Dive Brief:
- Various businesses have begun implementing sustainability initiatives as a way to reduce waste, but also gain profit from both the forward and reverse supply chains, Business 2 Community wrote last week.
- The trend is to establish closed-loop supply chains, where previously discarded products circle back into the value chain and minimize waste. A previously discarded product can therefore be repaired, resold or even dismantled for parts.
- Norwich University reports U.S. companies produce 7.6 billion tons of non-hazardous waste each year, with 55% of the waste ending up in landfills. Meanwhile, companies like Dell are taking the lead in recycling products with commitments to reuse 10% of its discarded parts in new models.
Dive Insight:
Reverse logistics are the nucleus of the closed loop theory. Though the term can often refer merely to the first stage of the returns process, the closed loop actually seeks to see a product all the way through, from creation to demolition. Even when an item is resold, the loop remains open: the new buyer becomes yet another source from which to ultimately collect the object purchased as its usefulness diminishes.
Similarly, a closed loop does not have to start with an end-of-life product. After all, procurement practices can play a large role in ensuring a product is considered for recycling when it reaches the end of its current cycle. In just one example, companies may choose to use reusable packaging for transport, rather than cardboard shipping or pallets, and encourage their buyers to keep and use or send back the material. Subtle signs in packaging and labeling can also help a consumer identify the end-of-life process at the point of sale.
The notion of finding value within a dead or dying object isn't new, of course — but recent trends prioritizing product availability make it easier to ignore sustainability considerations for an economic purpose. However, a shift in mindset to begin the reverse logistics process at the point of sourcing, and therefore create a closed-loop or full lifecycle supply chain may help drive long-term efficiencies and even improve supplier relations through greater collaboration.
