Circular / loop supply chains

by Tom McGrenery (Content Lead)

The so-called 'circular supply chain' is set to be one of the key trends to be aware of in sourcing and logistics for 2022.

A circular supply chain is one where goods make their way back up the chain in reverse to be reused, recycled or resold – often repeatedly.

“This closed loop supply chain is likely the future, but not in the short term. We still lack much of the infrastructure required to break down and reuse materials, so even goods which could be recycled – such as certain types of plastic – still go to landfill, despite best intentions,” says Alecia Bland of inventory management systems company Unleashed Software. “It's likely we won't see any major changes to this loop in 2022, but we will see more steps taken towards its realisation. That means companies in logistics must continue to optimise their reverse supply chain functions and keep an eye out for sustainability partners such as packaging manufacturers and recyclers. Being able to advertise these types of green initiatives could prove to be a point of competitive advantage for eco-conscious customers.”

According to Supply Chain Brain's Bastin Gerald, “The circular supply chain creates brand differentiation, while forging a closer connection between consumers and small growers. In the process, the model directly rewards small-scale suppliers for their commitment to sustainability. The ultimate goal is to mitigate environment impacts by aligning incentives toward the goal of an inclusive economy.”

A recent Nielsen survey found 90% of millennials were willing to pay more for products that contain environmentally friendly or sustainable ingredients, while 48% of U.S. consumers said they are “definitely or probably” changing their consumption habits to reduce the impact on the environment.

According to recent Gartner surveys, 70% of supply chain leaders plan to invest in the circular economy, while 51% expect their focus on “circular economy strategies” to increase over the next two years.

What does 2022 have in store for international trade? Will supply chains start to normalize, or will things still be in flux? Find out all the answers in our upcoming Buyer Fireside Chat. Joining us for the live panel discussion are logistics specialist Allan Cobar who has 20 years of experience in the industry, and Dr. Neale O'Connor, Managing Director of Ricebox. Catch the livestream on December 17, at 10:00AM HKT (GMT+8)!

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Host: Meghla Bhardwaj