Designing Supply Chains for Circular
For generations, we have operated supply chains that extract materials from nature, in order to create products that shipped to customers. What customers did with those products and what happened after use, was hardly a consideration for supply chain teams. Customers just disposed of their products at end of life and that was dealt with by another supply chain.
The trouble is that we have become so good at that linear supply chain, that we are doing it at a scale, which is having materially adverse effects on our planet. When you produce in the millions and billions of units, you deplete the available natural resources and when you have the space constraint of planet earth, there is no ‘away’. Away has become our oceans and other places of natural beauty, that are suffering the effects of how we produce, consume and dispose.
There is no doubt that we need to change our approach to one which considers this whole cycle as a single circular supply chain
It is only when we look at our supply chain through this lens, that we can consider the fundamental changes that need to be made in:
- Product design and manufacturing – supporting repair, recovery, and reuse
- Sourcing – including recovered materials
- Product management across its lifecycle – extending the scope of the supply chain responsibility
- Prolonging the useful life of products – repair and refurbishment
- Recovering an inventory of products at the end of their life, and the harvesting of parts and materials
Many companies are already embracing the challenges and opportunities that the circular economy brings to supply chain. Among the opportunities emerging are new revenue models from managing product use across its life (product as a service). Extended engagement with customers is also emerging, along with value across the lifetime of a product and the availability of a rich new supply of materials, from an inventory of recovered products