Is your business currently operating under a closed-loop economy model? Rather than utilizing a linear economy model, is your business aware of the benefits that can be realized as a result of the closed-loop model? For any business considering ways in which they can successfully integrate this model into their production processes, this post and accompanying infographic will include some of the most valuable information including how the model works and how it impacts your businesses’ bottom line.
A closed-loop economy may seem difficult to understand, but the truth is the operation is right in the name. Often referred to as a circular economy model, other times a closed-loop supply chain, these models operate under the condition that they produce little to no waste. Which means that every input in the production process is reused, recycled, shared, or repaired. Rather than outputs being looked at as waste or unusable, this ‘waste’ that’s produced is rather the catalyst for the next production process.
With businesses globally placing more emphasis on green initiatives, this model has seen an increase in popularity in recent years. Businesses are interested in the ability to obtain, create, and consume these materials without producing excess waste. With estimates indicating this model will be responsible for nearly $4.5 trillion in expenditures globally by 2030, it’s sufficed to say businesses are interested. This is because despite the scope in which any business operates, they’re still capable of benefiting from this model. Not only in the environmentally conscious vein, but also within the vein of public relations.
Perhaps the greatest benefit, though, are the sheer amount of raw material supplies that can be saved and reserved. The impact this model can have on the environment if more companies were to adopt it is astronomical. With more and more innovations being discovered, the opportunities for savings that companies can inherit are also improving.
Comparing Two Contrasting Models
A closed-loop economy is only achieved when companies are able to work together to establish a closed-loop supply chain. This often requires a rework of the way that companies approach their design, manufacturing, and selling efforts of all products. As these processes are redefined, companies gain a better understanding of how to effectively refurbish and reuse the inputs that contribute to the creation of their products.
As mentioned previously, majority of businesses today employ a linear economy model. Within these models, the raw materials used throughout the design and crafting processes are exhausted through one production cycle. None of the material is saved, in fact it is often almost entirely sacrificed. Meaning the production process requires more raw materials to begin anew.
The closed-loop economy’s strength is seen through the inefficiency in the linear model. Through its cyclical nature, the closed-loop model is capable of continuously recycling and repurposing raw materials and inputs used within the creation process. This is certainly the most sustainable way for organizations to go about their production processes. If your business is hoping to become more environmentally sustainable within its operations, take a moment to check out the infographic coupled alongside this post. Courtesy of Quincy Recycle.