system that unifies the entire supply chain to turn waste into marketable material.
Data Analytics: Optimizing Daily Operations
Recycling operations have made significant strides in the past two decades. The U.S. EPA reports that recycling in 2017 reached its highest numbers ever in terms of both tonnage and diversion rates. That being said, we all recognize the sudden 2018 shift in international commodity markets and the toll it took on all recyclers, limiting a once diverse material acceptance list and affecting daily trade around the world. In this new global market, recyclers are looking with renewed interest at their revenue streams, operational costs and material flows to make calculated business decisions in order to avoid downsizing.
Blockchain: What Is It?
In the past decade, the idea of blockchain as a verification platform has spread from its use in Bitcoin to applications in other economic sectors. Its popularity in technology comes from its ability to safely validate private data transactions. Essentially, a blockchain is a secure, shared database in which each connected computer adds new rows of information that are immediately verified and protected from manipulation. Once on the blockchain, general transaction details (such as time and date) are available for viewing, but private information is not included. Technically speaking, a blockchain is a distributed ledger comprised of users, called nodes, that uses third-party verification and cryptographic hashing to securely validate each datapoint entered by a node. Each time a new line of private information is entered onto the ledger, it is converted into a new and unique identifier, or “hash”, and represented on the ledger only by this hash. Since all the nodes are sharing the same hash data records, if someone like a hacker tries to alter or add false information, this change is immediately noticed by the other nodes in a way similar to a domino effect. This characteristic of blockchain guarantees that data entries are immutable and unbiased.
Blockchain Applications in the Recycling Industry
In recycling, blockchain-backed reporting provides the trust that is currently missing between the public, producers and recyclers. By ensuring that transactions happening between multiple parties are trustworthy, each user of the recycling blockchain receives indisputable verification of their recycling activity. With each action guaranteed using recorded, data-derived proof, it begets a lot more confidence for recyclers to report their waste diversion rates and contributions to zero waste goals. Having publicly available certified procedures will not only increase the chances of winning contracts from sustainability-oriented governments or companies, but will also gain consumer trust. Ultimately, it will increase recycling rates and consumer confidence.
Looking Forward: Efficient and Verifiable Recycling Supply Chains
The changing economic landscape of domestic recycling opens many opportunities for growth in business. While the timelines for municipal recycling goals and corporate recycled content targets are narrow, recyclers can use information technology in operations management to gain key insights into their daily procedures and transactions that can lead to pivotal reductions in operations costs and growth in top-line figures. In an economy that increasingly values sustainability, many operational efficiencies also positively impact the environment: reducing vehicle idling time and empty loads, maximizing material throughput and reducing contamination levels all reduce the strain on the environment by lowering company emissions and increasing waste diversion rates. By validating this sustainability and recycling activity on a blockchain, recyclers can certify their recycling behavior to concerned customers, governments and other public onlookers. These new public-facing benefits will support more business innovations by proving that what is good for business can also be good for the environment.