From Food Upcycling to Reusing Heavy Machinery, Businesses Must Rethink Everything
A circular supply chain is like a forest – nothing is wasted. Leaves fall, decompose and become nutrients for the next circle of life.
But can that analogy work in the supply chain world and the economy as a whole? Can we endlessly reuse, recycle and reimagine products?
Well, no. But technology and rethinking can move the world closer to that vision. And every step takes us farther from the “take, make, dispose” mindset that has dominated business for decades. Green logistics, which I just wrote about last week, can make linear supply chains more sustainable.
But green logistics is simply a gateway to sustainable supply chains, not the whole closed loop cascade. Circular supply chains are the ultimate in sustainability. From food upcycling to reusing heavy machinery, supply chains that adopt a circular model could rule the future.
But “going full circle” will face many challenges along the way.
So, What’s the Big Supply Chain Difference?
For eons, linear supply chains have formed the basis of manufacturing.
Cavemen picked up rocks to sharpen into spear points. Sumerians, Egyptians and Romans mined various metals for military use and jewelry: copper, tin, gold, silver and more. Edwin Drake struck black gold with the first commercial oil well in 1859 in Pennsylvania.
In linear supply chains, these forests, mines, wells, cotton farms, etc., produce raw materials. Manufacturing turns those raw materials into products. Consumers use those products.
Then, consumers throw those products away. All those natural resources are gone forever.
Well, except maybe in the distant future when we “mine” landfills. That idea has been around since at least the last decade. While I find it intriguing, landfill mining won’t scale up tomorrow.
Linear supply chain processes are highly efficient. But they do not account for long-term environmental impact. After all that effort to extract resources, we simply put them back in the ground again.
Going “full circle” means creating a closed loop that continuously reuses, recycles or repurposes materials. With circular supply chains:
- Product design focuses on longevity and recyclability.
- Manufacturing uses recycled or sustainable materials where possible.
- After using products, consumers return them for refurbishing or recycling.
- Materials re-enter the production cycle, reducing waste and the need for new resources.
Barriers to Going Full Circle
The benefits of circular supply chains are clear. And they are necessary for any transition to a circular economy. But the move won’t be easy.
As Khaled Soufani and Christoph Loch wrote in Harvard Business Review, challenges include:
- Current supply chain structure: Most supply chains are designed for performance and economic efficiency through specialization and centralization. This makes it difficult to implement recycling and remanufacturing processes.
- Complexity of collection: Gathering enough volume of specialized components for recycling can be expensive and inefficient, especially when you consider how far goods travel from their manufacturing site.
- Consumer preferences: The demand for high-performance products often outweighs sustainability concerns, making businesses hesitant to change.
- Economic trade-offs: Companies may need to sacrifice some economies of scale and reduce part specialization. Initially, this could result in slightly less advanced products.
How Brewing Byproducts Become a New Revenue Source
In many ways, supply chain operations are where business operations were in 2006. Back then, two Yale experts penned the book Green to Gold. Many pooh-poohed the idea as tree-hugging.
However, as time went on, business leaders changed their minds. Particularly since authors Daniel C. Esty and Andrew Winston provided examples from Wal-Mart, GE and Chiquita. Not exactly the Sierra Club and Greenpeace.
Nearly two decades later, many supply chain leaders view complying with environmental regulations as a requirement, not a path to profits. Reducing greenhouse gas emissions is the right thing to do.
In other words, it’s green. However, circular supply chains can blaze a path toward gold.
Reducing carbon emissions means using less fuel. Sustainable sourcing can optimize resources and mitigate risk. Reusing products and materials can cut costs.
Caterpillar designs products specifically for remanufacturing. Engine blocks have removable cylinder sleeves that can be replaced easily. Additive manufacturing techniques remanufacture components like cylinder bores. And Caterpillar offers lower prices but the same warranty on remanufactured parts.
Likewise, food upcycling, when possible, is a no-brainer. According to the USDA, Americans waste 30%-40% of the food we produce each year.
NETZRO is tackling this issue with proprietary equipment and technology. They transform food byproducts into new sustainable, nutrient-rich upcycled food ingredients at scale.
Breweries often pay to send spent grains to the landfill. NETZRO can upcycle them into ingredients for snacks, cereals and specialty flours. In fact, placing the upcycling machine in the brewery can transform that waste into a new revenue stream.
Talk about turning waste into something people want! That sound you hear is ka-ching. (For the younger set, that’s a noise from old-fashioned cash registers. Before you paid by swiping a credit card.)
When Green Meets Gold, Everybody Wins
Companies that make the successful transition win on all fronts, from corporate social responsibility (green) to profitable growth (gold).
Going full circle improves supply chain practices, reducing waste and conserving resources. Reusing and recycling materials leads to more efficient use of resources, reducing the strain on our planet. As environmental regulations tighten, circular supply chains help businesses stay ahead of compliance requirements.
Your bottom line sees cost savings through recycling programs. Your company spends less on new materials. In the age of inflation, that can mean a lot when dealing with inputs subject to severe price fluctuations.
Your marketing can lure eco-conscious consumers, increasing sales, customer loyalty and building a better brand image.
The very act of creating circular supply chains can drive innovation, giving companies a competitive edge. And recycling and reusing materials can help manufacturers better withstand supply disruptions, increasing supply chain resilience.
Strategies for Implementing Circular Supply Chains
To create a circular supply chain, companies need to rethink their entire operations. Design for remanufacturing is a good place to start. In other words, create products that you can later easily disassemble, repair or refurbish. This reduces waste, lowers costs and extends product life cycles. This approach also supports sustainability and resource efficiency,
In manufacturing, use recycled materials when making new products. And design products that create less waste in the first place. Additive manufacturing can be a boon to reducing waste. (See the Caterpillar example above.)
Be clear about your circular practices and work closely with suppliers to source recyclable materials.
Leverage technologies to enhance recycling and reuse efforts. And educate consumers so they understand the importance of recycling and how to do it properly.
The Big Shift Is a Worthwhile Endeavor
The transition from linear to circular supply chains represents a significant shift in how businesses approach production and consumption. While challenges exist, the potential benefits – both environmental and economic – make this a worthwhile long-term endeavor.
As technology advances and consumer awareness grows, expect more companies to embrace the circular model. Don’t wait to turn “green” practices into “gold” opportunities.
Related Reading
- Green Logistics Are the Gateway to Sustainable Supply Chains
- Yes, We Can Turn ESG into Gold
- The Circular Economy Can Boost Supply Chain Resilience
- How 5Ls Make a Western Hemisphere Logistics Hub
Jim Tompkins, Chairman of Tompkins Ventures, is an international authority on designing and implementing end-to-end supply chains. Over five decades, he has designed countless industrial facilities and supply chain solutions, enhancing the growth of numerous companies. He previously built Tompkins International from a backyard startup into an international consulting and implementation firm. Jim earned his B.S., M.S. and Ph.D. in Industrial Engineering from Purdue University.
Great information shared.. really enjoyed reading this post thank you author for sharing this post .. appreciated
Nice post. I learn something totally new and challenging on websites
Great information shared.. really enjoyed reading this post thank you author for sharing this post .. appreciated