The supply chain structure has mostly stayed unchanged since people began creating and delivering items to one another. Raw resources enter, are transformed into a product, and are subsequently dispersed and utilised until they are eventually discarded. In other words, the circular supply chain optimises a product's lifecycle: rather than materials ending up in trash, they are returned to start a new journey in the supply chain. If this isn't practicable, alternative improvements to the product or process can be made to reduce waste and carbon emissions. This linear supply chain has kept economies humming, but the circular supply chain is gaining steam as a new, more profitable supply chain model. The circular supply chain is a business concept that promotes products, producers, and dealers to repurpose abandoned materials. The old "take, make, and throw away" paradigm is an economic dead end that is costing firms money as they deal with rising raw material costs and unpredictability.
"Sustainability is definitely not a trend—it's a thing, and everyone should be very much focused on it." —Sam Gilks, Senior Supply Chain Manager, Young Foodies.
Is it really needed for the industry?
It's a new supply chain model because, by its very nature, it meets a need that firms are frantically attempting to address and it turns many previously held beliefs on their heads. Trash has value in a circular supply chain. Where waste is generally considered as a flaccid, a circular economy turns it into a resource. This is a resource that will result in more products.
According to the Circularity Gap Report, just 8.6% of the global economy is circular, and more than 90% of materials harvested and consumed do not return to production cycles.
"The circular economy creates an ecosystem of materials," commented Sarah Watt, senior director analyst with the Gartner Supply Chain practice.
What drives the circular supply chain?
Consumers are frequently cited as one of the main driving elements for the circular supply chain. Consumers are making more informed decisions. Today's shoppers desire access to more detailed product information, such as where a product was made, how it can be recycled, and other details about its lifecycle. Consumers are increasingly considering sustainability when making purchases.
Most supply chains, however, rely significantly on government rules to move towards a circular supply chain. In this sense, the government places restrictions on a variety of items. They specify which products may be disposed of in landfills, which must be recycled, and which methods are necessary for supply chains that deviate from typical operations.
People are becoming more aware of their personal ecological responsibilities. New restrictions have been enacted in several jurisdictions to reduce consumer waste, prompting customers to be more aware. Furthermore, consumers have experienced product scarcity and are finally understanding that ecosystems are flimsy and resources are restricted. Material shortages are exacerbated, and natural resources are depleted, by the linear supply-chain paradigm.
Thus, it will take time to transition to a genuinely circular economy, but momentum is increasing, and some businesses are already prioritising circularity in their business plans. Instead of further overloading landfills and losing all value, business strategies like the circular supply chain make things more useful once they've been broken. New technology and circular business models are essential for enabling a circular economy, yet they are insufficient. We must also be responsible and involve customers in order to hasten this shift. Only 8.6% of the economy is circular. That means there are plenty of opportunities for enterprises to adopt circular methods to reduce material consumption, which reduces carbon emissions—the circular economy is predicted to have a 39% reduction in emissions potential.
Author's Detail:
Kalyani Raje /
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With a work experience of over 10+ years in the market research and strategy development. I have worked with diverse industries, including FMCG, IT, Telecom, Automotive, Electronics and many others. I also work closely with other departments such as sales, product development, and marketing to understand customer needs and preferences, and develop strategies to meet those needs.
I am committed to staying ahead in the rapidly evolving field of research and analysis. This involves regularly attending conferences, participating in webinars, and pursuing additional certifications to enhance my skill set. I played a crucial role in conducting market research and competitive analysis. I have a proven track record of distilling complex datasets into clear, concise reports that have guided key business initiatives. Collaborating closely with multidisciplinary teams, I contributed to the development of innovative solutions grounded in thorough research and analysis.
