Are you a business owner or manager with a struggling supply chain? You may have heard of a closed-loop economy before, but perhaps you weren’t sure of how it operated or how it could benefit your organization. Look no further, as this post and accompanying infographic will detail one of the most sustainable supply chain models to date.
This model gets its namesake from the way in which it operates. Closed-loop refers to the lack of waste that is created as a result of the production throughout the model. Each input that is used is reused, recycled, shared and repaired in such a way that it becomes reusable. Therefore, reducing what other models would consider waste, by classifying it as a reprocessed resource that can be used in the creation process once more.
Just how popular has this model become, though? Global estimates have positioned this model to be worth upwards of $4.5 trillion dollars come the year 2030. Regardless of how far your organization’s reach is throughout the globe, your business can still benefit from utilizing this supply chain model. Some of the benefits experienced by organizations have been increased customer loyalty, improved public reception and a massive amount of savings over the long-term as a result of a reduced reliance on external suppliers. The trick is, this model truly shines when more and more organizations look to utilize it. Namely because the overall reliance on raw materials will continue to decrease, therefore having less of an environmental impact.
Applying The Model
In order to establish a fully realized closed-loop economy, organizations must come together and establish a closed-loop supply chain. Which means that every organization involved will have to rethink just how their products and the packaging of these products is designed, manufactured and then sold. However, what becomes more difficult than that is determining how these products will be refurbished and reused after their use.
The sad truth is that most organizations today fall under the linear economy model umbrella. Meaning the raw materials these organizations used to design and manufacture their products are largely wasted as they’re not created with sustainability in mind. Unfortunately this also means that in order to recreate these products, fresh raw materials must be sourced if they’re available.
This is why the closed-loop economy model is such a stronger alternative to the linear economy model. There is no such thing as an end for any of the materials used in the closed-loop processes. Just a continuous recycling of use. This is undeniably the most effective way for companies to reduce their manufacturing costs and their reliance on external suppliers. Doing so then allows them to create the most sustainable products for their customers. For additional information on how this model operates, be sure to review the infographic accompanying this post. Courtesy of Quincy Recycle.