Why the circular economy must link up the whole supply chain
The long-discussed concept of the circular economy (CE) seems ready for takeoff. New information technologies like the internet of things (IoT), big data analytics or blockchain are the powerful means everybody is waiting for. The real door-opener is still to be found in the analog world: It’s about trustful collaboration. But only when all actors along the product life cycle find profitable ways to take resource scarcity into account, and only if they share both costs and benefits, will CE be able to unfold its full potential. So trustful collaboration is asking for a lot. It needs to convince decision-makers of the business opportunities they get once they trade their silo-oriented optimization rationale for a holistic-management approach that addresses the entire life cycle of the products and the materials involved. Making use of circular economy to prosper and differentiate products and services is suitable for business-to-business heavyweights, too. For example, ocean carrier Maersk created a digital twin of their latest container ships down to the smallest bolt. Through this, the company will ultimately know how much and what material is being used in their fleet. During routine overhauls or at the final disassembly, Maersk has a clear systemic view on which parts and materials can be reused, remanufactured, upcycled or continue to stay in the circular flow of shipbuilding. Executing supply chain power It’s not by chance that most CE case studies are when economically strong asset owners and service providers such as Caterpillar and Maersk are in the driving seat. The same applies to powerful vendors, for instance tech giants such as HP and Dell who have established highly efficient return systems for used products. Why is it that CE pioneers are often found among these kind of companies? The two most obvious reasons: on one hand, these players have […]