Closing Loops: Challenges vs Benefits

I believe that we engineers should redefine our careers in a direction that support business models which are based on sustainable processes. #CircularEconomy is an easy-to-understand concept that will change your perspective as a professional. So, I’ve decided to put the #circulareconomy topic on the table aiming not just to extend my own knowledge but also, get a few interesting and new perspectives from the LinkedIn Network. If I am lucky someone will get excited as I did when I discovered this all-new concept.

On this article, you will find a summary about Challenges and Benefits of getting circular followed by my humble opinion, finalizing with an interesting real case study video from Starbucks, the biggest coffee retail company in history. Enjoy the reading!

What’s a Circular Economy? 

This is a model which is based on a 0% waste mentality. The current economic system is Lineal: Produce-Use-Waste, which clearly is not sustainable anymore. The idea is to have long-lasting products which are designed to reaccess a production chain after their useful lifetime, producing no just no waste but also a much more efficient system. Improving quality and customer service by default. It is such a smarter system which imitates Nature!

Find the famous “Butterfly Diagram” from @Ellen Macarthur Foundation below:

What “Closing the loops” means? 

All idea of this Butterfly diagram is having just circular processes in every industry/product/service so, waste is not produced. Getting circular or “Closing the loop” means transforming the current operations/decisions to migrate from a Lineal to a Circular system. 

Which are the challenges ongoing circular?  

1) Acquisition/Refurbishment: Recovering what has been produced (on a big scale if needed) For example, inside the Recycling Industry, this method only works with big volumes of acquisition due to the Recycling factories have high operation costs and they can’t work with small amounts of waste. They are designed to work on a big scale. Also, refurbishment needs a minimum of quality depending on the product.

2) Reprocessing: This can be made on a component or product level. Sometimes reprocessing can be a cheaper option rather than remanufacture all product again.  Particularly on this aspect, I founded really interesting to realize those old repair methods were circular and much more efficient than today’s models. 

3) Remarketing: This aspect does not look important but it is! This is the step which encourages users and consumers to select circular products and support circular brands operations. Identifying potential markets which are looking for circular options is key to successfully implementing a circular business model.

How “Closing the loops” can provide business value?

It is necessary to look at #closingtheloop as a benefit instead of an obligation or request. Any business wants to grow, maybe not in size but in quality. If we focus on creating long-lasting businesses models using circular strategies based on sustainability, the growth will come as a side effect. 

1) Sourcing Value: 
*Direct financial gains by closing the loop.
*Recycle materials increasing the market.
*Cheaper resources or reducing the risk.
*Reduction of costs. 

2) Environmental Value:  
*Communication to stakeholders as a way to get more attention and interest. *Customers who care about the environment and the current situation will be more loyal and long-lasting. 
*Also, this communication can provide political benefits as special regulations and discounts. 

3) Customer value:
 *Customer/Users Incentives and benefits.
*Easier to return old products.
*Improve customer satisfaction.
*Quality service.

4) Information Value: 
*Control of internal and external information.
*Valuable feedback directly from customers/users.
*Save surveys and market research cost.

Here is an example of a famous company “Starbucks” who is “Closing loops” today. I founded it really interesting but cannot stop wondering how they are planning to collect every single cup they sell. The challenge here is Aquisition, returning the product to the manufacturer, especially due to #starbucks is a big chain with thousands of stores worldwide. 

Getting circular or “Closing the loops” has infinite benefits for our society. Today, people are looking for doing things differently and new business models are arising on a daily basis worldwide. Considering that this world is going really fast, faster than never before in history, I am really positive about the impact that the human being can produce working in the right direction. 

“Any business wants to grow, maybe not in size but in Quality. If we focus on creating long-lasting businesses models using circular strategies based on sustainability, the growth will come as a side effect” 

Article by Debora Cardenas

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