Has your business considered transitioning into a circular or closed-loop economy? If your business has yet to hear of these production models, this post will provide a brief detailing of how these models operate in comparison to their linear counterparts in addition to the benefits that a closed-loop economy can provide to a business. This information, coupled with the most important steps of integration, is an excellent foundation for businesses hoping to make the change.
First it’s important to understand how this model operates. A circular economy’s main identifying aspect is its closed-loop supply chain. A simplified way of explaining this is that throughout production in these models, little to no waste is created. Every input is able to be reused, recycled, shared or repaired at some point within production. Therefore the waste produced is minimal considering the fact that what would otherwise be considered waste is really just an input imperative in the creation process.
With green initiatives for businesses becoming more and more popular, research has indicated that the closed-loop economy model will contribute upwards $4.5 trillion dollars globally by the end of 2030. Domestically, this model is shaking up the production landscape. Even local businesses are seeing increased customer loyalty, a more positive public recognition and less of a need for external suppliers as a result of this model. With the number of businesses turning to this strategy increasing, environmental implications can be reduced, and more raw material can be saved; thus further benefiting businesses and their customers.
Making It All Function
Prior to fully realizing a closed-loop economy, a business must be willing to work towards a closed-loop supply chain. This requires a rethinking of a number of processes for businesses. Whether that be the packaging or design of products, the way in which they’re manufactured, and even the way their products are sold. Each part of the process must introduce a way for the ‘waste’ to be refurbished and recycled. This becomes easier as more businesses collaborate and participate within a closed-loop supply chain.
As mentioned previously, a majority of companies don’t follow a closed-loop supply chain. Instead, they operate under a linear economy model. These models are rather wasteful as the raw materials used to design and create various products aren’t capable of being saved or repurposed. Each creation cycle requires a fresh set of raw materials, meaning these businesses are very reliant on their raw material suppliers.
Businesses are much better off operating under a closed-loop economy. Very cyclical in nature and impervious to creating waste means these are capable of reducing manufacturing costs all while producing more sustainable products for consumers. If this model is something that interests you or your business, be sure to take a moment to read the infographic featured alongside this post for more valuable information. Courtesy of Quincy Recycle.