The Deposit Return Scheme is a global headache for the drinks industry…

But smart thinking can solve the compliance hangover.

The deposit return scheme is a well-meaning, planet-saving initiative. Over 40 different countries have signed up to it. But there’s a snag. Countries are signing up to multiple variations of the same international law. Here in the UK, for example, there are different interpretations – and even contradictions – between our four nations. It’s a global, bureaucratic nightmare.

How can drinks companies keep track of such confusing international legislation? How can they implement solutions to a law that is so complex and time-constrained?

To find the answers, Robert Baldock (the MD of Clustre) interviewed the founder of Pivot… one of the smartest and most respected forces in the world of enterprise software.

Robert Baldock:

“Let’s start by setting the scene. Why is the deposit return scheme so important? Post-Brexit, does it really impact the UK’s drinks industry?”

Chris Chittock:

“Obviously, since Brexit, the UK doesn’t have to comply with EU legislation. But, for companies selling drinks products in EU nations and internationally, there is no immunity. The laws – and the penalties for breaking them – are painfully real.

Lost sales. Punitive fines. Permanent reputational damage.

This is an inescapable reality right across the world. There are now 42 countries operating a deposit return scheme. Many more will follow. Multinationals are now under extreme pressure to comply. This is a time and business critical imperative – but building a solution is far from easy…”

Robert Baldock:

“Given the size and scale of the challenge, this is a golden opportunity for SAP and the entire enterprise software industry. There must be plenty of ready-made solutions. Rather than reinvent the wheel, surely your first priority must be to research the existing market?”

Chris Chittock:

“Yes, we looked at the ready-baked solutions to see if these could be leveraged. But they were all country-specific solutions. There was no scalable, reusable, built-in versatility.

And there’s a profound reason for this…

Governments don’t understand – or even consider – the practical challenges of embedding new laws into business processes. Lawmakers set their own rules. And their own unrealistic deadlines. Implementation is someone else’s problem. The deposit return scheme is no exception. Companies are being left with no time to develop flexible, global solutions – so everything is rushed and country specific.

This is crazy. It’s tunnel-visioned and untenable. Multinationals cannot afford to repeat this endless reinvention across the world. Someone had to break the mould.”

Robert Baldock:

“Marching to a different beat, is never easy. So, who persuaded you to become a mould-breaker… and what were you looking to achieve?”

Chris Chittock:

“The ‘who’ part of your question is easy. We work with many of the multinational ‘drinks’ giants. And one of them approached us to develop a deposit return solution for the Republic of Ireland.

That was our starter challenge. But it wasn’t our final goal. We became fascinated by a much bigger question: could we build a core solution capable of scaling?

The conventional ‘big consultancy’ approach would be to design a monster solution for all conceivable legislation. But monster solutions also have monster appetites for resources, time, and money. We were working to tight deadlines and even tighter budgets – so our imperative was to build a fast, cost-effective, core solution. A robust foundation we could flex and develop to meet any future legislation needs, anywhere in the world.”

Robert Baldock:

“You set out to build a time-critical solution for one country that will also work across the world, in a regulatory climate that’s constantly evolving.’ That’s a hugely ambitious goal. Walk me through some of the technical challenges.”

Chris Chittock:

“Well, they certainly aren’t trivial!

One of the first and most fundamental issues is that virtually all the existing deposit return scheme solutions are now being developed in the cloud. But not all companies – especially those just starting on their SAP S/4HANA cloud journeys – have the capability to use cloud solutions. SAP’s own deposit return scheme is a case in point. It has been developed solely for the cloud and simply will not work as an ‘on-premise’ solution.

So, right from the ‘get-go’, we were determined to build an answer that – whether in or out of the cloud – would deliver consistent results. And then we hit another problem…

There’s no consistency of regulation.

Every nation sets its own rules. There’s no one-size-fits-all solution. The global mission is to recycle around 95% of aluminium and plastic bottles, but that figure can – and does – vary between countries. It’s complex and messy. Some nations include glass bottles in their legislation; others don’t. Some have their own specific requirements and timetables. And some are much more mature in their approach to setting sustainable goals.

Robert Baldock:

“Clearly, this is a massively complex undertaking. For anyone setting out to build a deposit return scheme solution, what would be your key advice?”

Chris Chittock:

Start by asking all the right questions… and reach out to all the right people.

In the past, Pivot was often used as an emergency service . We were brought in to rescue enterprise software projects that were in serious difficulties. Time and again, we traced the core reason for failure to a basic lack of project clarity and understanding. If you don’t define the needs and concerns of all key stakeholders – at the outset – projects will hit difficulties and derail further down the line.

Deposit return scheme projects must include and involve all the key stakeholders… heads of sustainability… finance… tax…marketing… sales… packaging… supply chain & logistics… retail partners, and many more. Reach out to all of them. Understand their issues and perspectives. If you don’t invest time in talking to every vested interest group, you will shortchange the end result.

This is our mantra. When time is critical, make time to talk to every key stakeholder.

Robert Baldock:

“That’s a powerful message.

But, talking about end results, am I right in thinking this isn’t the endgame? I hear there is more legislation heading our way…”

Chris Chittock:

“Much more – and it’s going to impact every area of manufacturing in the UK.

Digital Product Passports, for example, will be massive. Very soon, every manufacturer and retail brand will have to detail the exact origin of their raw materials. Food producers, for example, will have to identify the precise animal and farm of origin, on all their packaging.

Navigating this bureaucratic minefield will be immensely challenging. But the thinking we have invested in the Deposit Return Scheme will play a vital role in developing these advanced enterprise software solutions.”

__________________________

Chris Chittock and her Pivot team bring a unique mix of skillsets to a very complex legislative climate. They are SAP specialists with a greater depth of experience than virtually all other practitioners. Just as importantly, they have a deep knowledge of country requirements across the world… a proven ability to communicate with and win the respect of key stakeholders… and an extremely agile approach to changing markets and legislative forces. They are widely regarded as the ‘go-to’ supplier of choice for the drinks industry.

To learn more about Pivot, please contact me for more insights and a personal introduction to this remarkable company. Robert Baldock on 07768 402131 or robert.baldock@clustre.net

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