If you’re a long-standing business owner or manager, you’re likely already aware of what a closed-loop economy entails. Despite realizing the innate benefits this model provides, a majority of business owners and managers are unaware of how to effectively incorporate the model intro their business operations. This post and featured infographic should ease the transition for these businesses through detailed information regarding the functions of the model and how it positively impacts business operations.
Before highlighting these functions and their benefits, it’s important to clear up the naming conventions of these strategies. A circular economy, which has also been referred to as a closed-loop economy, is an economic model that repurposes the ‘waste’ that organizations produce. Meaning there truly isn’t any waste in these organizations’ productions. Everything in the production process is reused, recycled, shared and or repaired. Which is why these models have earned the names they have, as the supply chain would look closed off and cyclical rather than linear.
As more and more companies turn to green initiatives, this model has seen an increase in popularity. With estimates suggesting its contribution to the global economy being around $4.5 trillion globally come the end of 2030, it’s hard to deny its popularity. Even businesses that don’t operate on a global scale can benefit from integrating this model into their operations. Whether that be increasing customer loyalty, a more positive sense of public recognition as a result of a green initiative and even a decrease on the reliance of external suppliers. The more businesses that transition to this model means less and less environmental implications, meaning more raw material can be saved and businesses can further benefit.
Here’s How It Works
Establishing a closed-loop economy requires businesses to work together in order to create a closed-loop supply chain. Which means that more and more organizations have to reconsider how their products are packaged, designed and manufactured as they’ll need to find a way to reuse what was once considered waste. Meaning they’ll also have to reconsider how they sell their products, how they refurbish and how they recycle their products. The more businesses willing to collaborate within a closed-loop supply chain, the more raw material can be saved and thus reused within the production processes.
Unfortunately, as it stands, most companies follow a linear economy model. Within this model, a great deal of raw materials are wasted within the production processes. Meaning they’re unable to be reused, which requires new raw materials to begin the process over again. This is where a closed-loop economy truly shines. There is no endpoint meaning the consumed raw materials can be endlessly reused after correct reprocessing. This is the key to producing much more sustainable products for both the environment and consumers. Integrating this model can be tricky, so for more information regarding how to do so, be sure to check out the featured infographic coupled alongside this post. Courtesy of Quincy Recycle.