Are Circular Supply Chains the Future of Logistics?

Circular supply chains—in which raw materials and waste products are reintroduced into the broader supply chain—are gaining popularity as a long-term sustainability solution. Experts believe this practice may offer a practical answer to today’s massive waste problem.

According to the UN Environment Programme and the World Bank, global solid waste volume is set to reach 2.2 billion tons by 2025. By reusing critical waste, manufacturers can give new life to products themselves and the raw materials that comprise them. Recycling a single ton of aluminum, for example, conserves about 16,000 liters of water and 37 barrels of oil.

With environmental concerns at an all-time high, companies are scrambling to implement more sustainable practices. Are circular supply chains the simplest solution to today’s waste crisis?

The benefits of circular supply chains

Circular supply chains offer a wealth of perks, including:

  • Long-term savings

After a potentially hefty initial investment, companies enjoy a rewarding payoff. Instead of manufacturing goods from scratch, companies can implement a far more cost-efficient practice: recycling and reusing perfectly viable materials. Beyond cost and labor savings, they may receive tax credits and other government incentives. 

  • Brand image advantages

Sustainability is a hot topic, permeating today’s headlines and conversations. Nearly every player in the supply chain—including a growing number of eco-conscious consumers—now expect sustainable products. Implementing circular supply chains can help companies comply with environmental, social, and governance (ESG) mandates and boost customer satisfaction.

  • Less price volatility

Many companies struggle to predict pricing—a challenge compounded by global supply chain disruptions and soaring inflation. Those that rely on energy-dependent raw materials, such as aluminum and fuel, face the worst of today’s price volatility challenges. Reusing materials allows companies to circumvent these obstacles and maintain a more organized budget.

How companies can implement circular supply chains

Introducing a more sustainable production model—however daunting it may sound—doesn’t have to involve a complete overhaul of day-to-day operations. Companies can create an effective and efficient circular supply chain model with the right tactics: 

  • Cultivating the right supplier partnerships

Partnering with like-minded suppliers—those with waste minimization strategies and circular supply chains—can help companies stay on the right track. By working with sustainable suppliers, companies can enjoy supply-chain-wide cost savings, newfound transparency, and reputational advantages. 

  • Improving data collection and analysis

Data is essential to all decision-making processes. With the right tools, such as a transportation management system (TMS), companies can gain crucial insights into internal and external workflows—especially when producing and moving raw materials and recycled waste products.

  • Rewarding customers

Customers also play an important role in advancing sustainability. Take H&M, for example: within the next ten years, the clothing giant intends to introduce a manufacturing process fueled by 100% recycled materials. A key driver of that campaign are customers, who receive incentives for returning unwanted products.

More sustainable and resilient supply chains await

The world is evolving at record speed. Amid pressing environmental concerns, new government mandates, and sky-high customer expectations, companies must do more to keep up—sooner rather than later. Implementing circular supply chains is an excellent first step.

CTSI-Global’s advanced software—such as Honeybee TMS—gives companies the data-driven insights they need to build cost-efficient and eco-friendly business models. In today’s competitive, innovation-driven environment, the right solutions can make all the difference.