What Are Circular Supply Models & Can They Help Our 2022 Supply Chain?

By George Nielsen, January 7, 2022

Tags: food supply, sustainability

It’s no secret that the global supply chain has suffered some major disruptions between 2020 and 2022. Currently, we are looking at another year of potential turbulence thanks to import and export laws, the continuation of COVID-19, and wavering supply and demand due to economic stress. Despite these factors, there are steps that food and beverage manufacturers can take to help future-proof their supply chains on the micro and macro scales — such as considering adapting elements of circular supply models. In this blog, we’ll explore what a circular supply chain model is, the benefits that it offers, and how food and beverage manufacturers can implement this framework in their day-to-day operations. 

What is a circular supply chain model? 

A circular supply chain model is a type of supply chain management in which waste is reduced as much as possible. There is also ongoing review and evaluation at every stage of production to ensure that the quality needed is present, which can significantly minimize food waste. This type of model is not exclusive to consumer goods and nonperishables and can be included at various steps in the food production and distribution process. Examples of this include: 

  • Use of renewable energy throughout the production and manufacturing process 
  • Use of biodegradable materials for packaging 
  • Use of food in a repurposed way after the original product is consumed 

While there are other ways, the three methods listed above are three of the most commonly seen ways that this model is used in the food production industry. 

What are the benefits of using a circular supply model in the consumer manufacturing and distribution system? 

Below, we’ve listed some of the benefits of adopting a circular model in your beverage and food production methods that can offer you long-lasting benefit and support a healthier supply chain in the wake of pandemic-influenced instability: 

1. More sustainable alternative than other production models 

As businesses continue to refine and adapt their operational plans to meet their ESG key performance indicators and deliver results to stakeholders, this benefit becomes increasingly important. Investors and stakeholders alike are looking for businesses that prioritize ESG initiatives and action items, and moving toward a circular manufacturing and distribution model could offer great benefit in this area. The framework itself is centered on repurposing and offers a more waste-less model than others. Beginning to prepare your business to integrate these types of swaps in your daily operations is a great way to organically make progress on your current ESG goals. 

2. Potential cost reduction by adoption 

If your business chose to adopt a circular model, there is always the possibility of reduced costs. This could come from greener energy sources, differences in packaging, or more streamlined methods of production and distribution. While there may be an upfront cost to adopt the framework and adjust your operations accordingly, this can be recuperated naturally as the model continues to evolve and give results. 

3. Higher levels of transparency and accountability for a quality product 

This model naturally requires more oversight and can result in higher quality products with fewer oversights or potential for consumer complaints. You can use software solutions, such as cloud-based ERP software, that have the ability to offer you the reporting and standardization help that you need to offer complete transparency to your consumers within your business operations. 

How to implement circular supply chain practices in your food manufacturing business 

If you’re looking for ways to implement leaner manufacturing practices in your food manufacturing business, you’re not alone. Many businesses in the industry are looking toward more renewable and sustainable options to alleviate stress put on the supply chain to avoid another collapse. Below, we’ve summarized three key ways that you can begin to implement a circular framework in your manufacturing and distribution business: 

1. Streamline operations with value stream mapping 

For each new product that your business creates, there is likely unnecessary expenditures and logistical costs associated with the product — from creation to distribution. Implementing a guided framework such as value stream mapping can help you with a more streamlined rollout process and offer valuable insights about what is absolutely mandatory for a launch in your area of specialty: from conceptualization to shelf. 

2. Find new ways to implement 3R strategy 

The 3R methodology is characterized by three key elements: reduction, reuse, and recycling. While the food industry is working with edible consumer goods, you can still find new ways to innovate using biodegradable packaging, cleaner energy sources for factories and production centers, and involving your clients in the framework wherever possible. 

3. Implement an ERP software that you can trust 

To properly implement a circular supply chain framework in your own production and distribution company, you need to rely on clear, accurate, and actionable data-driven insights. Choosing an ERP software solution that offers your data in a singular, centralized system and a fully customizable system to build your processes on is something that you can use to create higher levels of transparency and quality throughout every level of your organization. Digitizing your system will help you to become more competitive and effective as you navigate your industry in 2022, and move away from disjointed or manual processes that can leave a wider margin for error. 

Inecta is your source for tailored and quality ERP software solutions. For more information about how you can leverage our systems to better your business, visit our website at www.inecta.com, or give us a call at 1.800.632.0573.

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