07 July 2025
The circular economy model aims to minimise waste and maximise the lifespan of resources by keeping materials and products in use for as long as possible. It's an alternative to the traditional linear "take-make-dispose" which focuses on recycling and sustainability. The circular economy approach aims to reduce waste and pollution, promote efficiency and lead to a more sustainable economic system.
Now that you know what the circular economy model is, read on to find out how this model is used in supply chains with this Q&A with our regional managing director at IPP, Andy Maddock.
How are circular economy principles being integrated into supply chains?
Only nine per cent of businesses in the global economy can transparently demonstrate their engagement with the circular economy – the eco-system designed to keep products and materials in use for as long as possible. This is done through a strategy of building robust supply chains which boost productivity and efficiency, while at the same time reducing waste, reusing materials and regenerating natural resources rather than the traditional ‘take-make-waste’ model.
IPP is one of Europe’s leading poolers of sustainable wooden pallets through our ECOnomics model of re-use, recycle, repair and repatriation. We have worked tirelessly with suppliers as equals to share their vision, as well as good and best practice. This has helped build sustainable and collaborative partnerships based on trust and open book relationships to leverage value for all. The discussion is no longer about simply reverse logistics, but bigger-picture thinking around the entire process.
Sustainable wooden pallets utilising a pooling or leasing model move billions of items through multiple supply chains every day. From the sustainably grown saplings that create the pallets, through manufacture, repair, repatriation and re-use, IPP’s assets are among a unique class of products that truly operate in the circular economy.
What are the benefits of a circular economy model to manufacturers, retailers, 3PLs and consumers?
The constant and perpetual use and reuse of supply chain assets in a cost-effective and efficient way reduces time and cost and boosts productivity to make sure the right products are in the right place at the right time and at the right price.
At the same time, it cuts inefficiency and downtime – reducing millions of hours, miles and metric tonnes of carbon emissions by eliminating redundant journeys. This in itself optimises journeys and reduces further wear and tear on vehicles. Each link in the supply chain is a key top and bottom-line beneficiary of the circular economy.
What other organisations can businesses partner with to support the move towards a circular economy model?
The ECOnomics model which IPP champions is not created in a vacuum. It requires collaborative partnerships throughout the supply chain to realise its full economic and environmental benefit. From manufacturing production to packaging, repair, recycle and repatriation, there are no weak links. Every supply chain partner is supercharged on the promise of optimisation and ensuring low cost and low impact delivery from field to final mile.
What types of goods are most suited to being recycled, upcycled, resold or reused?
Reusable and sustainable packaging is an obvious focus for IPP. The challenge is ensuring transparency of assets through the supply chain to make sure they are always in the right place at the right time to maintain the circularity of the model. Any industry where the raw materials are largely or wholly sustainable in terms of recyclability or re-use can engage with the circular economy.
How can digital technologies like AI and IoT help companies to track and improve their circular supply chain initiatives?
IPP is rolling out active IoT trackers in its pallets with the target of creating a fully digital supply chain, enabling total track and trace of its assets.
This venture sees a combination of the oldest supply chain solution, the humble wooden pallet, and the latest iteration of technology that allows for the networking of devices to connect, interact and freely exchange data to help optimise the distribution and retrieval process.
Pool efficiency depends on the three-way relationship between pool size, dwell time and transportation. We had noticed many customers have more RTIs in stock than they need which meant assets were not being fully optimised.
Using IoT improves our optimisation and connectivity and therefore reduce inefficiencies, costs and the overall environmental impact.
How can governments and authorities support businesses in the transition to a circular economy?
Governments and authorities should educate and incentivise business to adopt and adapt circular economy practices. This could be financial in terms of tax relief on environmental practices that meet strict and auditable government objectives of sustainability.
This does not have to be a long-term investment but a one-off incentive as the transitioning business would soon realise its own cost and environmental savings, as well as building stronger collaborations with trusted suppliers.
It would be a kick-start project for the greater good of the economy and the planet. Businesses need and want certainty – they won’t invest on charitable whims, but supported business initiatives with a strong ROI will always win the day.
Governments can also help businesses reduce their admin burden and cost by supporting with regulations such as ISPM 15 – the rule which requires heat treating of pallets and other packaging materials used in international trade, to help prevent the spread of pests and diseases.
IPP using the circular economy model
If you want to find out more about how we adopt the circular economy model at IPP, or if you would like more information about our pallet pooling services, then please contact us.