“The Irony of Economic Development”

There was a great depression that occurred in 1929 and lasted a decade. Then in the 2007 the great financial recession in the US-led to the global financial catastrophe thus setting off the economic effects over the world for a long-time, as many countries suffered economic shocks even after the crisis was over. As the impact of COVID-19 pandemic has spread across the globe, it has led to economic shut down. The economists believe that this could be a worse situation disrupting the economies and it is well said that it is uncertain how long it will take before it turns up into depression. However, I see and strongly believe that this is a time of Global Economic Restructuring.

So how can we get around this kind of crisis of economic stagnation and global unemployment. The government of India came out with a stimulus package for COVID -19 with India’s need to be part of global supply chains. A very wide term, some still confused and understand supply chain mechanism as studied in MBA whereas the economists consider this to be a subject of discussion under sustainable development. Hence, we can state that a movement towards sustainability is only possible if we manage to develop a concept that integrate economic and ecological goals. Henceforth this challenge can be realized with the application of Sustainable Supply Chain management method. The setup of Sustainable Supply Chain Networks strongly supports the realization of a circular economy by way of closing process chains between enterprises within an industry and by implementing joint environmental protection measures.

However, reducing and avoiding waste was already an important issue after 1970. The question arises- what is sustainable development? Hence, sustainable development is the simultaneous improvement of economic, environmental, and social conditions. This means that the business must construct a circular economy, where the used products, scrap, residuals, and other waste materials are collected, conditioned, and reused.

Getting into History of Economic Thought - Waste in the production stage emerges as a result of not having effective processes and technologies hence using hard tooling for example milling, drilling, grinding, or lathing manufacturing processes determine the emergence of waste. We can state that the scrap emerges due to a mismanaged process or inappropriate processing methods.

Well! there are three main reasons for a firm to make efforts in improving their waste position- firstly if the waste producers are charged for the full environmental cost and  in turn it becomes more cost-effective to reduce the amount of waste they produce, secondly it will be profitable to reduce waste because the raw material charge also decreases and thirdly an improved environmental position can strengthen customer loyalty, which is beneficial in a favorable market position.  Henceforth the principles of waste management are elimination, reduction, reuse, recovery, and disposal of waste.

Thus, to form a circular economy, the various process chains of the sustainable supply chain network should be closed to avoid and reduce waste, a very wide term declared during the stimulus package by government of India. Hence, we need to identify all the factors that influence the existence and the emergence of waste at every point of the supply chain which is very important to reach this objective. The best example for Sustainable Supply Chain network is the Automotive Industry, many firms that exist have introduced environmental initiatives for gaining a competitive advantage towards sustainability. Therefore, the automobile is the consumer article with the highest rate of recycling, even higher than paper.

Going forward we need to believe that sustainable supply chain system is possible to turn from a flow economy to a closed loop economy. This ultimately benefits ecological and economic development not only within the sustainable supply chain network, but also leads to the improvement of the competitive position for all everyone.

Thanks & regards