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How can circular economy principles improve supply chain resilience?

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Supply chain resilience is the ability of a supply chain to cope with disruptions, risks, and uncertainties, and to recover quickly and efficiently. In today's volatile and complex world, supply chain resilience is more important than ever for maintaining competitive advantage, customer satisfaction, and environmental sustainability. But how can circular economy principles help improve supply chain resilience? Circular economy is a system that aims to eliminate waste and pollution, keep products and materials in use, and regenerate natural systems. In this article, we will explore how circular economy principles can enhance supply chain resilience in four key areas: design, sourcing, logistics, and recovery.

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Marek R. Helinski (M.Sc., MBA) ?? ? ??

Find your new business opportunities with experienced international business development senior executive - B2B export,…
Thainá S. Vieira

Diretora Administrativa | COO | Comércio Exterior | International Trade | Strategy | Finance | Customs and…
Jose Giacometto

I partner with businesses to navigate the complexities of global logistics and unlock new opportunities. Let’s connect…

1 Design for durability and modularity

One of the main principles of circular economy is to design products and services that are durable, repairable, reusable, and adaptable. This can reduce the need for new materials and resources, extend the product life cycle, and lower the environmental impact. Moreover, designing for durability and modularity can also improve supply chain resilience by reducing the dependency on specific suppliers, components, or technologies, and by enabling faster and easier customization, maintenance, and upgrading. For example, a modular smartphone can be assembled from different parts that can be replaced or upgraded as needed, reducing the risk of obsolescence, waste, and disruption.

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Thainá S. Vieira

Diretora Administrativa | COO | Comércio Exterior | International Trade | Strategy | Finance | Customs and International Legal Management
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As an International Trader, circular economy principles improve global supply chain resilience by reducing waste, promoting sustainable practices, and minimizing dependence on finite resources. By designing products for longevity and ease of recycling, supply chains become more adaptable and environmentally friendly. Legal frameworks supporting circularity further enhance resilience by providing a regulatory foundation. Embracing these principles worldwide fosters a sustainable approach to resource management, contributing to a more robust and resilient global supply chain.

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Marek R. Helinski (M.Sc., MBA) ?? ? ??

Find your new business opportunities with experienced international business development senior executive - B2B export, innovations, inventions, new technologies, AI, CSR/ESG - business partners search, product sourcing
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Implementing circular economy principles such as designing for durability and modularity can fortify supply chain resilience. By prioritizing durability, products withstand transportation and storage challenges, diminishing the need for frequent replacements. Modularity facilitates swift repair and maintenance responses to disruptions, minimizing downtime. These principles reduce resource dependency, operational costs, and material waste. Moreover, they enhance flexibility, adaptability, and brand reputation, aligning with sustainable practices. Integrating circular economy principles fosters a resilient supply chain capable of navigating uncertainties while promoting responsible resource management.

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2 Source from renewable and recycled sources

Another principle of circular economy is to source materials and energy from renewable and recycled sources, rather than from finite and depleting ones. This can help conserve natural resources, reduce greenhouse gas emissions, and create value from waste. Furthermore, sourcing from renewable and recycled sources can also improve supply chain resilience by diversifying the supply base, reducing the exposure to price volatility, and enhancing the reputation and trust of customers and stakeholders. For example, a clothing company can source organic cotton from local farmers, use recycled polyester from plastic bottles, and adopt renewable energy for its operations, reducing the environmental footprint and the reliance on imported materials and energy.

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Jose Giacometto

I partner with businesses to navigate the complexities of global logistics and unlock new opportunities. Let’s connect and explore how DHL can propel your business towards expansive international success.
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Diversifying into renewable energy sources in supply chains reduces dependence on the unpredictable nature and pricing of carbon fuels. This shift enhances supply chain resilience, making it less susceptible to the volatility and potential scarcity of carbon-based energy. This strategic move towards renewable energy not only stabilizes the supply chain but also positions it for greater sustainability and reliability in the face of fluctuating fossil fuel market

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Marek R. Helinski (M.Sc., MBA) ?? ? ??

Find your new business opportunities with experienced international business development senior executive - B2B export, innovations, inventions, new technologies, AI, CSR/ESG - business partners search, product sourcing
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Implementing circular economy principles like designing for durability and modularity can strengthen supply chain resilience. Prioritizing durability ensures products endure transportation and storage, reducing replacements. Modularity allows swift repairs, minimizing downtime during disruptions. These approaches cut resource dependency, operational costs, and waste. Sourcing from renewable and recycled materials not only enhances sustainability but also boosts brand reputation by showcasing a commitment to responsible practices. Integrating circular economy principles fosters a resilient supply chain, navigating uncertainties while promoting sustainable and ethical business conduct.

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3 Optimize logistics efficiency and flexibility

A third principle of circular economy is to optimize the logistics efficiency and flexibility of the supply chain, by minimizing transportation distances, costs, and emissions, and by maximizing the utilization of assets, capacities, and information. This can help improve the operational performance, profitability, and customer service of the supply chain. Additionally, optimizing logistics efficiency and flexibility can also improve supply chain resilience by enhancing the visibility, coordination, and responsiveness of the supply chain, and by enabling the adaptation to changing demand, supply, and market conditions. For example, a furniture company can use digital platforms to connect with local manufacturers, distributors, and customers, and use smart packaging and tracking systems to optimize the delivery routes, modes, and times, reducing the logistics complexity and uncertainty.

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Marek R. Helinski (M.Sc., MBA) ?? ? ??

Find your new business opportunities with experienced international business development senior executive - B2B export, innovations, inventions, new technologies, AI, CSR/ESG - business partners search, product sourcing
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- Efficient Routing: Use advanced algorithms for optimal transportation routes, cutting fuel usage and transit times. - Adaptable Warehousing: Implement dynamic strategies, like multi-use facilities, to adjust to inventory changes and demand shifts, saving costs. - Real-time Monitoring: Employ IoT tracking for supply chain visibility, enabling proactive decision during disruptions. - Collaborative Partnerships: Foster relationships to streamline processes and enhance agility. - Demand-driven Inventory: Optimize stock levels based on forecasts to reduce costs. - Automation Integration: Streamline tasks and enhance accuracy. - Continuous Improvement: Evaluate metrics regularly and implement enhancements.

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4 Recover and regenerate value from waste

A fourth principle of circular economy is to recover and regenerate value from waste, by reusing, refurbishing, remanufacturing, recycling, or composting products and materials at the end of their use. This can help create new sources of revenue, innovation, and employment, and reduce the environmental impact of waste disposal. Moreover, recovering and regenerating value from waste can also improve supply chain resilience by creating feedback loops, synergies, and opportunities for collaboration among supply chain actors, and by increasing the availability and affordability of materials and resources. For example, a coffee company can collect and process the used coffee grounds from its customers, and use them to produce biogas, fertilizers, or cosmetics, creating new value streams and reducing the waste generation and disposal.

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Marek R. Helinski (M.Sc., MBA) ?? ? ??

Find your new business opportunities with experienced international business development senior executive - B2B export, innovations, inventions, new technologies, AI, CSR/ESG - business partners search, product sourcing
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- Efficient Routing: Optimize transportation routes, exploring waste transport for recycling. - Adaptable Warehousing: Use multi-use facilities for fluctuating inventory, including recycling storage. - Real-time Monitoring: Employ IoT for waste management visibility. - Collaborative Partnerships: Streamline waste management with partners, innovating value extraction. - Demand-driven Inventory: Optimize stock levels, integrating recycled materials. - Automation Integration: Enhance waste processing with automation. - Continuous Improvement: Assess metrics regularly for waste reduction and value recovery.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Marek R. Helinski (M.Sc., MBA) ?? ? ??

Find your new business opportunities with experienced international business development senior executive - B2B export, innovations, inventions, new technologies, AI, CSR/ESG - business partners search, product sourcing
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- Supplier Diversification: Mitigates risks. - Technology Adoption: Utilize blockchain, AI, and IoT for transparency, predictive analytics, and real-time monitoring. - Robust Transportation Networks: Develop alternative modes and routes- eg. multiple ports or road-rail interchangeability. - Skill Development: Cross-train employees for versatility. - Agile Risk Management: Implement dynamic risk strategies for ongoing assessment and adaptation to emerging threats. - Stakeholder Collaboration: Foster communication and collaboration to enable swift response and recovery.

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How can circular economy principles improve supply chain resilience?

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1 Design for durability and modularity

2 Source from renewable and recycled sources

3 Optimize logistics efficiency and flexibility

4 Recover and regenerate value from waste

5 Here’s what else to consider

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