Circular Supply Chains

Why Circular Supply Chains?

In the past decades our supply chains have been focusing on highly efficient processes to transform raw materials into products, distribute these to customers, and conveniently dispose of after use. But these linear supply chain practices are not sustainable.

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We are extracting metals, minerals and oil from the earth, and we are clearing our forests for wood extraction or land for farming. By doing so, we are depleting natural resources and destroying natural ecosystems.
We are extracting metals, minerals and oil from the earth, and we are clearing our forests for wood extraction or land for farming. By doing so, we are depleting natural resources and destroying natural ecosystems.
Materials and parts travel the globe, and energy intensive processes are used in multi-tier supply chains before a product leaves factory, leaving lots of waste and a significant CO2 footprint behind.
Materials and parts travel the globe, and energy intensive processes are used in multi-tier supply chains before a product leaves factory, leaving lots of waste and a significant CO2 footprint behind.
Products travel from production sites via DCs and retail channels before they reach users across the globe, resulting in massive need for packaging, inventory and transportation.
Products travel from production sites via DCs and retail channels before they reach users across the globe, resulting in massive need for packaging, inventory and transportation.
Users consume ever more, wanting latest and newest products, embracing convenience of single use. Replacement for new is more convenient than cleaning or repairing.
Users consume ever more, wanting latest and newest products, embracing convenience of single use. Replacement for new is more convenient than cleaning or repairing.
At the end of use, products are conveniently disposed of, and they typically end up in landfill or incineration.
At the end of use, products are conveniently disposed of, and they typically end up in landfill or incineration.

Call for action in supply chains

Supply chain managers are challenged to mitigate the CO2 impact and secure the supply of raw materials. They are taking initiatives on transport, energy reduction, green energy, waste reduction and packaging, but unfortunately the impact is marginal if the linear material flow continues. Recycling is an opportunity to recover materials, but despite great developments in technology, recycling rates are still limited, energy efficiency is low and recycling costs are high.

So, we need to develop other methods to increase the effectiveness of the materials in the products that we use. In a Circular Economy we are reducing the need for materials, we enable efficient and extended product use, and we recover products, parts and materials after use. This opens a new and exciting scope for supply chain management. In Circular supply chains it is no longer about pushing materials and products in a one-directional linear chain. Instead, the focus is on keeping products, parts and materials in use and in circulation.

Circular Supply Chains enable the re-use of products and materials

Chains to Circles identifies four main processes in a circular supply chain:

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The user is triggered to take circular action. Examples of such signals are contamination, empty battery, preventive maintenance signal, malfunctioning, wear and tear, outdated, not needed anymore or replaced by new.
The user is triggered to take circular action. Examples of such signals are contamination, empty battery, preventive maintenance signal, malfunctioning, wear and tear, outdated, not needed anymore or replaced by new.
Assessment or triage to define the circular action that retains maximum value. This can be done by the user, service technicians, circular service providers or the manufacturer.
Assessment or triage to define the circular action that retains maximum value. This can be done by the user, service technicians, circular service providers or the manufacturer.
Re-processing the product or materials to enable a new use cycle, e.g. cleaning and testing, maintenance, upgrade and repair, refurbishment, parts recovery, material recycling or regenerative processes.
Re-processing the product or materials to enable a new use cycle, e.g. cleaning and testing, maintenance, upgrade and repair, refurbishment, parts recovery, material recycling or regenerative processes.
Products are used again by the same user or are resold and redistributed to other users. Recovered parts are re-used in repaired or refurbished products. Recycled materials are used again in new products.
Products are used again by the same user or are resold and redistributed to other users. Recovered parts are re-used in repaired or refurbished products. Recycled materials are used again in new products.

The size and complexity of the circular loops can differ, depending on product characteristics and business models. Cleaning for re-use or simple repairs can often be conducted by the end users, whereas more specific or complex reprocessing activities may require local, regional or even global services, which can be provided by the manufacturer or service providers. Critical success factor in the circular supply chain design:

• convenience for the user to enter the product into circular supply chain
• efficiency of collection, sorting, triage and reprocessing activities.

When a company is transitioning to circular business models, supply chain is a critical enabler. The full circle needs to be supported, which requires a scalable circular value chain design with adequate processes, systems, service providers and a transformation from a linear to a circular mindset.

Chains to Circles advises in the design of circular supply chains, the development of the circular processes and the transformation from linear to circular.

Chains to Circles supports companies to develop and scale circular Supply Chains and enable circular business

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