How does a circular supply chain improve business sustainability?

Incorporating sustainable practices into your business is not only good for the planet, it can also boost your bottom line. More than ever before, consumers consider sustainability when choosing how they spend their money. According to a Nielsen report, 66% of consumers surveyed are willing to pay a premium for sustainable products.

As industries worldwide face increasing pressure from climate change, adopting a circular supply chain offers a great solution for many businesses. Companies can achieve greater supply chain resilience, substantial savings, and better brand recognition by future-proofing themselves in a global market moving towards sustainability.

What is a circular supply chain?

A circular supply chain is a system where products are designed, made, and reused to minimize resource use, decrease pollution, and reduce waste. A circular supply chain tracks and repurposes recycled materials for new products. Industries are increasingly adopting circular economy principles to promote sustainability.

What’s the difference between linear and circular supply chains?

The main difference between linear and circular supply chains is the reduced amount of waste created by circular supply chain processes.

Historically, much of the global economy has operated in a linear mode of “take-make-waste”. The goal was simply to produce, use, and then discard the product when it’s no longer useful. This linear supply chain is becoming less sustainable as climate change, political upheaval, and consumer demands play an increasingly impactful role.

Instead of wasting materials, a circular supply chain focuses on reusing and recycling materials, or refurbishing products, instead of throwing them into the trash heap. As such, a circular supply chain supports an economic model aimed at making the production and consumption of goods more sustainable.

Circular supply chains set a benchmark for sustainability because they involve sharing, reusing, refurbishing, repairing, and recycling existing materials and products to extend their lifespans. Discarded parts and waste can be transformed into building materials, and businesses can rely less on the consumption of non-renewable resources.

6 benefits of circular supply chains for your business

1. Increased efficiency and value

Creating a circular supply chain maximizes value in many key processes, ranging from sourcing and manufacturing to storing and transporting goods. Additionally, products re-enter the supply chain, gaining new life as new products.

2.  Savings opportunities

Reusing and recycling existing materials and goods can generate significant savings. Instead of sourcing new parts and materials, you can reuse and recycle when it's appropriate to do so. In some cases, used products can reenter the market after a quick refurbishment, offering a less expensive option than producing a new product from scratch. 

3. Supply chain resilience

Transitioning to products with multiple uses and incorporating recycled products can help to address supply chain disruptions that can potentially halt linear supply chains. As such, circular supply chains can be more adaptable and resilient than linear supply chains.

4. Reducing environmental harm

Some industries experience economic harm due to the environment rapidly changing and becoming less predictable and hospitable. For companies connected to those industries, thoughtful resource use can benefit their business now while progressing towards reduced environmental damage for both the climate and the economy.

5. Boosting your brand

More than ever, consumers and suppliers prefer ethical companies that prioritize sustainability. Companies that choose sustainability can reap the rewards of a more positive public option for their brand, boosting consumer and business relationships.

6. Future-proofing your business

Economic blocs around the globe continue to increase the push towards a more sustainable business environment. Staying ahead of this worldwide movement towards environmental sustainability can give your businesses a competitive edge over your less sustainable rivals.

What's your plan for business sustainability?

As industries worldwide face increasing pressure from climate change and consumer demand for ethical practices, adopting a circular supply chain offers a strong solution. Companies can achieve greater supply chain resilience, substantial savings, and improved brand reputation while ensuring they remain competitive and future-proof in a constantly changing global market.

Cole provides you with half a century of global shipping and freight experience as a full-service freight partner.

We align with how your company works, so when your supply chain operations change, we provide solutions tailored to help you adapt and thrive. Contact us today to learn more.  

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