The linear supply chain model has been used in the world for a long time. This model assumes that once a product is created, it goes straight to the end user and ends as waste. There is no return trip or recycling of materials involved. This outdated model creates incredible amounts of waste and pollution because of all the resources used to create products that are only used once before they’re thrown into landfills or oceans. Fortunately, an emerging option called a circular supply chain has better environmental outcomes than traditional linear ones (which companies should consider adopting).
The World Has Been Following the Linear Supply Chain Model for a Long Time
The linear supply chain model is old and inefficient. It wastes time, money, and resources; is not sustainable; does not consider environmental impacts, and does not support social responsibility. As a result, warehousing and distribution companies have been moving away from the linear supply chain model for years.
Circular Supply Chains are an alternative way of thinking about the relationship between raw materials and finished products. By using circular design principles in production processes (rather than linear ones), companies can save money by reducing waste and reusing materials in new ways that reduce environmental impact while being socially responsible to their employees.
How Does a Linear Supply Chain Work?
A linear supply chain is like a one-way street: it goes from raw materials to manufacturing to end users and eventually to waste. At each step of the process, a lot of waste is generated. For example, if a manufacturer creates a product with defects or doesn’t meet quality standards, they have no use for it and send it down the line even though it could be recycled or repurposed into something else. This creates more pollution and wastes resources that could otherwise be used elsewhere in the loop.
Linear supply chains also aren’t sustainable because they don’t create value for society. Instead, they create negative externalities such as pollution, which negatively affect people’s health and well-being. Additionally, linear supply chains aren’t good for communities because they don’t encourage local production but rather global trade, creating greater inequality among nations due to the uneven distribution of capital assets.
Circular Supply Chain
A circular supply chain creates a positive impact and value for the environment by having the product reused by other people.
This is done through various processes that involve reuse, recycling, composting, and more. A circular supply chain is like a one-way street: it goes from raw materials to manufacturing to end users and eventually to waste. Companies often use this process to reduce their carbon footprint and impact natural resources such as water or forests.
Circular Supply Chain Model
The circular supply chain model focuses on reducing waste and increasing the lifespan of products. This model is more sustainable than the linear one, as it minimizes resource depletion and lets businesses compete with each other in a mutually beneficial way. The circular supply chain is called “cradle-to-cradle” because it encourages a closed loop for materials rather than an open loop where resources are extracted from nature or another source and disposed of when they’re no longer usable.
In a Circular Supply Chain, Companies Must Use Reusable, Recyclable, or Compostable Products
A reusable product can be used again in the same way as before. For example, a coffee cup is made of plastic and can be reused when you wash it out after drinking coffee. A recyclable product can be broken down and reformed into something new. Recycling involves recycling paper into new sheets of paper, glass bottles into new glass bottles, metal cans into new cans, etc. Composting involves breaking down organic matter so that it becomes food for plants and soil (and other living things)
Companies’ Treatment of Customers Needs to Change Dramatically to Match This New Model
Companies must be more transparent about how they treat their customers, employees, and the environment.
If you are unfamiliar with the term “circular economy,” it is essentially a system where the waste from one product is used to create another so that nothing goes to waste. For example, PepsiCo uses sugarcane as an ingredient in its Gatorade product; however, it also uses sugarcane to bottle its Dasani water product. This method allows PepsiCo to be more efficient with resources while also helping them meet consumer needs by offering more choices regarding what kind of drink they want at any given time without worrying about wasting anything unnecessarily. This practice can be applied across many industries, including manufacturing sectors such as plastics or food production companies like Tyson Foods, which makes hot dogs out of discarded chicken parts instead of using whole chickens like competitors.
The circular supply chain model has many benefits, including the creation of less waste and more efficient supply chain management. However, companies must change their business practices to take advantage of this new model.