While many COVID related delays are still impacting local and global supply chains, businesses are looking for ways to adjust their production processes to recycle their inputs when available. Many businesses made this change pre-COVID, to a production model known as a closed-loop economy. Within these production models, raw material inputs are used in such a way that they’re able to be recycled and used again throughout the process. While this model is extremely beneficial to the production industry at large, it can be troublesome to adapt. This post will detail the ways in which a closed-loop economy and closed-loop supply chain operate and how you can integrate these models into your business.
Before a breakdown of the way these models are applied, it’s necessary to understand the value that they offer to a business involved in production of any product. When integrated correctly, these models facilitate a circular economy, or a production process that eliminates all waste. Rather than producing outputs that require wasting inputs, this model reuses, recycles and repairs anything considered to be waste. Through this upcycling, what would otherwise be considered waste is put back into the production cycle to be used again; creating a closed-loop supply chain.
When a closed-loop supply chain is achieved, every business involved in the production process benefits. Which lays credence to the level of popularity this model has been garnering over the past few years. With global estimates positioning this model to be worth upwards of $4.5 trillion dollars come the year 2030, it’s clear it’s providing value. 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.
How Your Business Must Adjust To Make This Model Work
In order for a closed-loop economy to truly operate at its highest level, an organization must first find a way to make their supply chain closed-looped. This means businesses will have to rethink how their inputs and other steps of a production process can be retooled to never produce waste. This extends all the way from design to packaging of products. Luckily, as more and more businesses do manage to adjust their processes accordingly, raw materials used in these processes are more efficiently saved and reused.
The businesses that have yet to adapt to this new model and way of thinking continue to operate under the linear economy model. This model gives no thought to the massive amount of raw materials waste created by these organizations. Unfortunately this also means that in order to recreate the products they specialize in; fresh raw materials must be sourced. These aspects are what allow the closed-loop economy model to shine in comparison to the linear economy model. There is no such thing as an end for any of the materials used in the closed-loop processes. This is the key to sustainability in the production industry, and if your business was interested in learning more about the ways they can make the model work, be sure to continue reading on to the infographic shared alongside this post. Courtesy of Quincy Recycle.