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With the ever-increasing cost and scarcity of raw materials, wouldn't it be nice to offset that expense in some way? The old way of doing business, the linear supply chain, where raw materials are produced into goods and then simply shipped to the consumer is still a rather standard model. However, more and more companies are beginning to move towards more environmentally and economically-friendly circular supply chain models.
This concept, while not really new, is the way forward for all industries and will ensure a bright future for production and consumer needs. While adjustments still have to be made to perfect the circular supply chain model, as more companies adopt this style of business, the transition will quickly become easier for everyone as trial and error fall to the wayside over time.
In this blog post, we are going to take a deeper look at some of the ways a circular supply chain model is the key to future success in the logistics industry.
Already know all about circular supply chains and want to start building your own? Our team can help you!
Much as early man's solution to carrying more than his body would allow, was a round object, so too is the solution to the future of the supply chain industry.
The circular supply chain model utilizes advancements in recycling and reusables in order to keep raw materials from wasting away in a landfill when they could potentially be made into something else. With a circular model, the resources needed to keep production moving are in abundance and inexpensive.
Keeping cost down just makes plain old good sense and will make you wonder why we haven't been doing this longer! Making this system work efficiently, it requires minor changes from both manufacturers and consumers alike.
However, both stand to benefit greatly.
Non-repairable and disposable items used to be the order of the day, but more and more people are looking for things that can be serviced and put back into operation for many years to come.
This is, in some ways, sending the industry back to an older time when replacement parts and repairman education was the norm. However, serviceability is something that has to be designed into products and may require a few alterations to current production tasks.
But as we have mentioned, it also requires a certain amount of extra parts to be made and sold as readily available replacement parts for broken equipment. And this is where reusable and recyclable materials come into play to benefit the industry as a whole.
By focusing on reusability, a lot of waste can be avoided in the long-run, which means less financial waste as well!
One of the biggest components of this system has got to be consumer responsibility and there is of course far beyond any businesses' control. Although you cannot directly control it, that's not to say that companies could not influence users with things like information campaigns, product rebates, and incentives for returning used goods to authorized recycling locations.
This is, of course, at the discretion of every company and is not the standard as of yet.
The weight really falls on each and every person who purchases your product to make sure that it stays in rotation. Currently, it appears that societal trends are slowly making their way towards a greener future, so this issue may indeed continue to slowly resolve itself naturally.
Working together we can benefit both industry and the environment in one stroke!
As mentioned earlier, the industry will see more benefits than just helping with environmental impact, especially in sectors such as e-waste. The gold, silver, and other precious metals acquired from recycling keeps the cost for new production much lower. There is also a trickle-down effect that beneficially impacts the entire supply line.
Reclamation centers will see more business and be able to expand and in turn handle a larger amount of product. Shipping will also see a boom in the number of routes needed to return recycled material to production hubs. And then there are the maintenance companies that will benefit from an increase in serviceability and availability of replacement parts.
As it is no doubt clear at this point, the circular supply chain model is by far the best way to move forward in all industries. Outside of any other potential benefits, it serves the needs of the industry for continued production and lowered cost.
It certainly appears that with the direction the industry is headed, it is time to consider rounding out your previously linear supply model! The Redwood team is here to help you get started.