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Supply Chain is Circular - What Does that Mean? Featured

The supply chain is one of the industries that the world cannot live without considering the critical role it plays in ensuring humans get their needs regardless of where they come from or where they are. As growth continues being felt in the supply chain, various innovations continue coming in to improve service provision and reduce the misuse of resources. One of the latest attempts is to make supply chain circular. But what is a circular supply chain? According to Gartner, a circular economy is an economy that encourages reuse as a way of ensuring economic growth. As natural resources continue dwindling, recycling is one of the widely championed initiatives expected to ensure minimum waste of resources. So, circular supply chain is where recycling and reuse of scrapped products is advocated.

Recycling and reusing products has become one of the newest and hot topics in the world today. This is happening even as every industry seems to venture into this practice. A quick search in Google shows how many businesses are now coming up with the sole purpose of making raw materials from existing goods. As a way of embracing this practice, many organizations and industries are now encouraging complete reuse of materials as a way of not only minimizing waste but also an approach towards ensuring a clean environment and reducing consumption of raw materials.

The old is new

With a circular economy, what would have initially been seen as useless can be reused, and value created out of it. In online marketplaces such as Craiglist, some companies that deal in recycled products are making their primary objective selling old equipment such as printers, hard drives, and machines. Some of these items can fetch insane value when recycled, then correctly used. As such, the circular economy can thus have a significant impact on consumers and markets.

In the past, raw materials moved linearly. It entailed the movement of materials from suppliers where they were transported to an assembly or manufacturing plant. After the manufacturing process or assembling has been done, the finished products or parts would then be moved in the supply chain to distributors who then deliver them to the customers. This depicts the point-to-point approach where end products after their lifetime or when they are no longer needed end up in the trash.  Today’s supply chain has changed this by connecting the beginning and the end of the chain of supply. This results in a circle whereby after products or parts have reached their end of use, they are recycled and turned into something different that later is returned to the supply chain. This has been crucial in improving the sustainability of companies and at the same time, conserving the environment.

The circular supply chain is nature-friendly. It eliminates waste and reduces the carbon footprint, that is a known pollutant. Apart from this, the circular supply chain passes benefits to traders, and their partners since one man’s trash is another person’s treasure. That describes everything to do with the circular supply chain where products that originate from waste can be resold. Often, byproducts are reclaimed, ensuring that companies develop new sources of revenue from products that could have been discarded in the past.

With the help of technology, organizations can now move quickly towards this kind of economy. Despite the lack of a single technology that can help in the achieving this, it has become clear that combinations of different technologies can yield better results that would improve the circular supply chain. Some of the technologies that have proven helpful already are 3D printing, machine learning, big data analytics and the Internet of Things (IoT). In the coming years, this approach to the supply chain will, without doubt, get the attention it deserves and generate more revenue.

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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