#Supply chain #Sustainability # Circular economy #Reverse logistics
The over utilisation of natural resources required to attain economic growth and development has created a harmful impact on the environment and this is how the evolution of the circular economy came into existence. The development of an eco-friendly consciousness gave rise to an innovative economic system known as Circular economy.
There is currently no global consensus on what Circular Economy precisely means and implies. Several definitions co-exists today with different focus in terms of scope, objectives, measurements or aspects to consider. The following definition is well aligned with its systematic and holistic approach “A circular economy maximises the value of material resources and minimises overall resource use, waste , pollution and emissions”.
It can also be referred to as a circularity (or a cycle) , the spectrum from reusing to recycling, sharing or repairing resources to minimise any waste, pollution and carbon emissions. The main objectives of circularity are sustainable development, environmental quality , economic prosperity and the consideration of future generations.
The entire circular cycle study revolves around waste : whether it is a problem or a resource? If we prevent waste generation as much as possible by re-using , recycling and ending with disposal, then the waste is reformed or regenerated as a resource leading to minimising the amount of waste in the landfill.
The circular economy model is basically the reverse of Linear economy. Linear economy traditionally follows the “take-make-dispose” plan where raw materials are collected , transformed into a product and considered as a waste at the end of its lifecycle. On the other hand, the circular economy is a regenerating economic model that separates from the linear economy , replacing the concept of “end of life” by finding ways to reuse and maintain the resource and their value, extending its life cycle.
Circular economy is a model encouraging continuous reuse of resources or infrastructure in order to minimise waste to achieve a sustainable economy for the future. The waste materials or energy becomes an input for other processes either as a component of another industrial process or as a regenerative resource for nature.
Over the past few years , the concept has been shifted from “waste management” approach to “sustainable materials management” focusing on resource, environmental and human health impacts over the entire life cycle of the materials.
Circular Supply chain
Companies these days are putting greater emphasis on sustainability therefore it’s important to understand what a circular supply chain is . The term sustainability is nothing but an economic development activity which can be achieved only by protecting our ecosystem and preserving natural resources for future generations. There is also a push from European Union with their Green Deal programme:
Circular supply chain is a model which urges every actor (supplier,manufacturer , consumer etc.) within the supply chain to take the leftover resources and remake them for resale and reuse. The way a material is produced , consumed and discarded which will be reconsidered for a circular, sustainable supply chain. It can also be referred to the supply chain where the raw materials used are recycled back into the manufacturing operation.
Recycling/reusing the unwanted materials without a negative impact on the environment is considered as sustainability and the basic principle of a circular supply chain . For example :- Using parts of an unwanted wooden table by cutting it down into pieces and making a frame or a stool ,increasing the life of the material instead of burning the wood which would produce nitrogen oxides causing health and natural disasters.
Supply chain strategies can be an essential element in enhancing sustainability since they can make available new sourcing strategies. Circular economy is a feedback system that tries to minimize the inputs of resources as well as the generation of waste into the environment by making use of reverse logistics. Though supply chains in a circular economy appear similar to conventional supply chains (a linear sequence from suppliers, manufactures, and distributors to the user), there are some differences such as
- In a circular economy, products are designed to last longer and to be reprocessed in some manner once their life cycle is complete.
- The collection of used products for various reprocessing helps to gather the exact resources composition of a product in terms of type, quality, and quantity, which allows determining its reuse and recycling value.
The circular perspective about supply chains underlines four layers to the reverse logistics :
- Maintenance : Ensuring serviceability of a product, including its upgrade and closest location for maintenance.
- Reuse : Transfer of a product from one user to another through its collection, storage at the distributor, and delivery.
- Remanufacture : The manufacturer refurbished major parts and added new components for the parts that cannot be repaired if necessary and re-introduces into the supply chain.
- Recycle : Collecting various materials so that they can be used in the (re)manufacturing of new products.
Utilising the circular supply chain model makes products more useful once they are damaged or not in use, instead of further drenching them in the landfill and causing environmental damages further allowing materials to retain as much value as possible and by producing much less waste.
“The circular economy creates an ecosystem of materials. What was previously viewed as waste now has value ” — Sarah Watt
Circular supply chain is the philosophy of the circular economy offering a new compelling perspective to the supply chain sustainability domain.
ProdTrack, an immutable digital supply chain solution has specialised in increasing traceability of circular products across its lifecycle, forward and reverse logistics alike.
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