The Ways In Which Your Business Can Benefit From A Closed-Loop Economy


For many business owners or managers, you may have already heard of or are familiar with a closed-loop economy model. Perhaps what you’re unaware of are all of the benefits that come from this model. If your business is looking to integrate this model into your business operations, but you were unsure as to how, look no further. The infographic coupled with this post breaks down the closed-loop economy model in detail, in addition to how it can serve to aid your business. 

It’s important to first understand the naming conventions of this model. Typically, a closed-loop economy is referred to as a closed-loop supply chain. This is in part due to the fact that these production models produce no waste. Meaning each and every input in the production process is reused, recycled, shared, or repaired in some shape or form. These inputs are then reusable, so rather than producing excess waste, this model welcomes previously used inputs as a valuable resource meant to be used again in the creation process of another new substance or product. 

As more and more businesses are opting into green initiatives, this model has seen quite the uptick in popularity in recent years. Businesses are interested in the ability to obtain, create, and consume these materials without producing excess waste. So interested, in fact, that estimates indicate this model will be responsible for nearly $4.5 trillion in expenditures globally by 2030. Regardless of the scope in which your business operates, it can still benefit greatly from the adoption of a closed-loop economy model. Aside from the environmentally conscious benefits, this model can help improve a company’s public relations and perception efforts in addition to reducing the amount of reliance placed on external suppliers to accomplish a production cycle.

Therein lies one of the greatest benefits of companies opting into a closed-loop economy model. A compounded reduction on the reliance of raw material supplies of all these businesses has a huge impact on the environment. Similarly, this model encourages innovation and internal job growth. If this weren’t enough, the savings as a result of reused raw materials can improve corporate profits and these benefits can then be passed onto customers. 


Making This Model Work

In order to fully assemble a closed-loop economy, companies must be willing to work together to establish a closed-loop supply chain. In most cases, this requires an overall rework of the way that companies approach the design, manufacturing, and selling of their products and packaging. Once these processes are redefined, companies are able to better realize how they can refurbish and reuse the inputs that begin the creation process of their products. 

However, as of today, a majority of companies utilize a linear economy model. This model is far less environmentally sound than a closed-loop economy model, as the raw materials used by manufacturers to design and create their products are disposed of rather than reused. Little to none of the material is saved, thus the process of creating the product must begin anew using a fresh set of inputs. 

This is where a closed-loop economy’s strengths truly shine. Rather than following a more linear model, a closed-loop economy is cyclical. Meaning there’s a continuous cycle of recycling and repurposing raw materials and inputs that can be used again in the creation process. This is certainly the most effective way for companies to reduce their manufacturing costs and create a more sustainable product line for their customers. If you’re searching for additional information on how this model operates in your industry, be sure to review the featured resource coupled with this post. Courtesy of Quincy Recycle.

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About Nikki St. Martin

Nikki St. Martin is VP of Marketing for The Jacobson Group, the premier insurance talent acquisition firm in the country. St. Martin is responsible for the ongoing marketing and branding efforts of The Jacobson Group.
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