Consumers are becoming increasingly responsible and are changing their habits in favour of the planet. People are taking steps to think about how they can modify their daily behaviours and purchasing habits to reduce climate change.
From taking their reusable containers for bulk shopping to abandoning silver paper for lunch or taking their used clothes for donation or recycling; consumers are increasingly joining the sustainable movement that is transforming the economy towards a circular economy.
Circular economy as a business opportunity
This is the concept that encompasses all actions, systems and processes in which resources are used and reused for as long as possible. The aim is to eliminate waste from each use cycle and to reduce business processes’ environmental impact. The circular economy is now considered a revolutionary reform that combines sustainability and economic growth.
For this to develop, the entire value chain must be rethought. It involves designing durable products, leaving out planned obsolescence that we see in so many sectors and making them with quality materials and certain specifications so that they can be kept in circulation for as long as possible. It also means opening new possibilities in the product life cycle such as shared use, as well as the recovery and regeneration of materials at the end of a product’s useful life.
This new landscape can have great benefits for the business environment and the planet. It has the power to diversify the industrial base, create jobs, attract investment, and help local businesses thrive. At the same time, addressing sustainability in a systemic approach.
Circular supply chains (CSCs): A new system.
Circular supply chains (CSCs) are supply chains that are designed to operate in a closed-loop system, where products and materials are continuously reused or recycled. The objective of CSCs is to minimize waste and maximize the value of the resources used.
They aim to keep materials in use for as long as possible by designing products that are reusable or recyclable, recovering and refurbishing products at the end of their useful life, and recycling materials into new products.
This whole new system is based on circular economy principles. It is considered a regenerative economic model that aims to keep resources in use and eliminate waste.
Benefits of CSCs for businesses and consumers.
Circular supply chains offer several benefits for businesses and consumers, including:
- Resource savings: By reusing and recycling materials, companies can reduce the need to purchase new resources and save money on raw materials, disposal costs, and energy consumption.
- Lower costs for the consumer as well: CSCs can help reduce the cost of products and services by promoting the efficient use of resources. Reducing the need to purchase new materials.
Patagonia: Their “Worn Wear” program invites customers to bring in their old Patagonia clothing for repair or resale. They also use recycled materials in their products and have created a closed-loop system for their supply chain.
- Access to sustainable products for the consumer: circular supply chains promote the development of sustainable and environmentally friendly products that are designed for reuse or recycling, which can provide consumers with access to products with a lower environmental impact.
- Improving resource efficiency: These types of chains promote the efficient use of resources, which can help companies reduce their environmental impact and improve their sustainability performance.
- Steelcase: The company’s circular economy strategy includes designing products for disassembly and reuse, using recycled materials in new products, and recovering and recycling old products at the end of their useful life. Steelcase also partners with suppliers to implement circular practices, such as the use of renewable energy and the recycling of waste materials.
- Waste reduction: By promoting materials reuse and recycling, circular supply chains can help reduce waste and minimize the number of materials that end up in landfills or in the oceans.
- Interface: The company has implemented a closed-loop system for its supply chain. They use recycled materials in their products and offer a “ReEntry” program in which they take back used carpet tiles for recycling and then use them to create new products.
- New business opportunities: Through the development of innovative circular products and services that meet growing consumer demand for sustainable and environmentally friendly products.
- Increased business resilience: Circular supply chains can reduce the risk of supply chain disruptions caused by fluctuations in resource availability, price volatility, and regulatory changes.
- Philips has implemented circular supply chain practices for its lighting products. They offer a “Circular Lighting” program in which they take back used lamps, recycle materials, and then use them to create new products.
- Improved quality of product or service provided: circular supply chains can improve product quality by promoting the use of durable, high-quality materials that are designed for reuse or recycling.
- Enhanced brand reputation: adopting circular supply chains can help companies enhance their brand reputation and demonstrate their commitment to sustainability, which can be a key differentiator in competitive markets
- Dell has implemented the “Dell Reconnect” program in which customers can bring in their old electronic devices for recycling, and then Dell uses the recycled materials to create new products.
Implementing circular processes is a great opportunity for companies and a challenge for logistics to adapt to the need for efficient and increasingly optimized movement of goods from our homes and businesses. Thus, overcoming the current production systems used to overproduction, waste, and planned obsolescence.
Today, business strategy is increasingly focused on efficiency, productivity, and the protection of the planet, so all sectors are looking for ways to respond to these concepts as quickly as possible. The traditional make, use and dispose of business model has become obsolete, and a modern organization must adopt a reduction perspective, both in terms of raw materials and energy.
Companies that do not start thinking circularly have no future in the new green and sustainable economy that is coming.