For individuals and businesses around the world, the reality of the global consumer waste crisis has set in. In the U.S. alone, more than 290 million tons of municipal solid waste is produced each year. The popularity of fast fashion and single-use plastics is only further spurring the rapid increase in refuse that makes its way into landfills every day.
Luckily, not all companies are ignoring the impact of their products on the environment. Efforts by businesses to reduce their carbon footprint and do their part to protect our natural resources have led to the emergence of a concept called a “circular economy.”
What is a Circular Economy?
Most consumer products are designed with only their own lifecycle in mind. This means that when a consumer product is no longer functional, useful, or relevant, it goes to a landfill, making way for a brand-new product to take its place. The process is far from sustainable or responsible and emphasizes profits over a company’s green practices and its natural resources.
In a circular economy, a product’s lifecycle doesn’t end when that product wears out and needs to be replaced. Instead, companies that function under a circular economy forgo the wasteful principles of a linear economy. Rather than designing a product to be thrown away and replaced, these companies aim to maximize a product’s lifecycle as much as possible. This doesn’t just mean designing products to last. A product’s lifecycle can also continue through recycling, where the materials of recycled former products are used to produce new ones.
A circular economy does not function only concerning the creation of products. Instead, it impacts every aspect of the design, production, supply chain, and sale process.
The Challenges and Rewards of a Circular Economy
While a circular economy can help businesses reduce their carbon footprint, it can also aid in consumer satisfaction and boost a company’s bottom line.
Launching a circular economy model is not without its challenges, as existing businesses must rethink and reanalyze their supply chain. They may also struggle to estimate whether they’ll need to supplement their recycled or repurposed materials with new materials to avoid delays in the supply chain. Recycled and repurposed materials may also affect the design of a product as compared to those made with new products.
For a circular economy to function, suppliers and other businesses that are a part of the design and production cycle must collaborate to meet sustainability goals. One part of your supply chain failing to participate can cause issues throughout the production cycle.
The help of an experienced business leader who understands international supply chains is valuable for establishing circular economy structures. For instance, East West Bank Chairman and CEO Dominic Ng’s leadership skills and expertise in strategy, business development, and global finance help business leaders worldwide navigate complex financial systems to deliver goods and services more efficiently.
The Economy of the Future
While the future of wealth and growth hangs in the balance, the emergence of the circular economy represents transformative changes within international supply chains. It is set to revolutionize the way that businesses operate on a global scale, leading to more responsible, sustainable operations, and a more harmonious relationship between commerce and the planet. Ultimately, it will be key for governments to engage a broad range of stakeholders, ensuring that all voices are heard in the process.
Also Read: 8 Best Practices To Improve Supply Chain Execution
