Circular Economy:What You Need To Know

Circular economy is a sustainability for all paradigm but mainly linked to the manufacturing industry. We all know the cycle – manufacture, use and dispose, but circular economy encourages reduce, reuse and recycle. This economic model seeks to promote the utilization of all the available resources, by-products and all. Circular economy minimizes production and reuses all the available elements that should not be allowed to return to the environment.

Circular economy promotes the use of biodegradable materials as much as possible in the manufacture of products. For instance, a sugar company uses sugarcane to produce sugar and in the process, there are by-products like molasses and bagasse fiber. Molasses is the syrup that remains after the sugar crystallizes. Instead of disposing, it can be used to manufacture alcohol,candy and other energy bites, vinegar and citric acid. It can also be mixed with animal feed. Bagasse on the other hand can be used as a biofuel to produce heat, energy and electricity, as well as manufacturing paper and building materials.

Key elements of a circular economy

A circular economy works to preserve value in the form of energy, labor and materials. For this reason, products are designed for durability, reuse and recycling in order to reduce the waste that is released into the environment.  It is a significant process that is slowly picking up pace and it is continuing to gain momentum. The following are the major aspects of a circular economy:

Circular economy

Design for the Future

When industries are creating and manufacturing products, it is important to keep in mind the future. The products being designed must be able to be reused and recycled as much as possible. This should actually be the niche position of most companies, as the world is uniting in the fight against global warming and moving towards a cleaner environment.

Move towards digital technology

Technology has made the world a global village and therefore, industries are able to easily track and optimize their resources by strengthening connections between supply chain actors through online platforms and technologies that provide insights within the shortest time possible. This can be done by creating an asset-sharing marketplace online to reduce costs and increase product utilization by matching supply and demand. DHL for instance, is experimenting with drones to create crowd-based logistics in its delivery chains.

Preserve and re-use what is available

While using your resources, ensure you are able to maintain, repair and upgrade them for future re-use. Re-using the available resources to maximize their lifetime and get the most out of them, based on innovative and cost-effective processes. To make the world healthier and more sustainable, Royal Philips, a global health-care company is trying to be innovative by re-manufacturing and refurbishing medical imaging equipment.

Use waste as a resource

Waste is harmful to our environment but not all waste should be disposed of. You can turn your waste into a resource by being innovative.

Circular economy

 

You can utilize all your waste streams and use them as a secondary resource to create another product like in the case of the sugar industry above, where molasses and bagasse fiber are put into another use instead of being released into the environment.

Rethink

Considering the circular economy requires an innovative mind all through, you need to rethink and re-discover greater opportunities to create more value with all the available raw materials and align incentives through business models that are achievable. The business model should be able to build a sustainable interaction between products and services to promote unique customer experience and provide incentives on life extension of a product.

Collaborate for greater value

The fight against global warming is not an individual but a collective effort, therefore, there is a need to collaborate with other stakeholders to work together through the supply chain, both internally and externally, as well as with the general public to create a joint value. Creating awareness increases transparency and knowledge, and strengthens cooperation.

With the surge of popularity of circular economy, it is important to know what exactly it means and how corporate, industries and individuals can be part of it for a greater good. The definition of circular economy varies depending on the audience, but the bottom line is, it targets a reduction of the amount of waste released into the environment. In order to come up with a common language to define circular economy, government agencies, NGOs and academia firms are working hand in hand to interpret it in various terms and aspects for a better understanding.