Closing the Loop: Exploring the Circular Supply Chain Model for Sustainable Operations
A circular supply chain makes use of resources as long as possible. It minimizes waste at every stage, including design, distribution, and beyond. The framework of a circular business model can be used to create a sustainable business strategy. These sustainable business strategies are expressed as the 3Rs in circular business models: Reduce, Reuse, Recycle. Hence, the design and management of a network of businesses and end users that aims to minimize, maintain, and recover resources in order to achieve economic, environmental, and social benefits is known as a circular supply chain. The goal is to convert the supply chain from a linear (take-make-dispose) model to a circular (no-waste) one, supporting the circular economy, which is focused on sustainability and waste reduction.
It was predicted that environmental considerations and economic business solutions were given the highest priority based on this chart. Reusing, recycling, and using fewer materials, components, and products are all ways that economic factors can reduce costs for customers and the business. Social factors include resource sharing and reuse among community members, particularly between businesses, which improves interactions. Environmental effects reduce waste production and resource use.
How to Challenge Old Models?
It commonly produces a system that costs a lot of money and uses up natural resources. For example, Gold and coal mining, can damage ecosystems and disturb nearby communities. It takes a lot of energy to convert ore into steel, which releases carbon dioxide that warms the planet. The linear model produces material waste as a byproduct, which takes up space and might contain contaminants. Waste ends up in undesirable places. The so-called Great Pacific Garbage Patch is only the most well-known example of the widespread pollution of the environment by plastics. However, products like steel and plastic can be recycled, repaired, and reused to obtain potential benefits. A major factor is a completely circular economy with no waste and no new materials at all.
These are following factors of supply chain that needs in a circular model:
Drivers of the Circular Supply Chain:
Consumers stand out as one of the major drivers behind the circular supply chain in many cases. However, the majority of supply chains depend largely on governmental regulations in their effort to become circular supply chains.
Governments put limits on a variety of things in this regard. They specify which goods can be disposed of in landfills, which goods must be recycled, and which supply chains must use which techniques when departing from conventional procedures. To improve the flow of products at lower costs, supply chains needed to rethink how they collaborate. Third-party logistics companies consequently emerged to meet the demand and remove the risk of excessive competitive advantages in the linear supply chain. As a result, the old concept of recycling was given new life as a practical and essential element in the logistics sector.
Circular business model Benefits:
Conclusion:
Instead of producing an item and returning to the beginning of the chain with brand new materials, circular supply chains recycle unused fragments back into their value chains. In conclusion, circular supply chains support a zero-waste environment. Businesses can build infrastructure and supply chains that support effective reverse logistics. Transparency, visibility, innovation, and efficiency are the only requirements for companies and supply chains to move to a circular economy. Because of this, less environmental damage is imposed, and we can all contribute to creating a sustainable future and a cleaner planet.
Author: Sakshi Gupta