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

Robots and Logistics

Nowadays many jobs are getting obsolete, they actually are disappearing day by day and this reality includes roles inside the logistics, transport and freight industry. More and more big players of this game are including “robotic” assistance into their systems and work procedures. This reality made me questioning, how can we remain active and not just active but also, how can we remain useful, promoting and offering value to people? It is clear that “automatic jobs”, based on repetitive tasks, are going to disappear soon so, it is clear than the only way to create value is to based on our intrinsic and unique value as humans, which is empathy.  

Just need to say that every conversation that I have with Maersk ‘s customer service chat starts with “please contact me with a real person”. After that request, I’m introduced with a real human, or at least I hope so, and we can have a richer conversation. What am I expecting when doing that? Empathy, which will help us and our client to solve the necessity, quicker. This point is crucial in logistics because the main goal should be, and it is, solve the problem, full fill the need, using the less resource possible, which in this industry is time. 

Just a quick video for you to show you what’s going on at the warehouses level. This video may change your approach to this article.

What’s the need?

Design a system which can remain and prevail even through deep changes, changes as the one we are living since 2019. The pandemic changed the habits, the rhythms and most of all the beliefs of people, which affects directly their preferences. This is when the concept of #circular-economy pops up.  The concept that fascinates me is the circular aspect, it’s a win-win for all parties involved. The question, how can we offer value and at the same time, benefit the company, the entity which organises all.  

This is when I come back to the basics, the stages of getting circular. You can refer to my last article regarding this topic “Closing the Loops: Challenges vs Benefits”. If we analyse each of the points, I’ve mentioned in the last article, we could make a path easier or at least will be a starting point. The main goal here is “close the loop”.  

How the result of a procedure could be the feed or starting point of the next one? How can we all get some benefit from the chain? If you ask me, one point to start the conversation should be “no gaps”. No gaps in un-used containers, no empty boxes shipped anywhere. It should be a way to use all the space or at least the max possible. Today, there are thousands of cubic meters moved around without any function. Containers travelling for months around without any other function than come back to the owner yard. This is just a quick example that comes to my mind when we talk about efficiently and sustainability.  

What I mean with clean? Without waste. 

If we talk about #circular-economy, does not matter which industry are you in. Logistic, transport and freight the procedures involved are crucial. Usually, logistics is what sticks all the part of the puzzle together, the brain which coordinates it all. If we want a sustainable process, the freight, the transport, the operations should be sustainable, clean and circular. What I mean with clean? Without waste. 

These are a few points I think you should start questioning if leading a transport, logistics organisation: 

  1. Waste creation points – Efficient procedures 
  1. “Empathy level” – Quality assistance  
  1. Continuous training – CS improvement  
  1. Specialisation – Quality of knowledge  

I believe that the concept of #circular-economy do not just apply to a concrete and tangible procedures but also to a mindset of operative thinking. The “How” we do things, from the designing of the products we choose to buy because they are sustainable, until the operations we agree to go through to bring our cargo from overseas. It does not matter if the importer it’s a person or a business, the decisions and preferences will be done always at the human level. At the end of the day we are all humans and the projects, brands, companies we are building start from a dream, a necessity or a goal which we aim to make it last as longer possible.  

“…it is clear than the only way to create value is to based it on our intrinsic and unique value as humans, which is empathy.  ” 

-Debora Cardenas

Next article: I will develop these 4 points mentioned above (1. Waste creation – 2. Emphaty level – 3. Continuous training – 4. Specialization) more in deep and jump into the application of #circular-economy inside urban sports. Fascinates me the goal of applying this concept to one of my projects @Flop Supplies, a brand which empowers youth to keep skating and build community. 

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If you enjoyed this article #shareit with colleagues, friends and family. You will be motivating me and other to keep the concept alive and evolving. Thank you 

Article by Debora Cardenas