A majority of business owners and managers are likely aware of what a circular economy requires out of their business. Though it may require a bit of investment, the benefits certainly outweighs the costs. What most businesses struggle to understand is how to both incorporate the model into their current processes, as well as how to enable it to be as effective for them as possible. This post will detail the way in which the model functions as well as how it can benefit a number of different businesses.
A closed-loop economy has also been referred to as a circular economy. The main identifying aspect of these models is the closed-loop supply chain they employ. These economic models are meant to produce little to no waste as every input will be reused, recycled, shared or repaired at some point within the process. Waste production is minimal, as what would be considered waste in other models is looked at as a resource meant to be utilized once again throughout the creation process.
Businesses have actually begun to adopt this model much more regularly than in the past. Research has indicated that the model will be worth nearly $4.5 trillion dollars by the end of 2030. While this figure may represent the world as a whole, domestic companies are continuing to see the benefits that this model can bring. An increased sense of customer loyalty, more positive public reception as a result of refined environmental concern, in addition to long-term savings for the company due to the reduced reliance on external suppliers. As more and more companies establish their closed-loop economies, raw material supplies continue to be protected and environmental impact continues to decrease.
Breaking Down A Closed-Loop Economy
The makeup of a closed-loop economy is fairly simple: create a closed-loop supply chain. Meaning rethink how products and packaging are designed and manufactured from a more cyclical approach. How can these products be sold, refurbished and reused? As more and more businesses join a closed-loop supply chain, the ability to save raw materials continues to increase.
As it stands, a majority of companies don’t follow a closed-loop supply chain. Most companies follow a linear economy model. In these models, raw materials are used to design and create various products and very little is able to be saved or repurposed. The creation cycle must begin anew, with fresh raw materials. This is where a closed-loop economy shines.
A closed-loop economy would look something like this: consume raw materials, collect the inputs, process them, design and manufacture the products, and then once more consume these raw materials – so on and so forth. Very cyclical in nature, and unwavering in regards to creating waste. These models reduce manufacturing costs all while producing more sustainable products for consumers. For more information on this topic, be sure to check out the infographic attached with this post. Courtesy of Quincy Recycle.