Circular Supply Chain: Sustainable Value Creation & 10R Framework

Introduction to Circular Economy & Supply Chain

The Traditional Approach of Linear Supply Chain simply describes a straight path from “Mining – Taking – Making – Wasting & Dumping”, resulting to their associated Negative Externalities such as Depletion of Natural Resources, Scarcity of Availability of Resources, Waste, Pollution, Health Hazards and Environmental Adversities. Therefore, there is a need to disrupt this linear trend and adopt Circular Economic Models which are Restorative and Regenerative by design, and pay equal attention to People, Planet and Profits.

It is imperative to imbibe circularity in our economic development, to balance the adverse effects of Rapid Urbanization, Industrialization, Growing Population, Climate Change and Depletion of Natural Resources.

It is a change to the model in which resources are mined, made into products, and then become waste that is disposed. Circular Economy involves Reduced Material Use, Redesign Materials to be less Resource Intensive, and Recaptures “waste” as a Resource to Manufacture New Materials and Products, use Renewable Energy Sources etc.

In a circular economy, manufacturers design products to be reusable. For example, electrical devices are designed in such a way that they are easier to repair. Products and raw materials are also reused as much as possible. For example, by recycling plastic into pellets for making new plastic products.

Circular economy requires coherent practices by all actors across value chains, notably the Organization and their Suppliers, Consumers, and Financial and Government Institutions.

In this Article let’s Discuss on the Topic “Circular Supply Chain – A Way to Sustainable Value Creation”

Key Words :

Circular Economy, Circular Supply Chain, Value Chain, 10R’s of Circular Supply Chain©, Sustainability.

What is Circular Economy

A Circular Economy is an economic system of Closed Loops in which raw materials, components and products through production and consumption follows Principles of Conservation, Restoration and Regeneration (Doing More with the Less with Minimal Waste) as Sustenance Practice where the Resources or Materials Lose their Value as Little as Possible or Use Existing Materials and Products as Long as Possible and Waste & Residues are put back into the System as a Resource.

What is Circular Supply Chain

The Circular Economy associates the Supply and Demand of Supply Chain to Improve Resource Efficiency.

The Circular Supply Chain is a Model that Encourages Suppliers, Manufacturers, Customers, End Users and all the Service Providers & Stakeholders in the entire Chain of Activities, Processes or Systems to take Concerted Measures to use Optimal Resources, Make Minimum Possible Waste, Remake of Returned Goods, Reuse of Discarded Materials and Recharge them for Resale.

Optimizing material usage through better Product Design; Product Lifecycle Extension; Using Reusable or Recycled Material through Green Procurements; Reusing its ostensible Waste Materials; Return Policies, Buy-Back Mechanisms & Reverse Logistics where the Waste is put back into the system as a Resource; After Sale Service, Sharing Platforms etc giving a New Dimension to Circular Supply Chain.

It’s aims is to Maximize Materials Usage; Minimize Waste and better Manage Residuals & Returns and Convert them into New Products that they can feed as Input Resource to Create Salable Value once more.

10R’s of Circular Supply Chain©

Following are 10R’s of Circular Supply Chain© developed by the Author.

> Restrain / Refuse (keep Under Control of doing something or Check within Limits; Say No – Do Not Accept)

> Reduce (Minimum Use of Raw Materials or Less Consumption of Resources)

> Repair (Make Good Damaged Goods)

> Reuse (Multiple Times Use & Not Single Use of Products and Components)

> Replace (Substitute with Alternative (Better One))

> Recycle (High Quality Reprocessing of Materials)

> Refurbish (Revamp, Renovate, Renew)

> Recover (Regain / Reclaim from Discarded)

> Rubbish / Rot (Compost)

> Renewable Energy Sources (Alternative to Fossil Fuels – Coal, Crude Oil and Natural Gas)

> Restrain / Refuse (keep Under Control of doing something or Check within Limits; Say No – Do Not Accept)

Restrain Means to prevent from doing, exhibiting, or expressing something – to hold back from or control – keep under control of doing something or check within limits – “draw back tightly, confine,.”

Government Policies / Regulations / Guidelines, that are Restraining or Preventing use of Certain Materials, Measures to Prevention, Reduction or Elimination of  Waste at the Source or Promoting the use of Nontoxic or Less Toxic Substances, Implementing Conservation Measures, and Reusing Materials Rather than Putting them into the Waste Stream etc. are Major Initiatives towards Circular Economy.

These initiatives take momentum when Social Activists, NGOs enter the scene and actively involved to Create Awareness & Social Movement.

The next is Individuals or Group Consumption Choices or Behaviors. Awareness, Consciousness of Actions or No Actions, Reducing Consumption and forming a self-restrained society is the only way to live with nature harmoniously. If you’re given the option of taking an item that you don’t need, the best option is to refuse it. Say NO to all things you don’t need, especially single-use plastics, such as Water Bottles, Food Plates, Straws, Disposable Coffee Cups and Plastic Carry Bags. Once waste is created, all options to deal with it require energy and resources and generates waste in cyclic fashion, . Some options are better than others, but it’s better to just avoid creating waste in the First Place.

Examples:

♦ A Ban on the use of Single-use Plastics that was notified by the Union Environment Ministry of India on August 2021 came into effect on 1^st July’2022.

♦ EU agrees on single phone charger law. As of 2024, all smartphone and tablets sold in the bloc will have to be compatible with a USB Type-C.

♦ NGOs spreading awareness about the Use of Plastic & Environmental Effect.

♦ Boycott Products that Endanger Wildlife.

♦ Say ‘no’ to a plastic shopping bag if you are able to carry the items by hand or by bringing your own reusable bags.

♦ Refuse plastic utensils and sauce packets if you are taking food home and can use your reusable utensils.

♦ Avoid Use & Throw Goods – Instead choose to use Reusables.

♦ Use non-toxic or less-toxic substances.

> Reduce (Minimum Use of Raw Materials or Less Consumption of Resources)

Reducing is simply Using Less & Creating Less Waste. Reducing Resources / Material use is the most important thing we can do. By reducing Material use, we avoid the unnecessary use of resources such as materials, energy and water. It means there is less waste to manage. This is one way you can reduce your carbon footprint. So if you can’t or won’t completely Refuse an item (First Option), Reducing is Next Best Option. Don’t create waste if you don’t have to.

Examples :

> Better Design to Reduce Material Consumption.

> Use less Packaging in your Product

> Buy in Bulk to Reduce Packaging.

> Purchase Flexible Fuel Fleet Vehicles, or Low Emissions Vehicles.

> Reduce landscape water use

> Reduce the amount of water needed during production

> Reduce Waste or Scrap by Upgrading & Improving Process Efficiency

> Buy energy efficient items to Reduce Energy Consumption.

> Use energy efficient light bulbs – Install automatic light shut off to Reduce Energy Consumption.

> Encourage Carpooling or Riding a Cycle to Work.

> Make Use of Natural Light (Transparent Roof Tops in Warehouse) to Reduce Electricity Consumption.

> Only Buy just what you Need to Reduce Waste

> Stop / Reduce Food Waste.

> Repair (Make Good Damaged Goods)

Repair is Fixing or Restoring broken items to be used. Right to Repair is good for the environment instead of Buying New because it Reduces Release or Emissions of Greenhouse Gases that are generated during the manufacturing process. Repairing your possessions also cuts down on waste by extending a device’s lifespan and reducing how often we buy new.

Examples :

> Update your Computer Rather than throwing it out and getting a New Replacement. (Unfortunately iPads are Designed for Use & Throw – No Repair)

> Industrial Machines Repair to Work again in Normal way

> Repair, Painting and Decorating of Plumbing, Electrical Installation

> Repair Broken Eyeglasses

> Seal a Leaky Pipe

> Repolish to make Scratches in Wood Furniture Disappear.

> Chairs with Ripped Cushions Reupholstered with New Materials.

> Repair a Broken Toy

> Reuse (Multiple Times Use & No Single Use of Products and Components):

Reuse refers to using items more than once or the action of using something again. Reusing is also the act of taking old items that you might consider throwing away and finding a new use for them.

Examples:

> Energy-intensive industries capture and reuse waste heat.

> Opportunities for Wastewater Reuse in other Processes.

> Reuse Your Containers and Jars.

> In information technology, design reuse is the inclusion of previously designed components (blocks of logic or data) in software and hardware.

> Reuse of RO Reject Water or Ion Exchange Rinse Waters.

> Use Reusable Plastic Containers for Freezing or Storing Food Items.

> Save Gift Wrapping Paper and Boxes to use again.

> Use Old Jars for Storage.

> Give unwanted Toys and Books to Child Rehabilitation Centers or school Libraries to Use.

> Make memo pads out of waste paper.

> Re-use envelopes – purchase reuse labels.

> Replace (Substitute with Alternative (Better One)) :

Replace means the shift for a Better Alternative. To replace is to be or to furnish an equivalent or substitute, especially for one that has adverse impact on Environment. Replace is an alternate product that is comparable and similar in functionality to the current item but is better from environmental point of view.

Example :

Alternative to Plastics like Bamboo Toothbrushes, Stainless Steel / Glass Water Bottles, Eco-Friendly Coffee Tumblers, Cloth Pads or Menstrual Cups, Cloth Diapers, Reusable Shopping Bags, Compostable Garbage Bags, Eco-Friendly Cutlery etc.

> Recycle (Reprocessing of Materials)

The collection and conversion process of waste materials into usable and new materials is called Recycling. Recycling involves some form of reprocessing of waste materials to produce another product. It is one of the eco-friendly methods of waste management for a sustainable conversion instead of letting it go to landfills. Current disposal methods threaten our environment and health, but with sustainable recycling, we conserve natural resources and decrease the harm we cause to the Environment. Recycling non-renewable materials reduce environmental pollution and protect natural ecosystems.

Recycling means turning an item into input which can be used again in the process, usually for Developing a completely New Product.

Examples :

♦ Recycling of Metal Wastes, Glass Cullet, Plastic Wastes, Paper Recycle etc.

♦ Recycle industrial wastewater by treating.

♦ Processing of waste and extracting useful material from it.

♦ Modify product packaging so that it can be easily recycled.

♦ Energy Recycling – is the recovery of energy that would normally be wasted in industrial processes by flaring, exhausting to the atmosphere or operating low efficiency equipment, and converting it into electricity or thermal energy (steam or heated water).

> Refurbish (Revamp, Renovate, Renew)

Refurbish means Renovate, Renew, Revamp or Redecorate something, especially a Building. It is to rebuilding the original form and structure.

Example :

Make a building look new again by doing work such as Painting, Repairing, and Cleaning to Improve its Looks and Possibly its Functionality.

> Recover (Regain / Reclaim from Discarded)

This is the recovery of waste without any pre-processing. Recover refers to the practice of putting waste products to use.

Examples:

Waste oils that cannot be refined for reuse in vehicles can be burnt for energy recovery. Recovering the energy from waste oil reduces our dependence on coal and imported oil.

For example, decomposing garbage produces methane gas, which can be recovered and burnt to produce energy.

> Rubbish / Rot (Compost) :

This Residual Management. This is the last option when waste cannot be used in any other way. Usually, this means sending Rubbish to a landfill.

Composting is a great alternative to throwing things in the landfill. It provides the right environment for organic materials (like food and garden waste) to be able to properly decompose.

Examples:

♦ Putting Veggie Scraps, Food Wastes or Garden Waste in the Compost Bin Instead of in the Trash.

♦ Residual disposal of waste is normally into a sewer or septic tank.

It is very important to manage residual solid and liquid waste properly. Waste not disposed of correctly can cause damage to health and the environment.

> Renewable Energy Sources :

Just like other Resources, Energy also Lasts as Long as Possible in a Circular Economy. Renewable Energy Sources are most abundantly available and be Harnessed without Depleting. Use of Renewable Energy greatly Preserves other Natural Resources like Fossil Fuels – Coal, Crude Oil and Natural Gas.

Examples :

• Solar Energy, Wind Energy, Geothermal Energy, Hydro-power, Ocean Energy, Bioenergy.

Value Insights into Supply Chain:

♦ The term Value Chain refers to the process in which businesses receive raw materials, add value to them through production, manufacturing, and other processes to create a finished product, and then sell the finished product to consumers. The value chain describes the full range of activities that firms and workers do to bring a product from its conception to its end use and beyond. This includes activities such as design, production, marketing, distribution, support to the final consumers Return & Reverse Logistics and Converting the Waste into Wealth and Drive Value and Competitive Advantage in every Endeavour.

♦ A linear supply chain simply describes a straight path from raw materials to production, and finally, to disposal. Needless to say, this is not very Cost-Effective and Environmentally Friendly. The products end up being discarded at some point by the consumer anyway. So, when a new product comes out, the old one is discarded in a landfill.

♦ On the other hand, the Circular Value Network is the set of interrelated activities performed by companies to maintain or increase the social, financial or environmental value of that activity and its parts.

♦ The objective of Circular Supply Chain is to extract the Advantage of Materials, Energy and Wastes of a Process.

For better Realization of Value, Involvement of all the Stakeholders and their Collective Contribution, Collaboration and Alliances are instrumental to enable such circular business models. For example, the key to addressing India’s solid waste management challenge lies in connecting all kinds of actors along the value chain, including producers / brand owners, municipalities, the informal sector, waste management companies, and recyclers.

♦ Tie up arrangements with waste management agencies to realize their circularity objectives and supporting municipalities in plastic and other waste collection are very essential. Through Collection to Reuse, Repair, Recycle, Recover till Rubbish Maximum Value can be Extracting and Derived from Waste

♦ The government can offset such pre-competitive collaboration across industries and value chains with partners as mutually invested coordinators of circularity. While this opens up additional avenues of green job creation, businesses have to be considerate about the already existing informal sector in demystifying the complexity of reverse logistics and the recycling landscape.

Benefits of Circular Supply Chain

> Conserves Natural Resources such as Wood & Water; Mines & Minerals and other Resources.

> Regenerates Natural Systems.

> Reduces Depletion of Natural Resources.

> Prevents Pollution – Combats Climate Change.

> Support Sustainability.

> Can Improve Access & Availability of Natural Resources for Future Generations.

> Reduces the amount of waste sent to landfills and incinerators.

> Reducing the Need to Collect New Raw Materials.

> Saves Energy – Resource Consumption.

> Saves Money and Creates Value.

> Increases Economic Security by Tapping a Domestic Source of Materials.

Government Initiatives

According to Ellen MacArthur Foundation’s estimates, circular economy adoption in India will bring an annual benefit to a tune of Rs 40 lakh crore ($624 billion) in 2050 and reduce GHG emissions by 44 per cent.  

The recent focus on circular economy in the Union Budget puts India in the right direction. So far, the government has been proactive in formulating policy frameworks for ten focus sectors for circular economy transition.

The Natural Resource Efficiency Policy, Plastic Waste Management Rules, Construction and Demolition Waste Management Rules, Metals Recycling Policy and Extended Producer Responsibility are a few such examples.

The E-waste Management Rules 2022 were floated by the Ministry of Environment, Forests & Climate Change (MoEF&CC) on 19^th  May’2022

One More R – Rethink!

The circular economy does not only require closed material cycles and renewable energy, but also systems thinking. Every actor in the economy (Company or Organizations, Individuals, NGOs, Nations) is connected to other actors. Together, this forms a network in which the actions of one player influence other players. To take this into account, the short and long term consequences must be taken into account in choices, as well as the impact of the entire value chain.

Rethink is about considering how our Actions or Inactions affect the environment.

Humans impact the physical environment in many ways: Overpopulation, Pollution, Indiscriminate use or Waste of Natural Resources, Burning Fossil Fuels, and Deforestation. Changes like these have Triggered Climate Change, Soil Erosion, Poor Air Quality, and Undrinkable Water, Health Hazards. So Rethink how you Involve and Contribute for this Greater Mission to Stop Further Deterioration.

Rethink about bringing Change in the Right Direction.

♦ Educate the Employees about corporate sustainability.

♦ Educate consumers about responsible consumption.

♦ Bring Awareness among all the Stakeholders.

♦ Collectively Mobilize Movement towards Sustainability.

♦ Do Whatever Best Way You can Do & Follow 10 R’s as far as Possible in your every action.

Conclusion:

All the stakeholders, Governments, NGOs, Civil Society, the Private Sector, and others, are expected to Involve with Whatever best they can by Practice & Contribute to the 10 R’s of Circular Supply Chain© to Realise the Benefits of Circular Supply Chain and help to put a break to the Exploitation of Natural Resources Extracted from the Nature and Ensures Availability of Natural Resources for our Future Generations Sustainably.

Not only that, you also help to Reduce the need for Extracting (mining, quarrying and logging), Reduce Requirements for Refining and Processing Raw Materials all of which create substantial Air and Water pollution. As the 10 R’s of Circular Supply Chain©, saves Energy & Resources, it also Reduces Greenhouse Gas Emissions, which helps to tackle Climate Change, Prevents Adverse Impacts on Environment and Saves Mother Earth in a Truly Sustainable Manner.

References:

The Circular Supply Chain : Basic Principles and Techniques – By Ifeyinwa Juliet Orji & Frank Ojadi

Circular Supply Chain – 17 Common Questions By Deborah Dull

The Circular Economy : A User’s Guide – 1^st Edition, by Walter R. Stahel

The Circular Economy: A Wealth of Flows – By Ken Webster

Designing for the Circular Economy – By Martin Charter