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March 08, 2016

Building a Circular Supply Chain for a Circular Economy

In this day and age, it's simply not enough to state a claim of corporate social responsibility. We need to effect change. A company concerned with sustaining its marketplace must take action, and one practical jumping off point is supply chain analysis. Aim to transform your supply chain from a linear (take-make-dispose) model to a circular (no-waste) one, contributing to what's known as the circular economy – one focused on waste elimination and sustainability.

What is a Circular Supply Chain?

A circular supply chain is one that keeps resources in use as long as possible. One that reduces waste at every stage, from design to distribution and beyond. One that is creative and mindful of the bigger picture. Think of it as a more widespread and impactful relative of lean manufacturing. The graphic below, courtesy of Tradeshift (who won The Circulars' Digital Disruptor Award in 2015), might help you visualize the circular supply chain. It's important to note that re-use/repair comes before recycling in this flow. Because recycling can be an energy-intensive process, identifying re-use opportunities first can save a sizable amount of energy in the long run.

Click the image to view larger.

the-circulars-circular-supply-chainImage via TheCirculars.org

Why Does a Circular Supply Chain Matter?

If corporations fail to act soon, we'll face major consequences worldwide, from growing carbon footprints to further ozone depletion and lost dollars as a result of widespread waste. The situation calls for mass overhauls and industry-wide reform. However, it's not all gloom and doom. Some companies are taking the lead and tackling the issue head-on. 

One company making strides is Netherlands-based Dutch aWEARness, which has created its own barcode-enabled, track-and-trace system to follow clothing through its entire lifecycle. Once a consumer has finished using an article of clothing, s/he returns it to the company, where the eco-friendly materials are repurposed, drastically reducing waste. Dutch aWEARness makes corporate uniforms as well as streetwear.

Learn how to get started here: 4 Steps to Building Your Circular Supply Chain [Infographic]

In addition to establishing a product recycling program and working with natural materials, companies can utilize sustainable energy sources during the manufacturing process. Investment in renewable power and fuels in 2014 was up 17 percent over 2013, according to the Renewables 2015 Global Status Report by REN21. Using renewable energy, including hydrogen, solar, wind and biomass power, is one approach corporations and nations are taking to address this crisis. In fact, the REN21 report also states, "renewables outpaced fossil fuels for the fifth year running in terms of net investment in power capacity additions...due in part to a boom in solar power installations in China and Japan, as well as to record investments in offshore wind projects in Europe."

This is significant progress, but we still have a long way to go; supply chain analysis is a good first step for a company interested in sustaining not only its marketplace, but the world at large.

3 Ways Wearables are Reshaping the Supply Chain
How to Implement the PDCA Cycle [Free Template] 

5 Tips to Diversify Your Supply Chain
5 Tips to Reduce Supply Chain Risk 
8 Must-Have Building Blocks for a Robust Supply Chain

FREE White Paper: Contract Manufacturing: The Good, The Bad, and The Solution

Filed Under: Supply Chain Management