SUPPLY CHAIN & INFORMATION SYSTEMS AND SUSTAINABILITY
The Circular Economy
Supply chain professionals of the past focused only on forward logistics, moving inputs and products through the value chain and ultimately to the customer.
Moving forward, reverse or circular logistics will dominate: moving inputs and products through the value chain and then into either technical cycles (for durable goods) or biological cycles (for food and organic materials)–keeping materials and molecules in value streams and out of waste streams.
Often today called the circular economy, this idea of circularity originated in concepts like industrial ecology and industrial symbiosis in the 1940s, was later popularized by books like Cradle to Cradle (Braungart and McDonough, 2002), and became a serious topic of research in supply chain management in the 2000s (see Guide and Wassenhove, 2002).
Circular Economy and the Supply Chain
The Ellen MacArthur Foundation (EMF) began to popularize this work in 2013. Ellen MacArthur, famous after breaking the world record for solo-sailing non-stop round the world in 2005, grew concerned about the world’s oceans after seeing pollution first-hand and started EMF to do something about it.
According to EMF, the circular economy is based on three principles:
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Design out waste and pollution
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Keep products and materials in use
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Regenerate and restore natural systems
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The graphic below, referred to as the “butterfly diagram” was developed by EMF and McKinsey’s Center for Business and the Environment using a foundational concept from the work of McDonough and Braungart: all products should be designed to, at the end of their useful life, to enter either a biological or technical cycle for reuse, repurposing or recycling.
Circular Economy: Zero Waste Through Biological and Technical Cycles
Technical Cycle Case Example: Google Data Centers
Google’s data centers use refurbished technology, pass older technology to second-hand markets, and repurpose servers and components to keep key metals and chemicals out of the waste stream.
Google has hundreds of massive data centers that collectively demand billion gallons of water. The intent here is not to suggest that Google has no impact but that it’s an example of a company that has embraced the circular economy for at least part of its operations.
Biological Cycle Case Example: Ecovative’s Mushroom Packaging
Packaging is a great thing to protect products and preserve food but the waste it creates is a big problem. According to the US Environmental Protection Agency (EPA) in 2018, 82 million tons of packaging waste was generation of which 44 million tons was recycled and 37 million tons was burned or landfilled.
Fortunately, sustainable packaging alternatives are increasingly available such as Ecovative’s “mushroom packaging”: mycelium-based packaging that is completely organic and can be “grown” into almost any shape and 100% biodegradable and compostable–thus entering the biological cycle and staying out of landfills.
Learn about more sustainability concepts within this major.
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