What Are Circular Supply Chains and Why Are They Important?

A circular supply chain offers organizations an opportunity to reuse ostensible waste materials and aims to convert product waste into new products through the process. This is a change from more typical linear supply chains, where manufacturers discard product waste. Circular supply chains offer an advancement in sustainability and environmental opportunities.  

Since 2020, rising costs and lack of access to raw materials have forced manufacturers to find inventive ways to continue production, resulting in a transition from old processes into new ones that offer savings and greener supply chains. The looping process provides benefits in the manufacturing process—lowering shipping and production costs and decreasing the amount of material discarded into the environment. The results ensure less waste, higher profits and a reduced impact on our environment. A win-win for everyone.

The closed-looped system, shown in the model here, helps organizations operating under strict government waste and recycling regulations gain an advantage over competitors and access to consumers who prefer environmentally friendly products.

Additionally, the circular economy concept means opportunities to use current equipment and infrastructure differently and for extended periods, reducing emissions and maximizing outputs. This holistic approach does require a transition from the linear models but is worth the effort, as it also reduces regulatory requirements, avoiding potential penalties from regulatory controls. Effective planning, reviewing, analysis and oversight can ensure a new approach to processes that ultimately translate into new products, lower costs, new revenue streams and customer growth, while supporting green concepts. Modern times demand new conceptualization, and recycling adds many benefits to the supply chain for businesses and the economy, creating more effective methods when limited resources are available.