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Understanding Circular Supply Chain

Updated: Nov 11, 2021

What is the supply chain, what is the value chain? Why are we talking about a circular supply chain? We need to think PROCESS!

Let us take a look at the supply chain for a beautifully designed Shirt.

First, take a look at the Shirt: the color, the button, the fabric, and the design. Think about the supplier of

1) Design;

2) Materials including dye, button (made of plastic), and fabric (yarn and fiber);

3) energy & water;

4) equipment & land/building;

Stakeholders include supply chain players, regulators, finance, and human resources.

To practice circular economy, suppliers (1-4) need to practice 3Rs (Reduce consumption of materials & energy &water, Re-use and Recycle). Supplier 4 needs a more extended time assessment,

The same practices are applied to the final product producers and the consumer (you and me). Today, most suppliers use virgin materials such as virgin polymer from oil & gas, cotton fiber from agriculture production, designers' choice of virgin materials for their brand, and consumers' choice of product produced from virgin materials. This linear supply chain leads to a linear economy today.

Imagine consumers demand products made from recycled materials, and designers choose recycled materials & design for reduce & re-use. The demand for recycled materials will increase and this will drive the recycling industry to grow, and the economies of scale will make recycled materials more competitive. Imagine regulation is introduced to support products made from recycled materials (either 100% or over 50%), which will also drive the demand for recycled materials and support the growth of the recycling industry and will change the mindset of waste to value along the value chain of production.

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