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Suppliers are critical to a circular transition as they source, move and transform 100B tonnes of materials through the global economy each year. The Ellen MacArthur Foundation highlights 9 areas for supply chain professionals to address to build circular supply chains.
Today, the Ellen MacArthur
Foundation has shared new guidance
to help supply chain leaders take critical steps to shift away from linear,
take-make-waste models of industry toward circular systems that equip them to
deal with future global disruptions.
The recommended actions set out in a white paper, produced in collaboration with
the Circular Supply Chain Network,
come in the wake of both ongoing and new geopolitical shocks and economic
uncertainties that continue to highlight the need for resilient supply
Building a Circular Supply Chain (and its
provides insights into the benefits and challenges of moving away from the
conventional, linear approach to business and production and shows the crucial
role supply chain professionals play in an increasingly changing world.
It highlights that a circular economy, where resources are reused and nature is
regenerated, offers businesses the opportunity to redesign their supply chains
to build stability and resilience while reducing costs, eliminating waste and
pollution, and cutting greenhouse gas emissions.
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“Disruptions such as the COVID-19
the Russian invasion of
and other recent world events have exposed the vulnerabilities of traditional,
linear supply chains and the economic impacts of their weaknesses,” says Andres
Oliva Lozano, Senior Research
Analyst at the Ellen MacArthur Foundation. “While searching for resilience,
businesses also want supply chain leaders to deliver lower costs and meet
increasing environmental expectations.
“For a typical consumer goods company, the supply chain accounts for more than
80 percent of greenhouse gas emissions,” he added. “By switching to a circular
supply chain and decoupling operations from the consumption of natural
resources, businesses have the opportunity to reduce their exposure to price
volatility, increase material security and help meet their environmental
Suppliers are critical in the circular-economy transition as they are
responsible for the sourcing, movement and transformation of the 100 billion
tonnes of materials that enter the global economy each year.
“Even the best-prepared teams with the strongest partnerships and advanced
systems can only do so much against the array of disruptions from unforecasted
events,” says Deborah Dull, VP of
Global Supply Chain at Genpact and founder of the
Circular Supply Chain Network. “Regardless of the cause, the result is a
material one — literally. When disruption hits, the impact shows up in
inventory: either too much or too little. Circular supply chains offer a
strategy to teams looking for new ways to improve the reliability of supply.”
Building a Circular Supply Chain shows how corporate supply chain
professionals can build circular supply chains by focusing on nine areas:
People & structure
Data & quality
Metrics & performance management
Business models & product design
Policy & legislation
The paper provides recommendations for effectively navigating each area,
demonstrating the enormous opportunity for supply chain leaders to deliver
economic benefits to businesses and environmental benefits to society.
Abe Eshkenazi, CEO of the
Association for Supply Chain Management, said:
“Building a circular economic model is the best way to deliver resiliency,
ensuring our supply chains withstand and bounce back from inevitable shocks —
whether it is disease, disaster or war. Supply chain professionals in
partnership with sustainability and compliance professionals must be proactive
about making changes to the way our industry functions — for the good of our
livelihood and for the planet.”
Published Nov 15, 2023 1pm EST / 10am PST / 6pm GMT / 7pm CET