The Role of Supply Chains in Supporting the Circular Economy: A Case Study of McKinsey & Company

Circular Economy
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Table of Contents
Introduction......................................................................................................................................2
Theoretical Perspective....................................................................................................................3
Fundamental aspects of circular economy...................................................................................3
Concepts and characteristics of circular economy.......................................................................3
The main drivers of circular economy, ie why it is important and benefits for businesses,
society and environment..............................................................................................................4
The role of supply chains in supporting restorative processes advocated by the circular
economy.......................................................................................................................................5
Practical Perspective........................................................................................................................6
McKinsey Company....................................................................................................................6
Operations....................................................................................................................................6
Supply Chain................................................................................................................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Introduction
The term supply chain is used to describe the flow of goods or services for an organization.
And, to monitor and manage such activities supply chain management process is used.
Circular economy helps businesses to form strategies to have a growth in business. It makes
the products recyclable so that it can be modified later. Circular economy provides scope to
the businesses to adopt for better opportunities in the future. Market demands are increasing
day by day creating risks for the existing companies which can solved by using circular
economy. On the contrary, supply chains are used to monitor the stock management process
in a business. When the customer’s demands are clear then it is easier to launch new products
in the market. This report will describe about the role of supply chain managing the business
activities appropriately. The report will also provide information regarding the circular
economy that benefits the business.
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Theoretical Perspective
Fundamental aspects of circular economy
The aspect behind using circular economy is that it provides sustainable development for the
business processes. It is a kind of regenerative system that slows down the process of input,
leakage and waste to them. Circular economy provides a way for the businesses to use their
existing resources in continuation. This saves a lot of money and time for the managers to
keep a track about the current business activities. Circular economy provides high utility
value of any product, goods or services for the customers. It is essentially used by almost all
companies worldwide. According to the given case study, the circular economy is defined for
the different countries globally.
Concepts and characteristics of circular economy
Most of the businesses are trying to embed the processes of circular economy for their
business to achieve success which is really complex process for them.
 Circular value chain- using this type of chain, the products are designed to be
renewable or recovered later. Biodegradable material is used to design and develop a
product so that it can be customized later. This helps in reducing cost for a product
hence increasing its predictability which is beneficial for a business. The production
cycle is based on providing value to the proposed product without affecting the
performance of that particular product.
 Recovery and collection including industrial symbiosis- in terms of circular economy
when the product is not in use it can be collected and recovered. This characteristic of
circular economy allows the waste products to be re-used again for a different or same
purpose. The by-products are obtained from the waste which are used by the
businesses.
 Durability, modularity with repair services- this process focuses on increasing the life
of a product for the business. This includes maintenance of the product, repairing of a
product, remanufacturing and so on. This helps the business to save the cost of
manufacturing new products. This also helps in enhancing the design before
manufacturing.
 Personalisation, made to order and lock-in: this is to ensure the customers that they
will be able to use products that are build according to their requirements. When the
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