Published 09-06-2022

How Circular Economy Can Transform the Manufacturing Industry

09-06-2022

You may have come across the term “circular economy” during your day-to-day life. But do you have a comprehensive understanding of the concept?

A circular economy continues to grow and become a critical factor in many countries. It is a unique model based on production and consumption. The concept focuses on sharing, repairing, reusing, leasing, recycling and refurbishing existing products over an extended time.

Circular economy aims to extend the life cycle of the products. Therefore, it reduces waste to the least and increases product value.

Did you know that a third of human food goes to waste? Managing wastage is a path to follow. Countries that use a circular economy achieve exceptional efficiency to boost their economic value.

The Working Mechanism of a Circular Economy
You need to dig deep into the mechanism of a circular economy to understand the model better. 

The global population continues to grow each day, resulting in an increasing demand for raw materials. Despite the rising demand for raw materials, supply remains limited. As a result, many countries depend on others to get enough raw materials.

More so, the extraction process of raw materials harms the environment. Most processes of extracting raw materials promote greenhouse gas emissions and increase energy consumption.

More innovative management of raw materials can reverse these adverse effects. Circular economy works to reduce carbon dioxide emissions as well as the energy used. It increases the value of existing raw materials by combining efficient management methods.

The resulting economy does not rely on constant raw material extraction and importation.

How Does Circular Economy transform the Manufacturing Industry?
The manufacturing industry relies on raw materials for its operation, using raw materials to manufacture various final products.

Crude oil is an example of a known raw material. It undergoes processing to obtain kerosene, petroleum and diesel.

Many related manufacturing industries carry out the conventional processing of raw materials. But many are taking up the circular economy concept to use in their operations.

With this model in place, many manufacturing industries see a massive transformation. Some of the ways circular economy has transformed them include:

Reduced Environmental Hazard
Circular economy promotes the use of biodegradable materials to restore the environment. The model alters the manufacturing process from standard to a more sustainable method.

As a result, companies are now creating materials from previously discarded products, which diverts the waste from landfills and also reduces the cost of materials.

For instance, furniture manufacturing plants use disposed wood products. Such practices prevent the active cutting of trees and enrich the economy. The use of discarded wood products also reduces post-consumer waste in the immediate environment.

Expansion of Secondary Manufacturing Services
Circular economy continues to create demand for new essential services. The implementation of this model aims to reuse products for long periods. As a result, many service companies can continue to grow, including logistics, collection, refurbishment, remarketing and remanufacturing.

Such service companies promote the reusing and recycling of disposed of materials. They do so by channeling them back to manufacturing plants.

The manufacturing industry spends less money on purchasing raw materials and related logistics. The lower costs of production translate to increased profit margins. So, the manufacturing industry expands due to the implementation of circular economy.

Increases Business Satisfaction
Circular economy promotes an increase in business satisfaction through corporate social responsibility. As a result, increasing demand for sustainable products in the current market.

Businesses also must shift and adapt to new approaches to meet the demand, which must also take into account producing revenue. Circular economy is well-structured to help increase business satisfaction.

The model also ensures that materials and products stay in use. It does so through design in the manufacturing industry. Keeping materials in use for extended periods increases their value to various industries.

Combined with a circular economy model, corporate social responsibility does not attract ordinary employees, but ambitious employees who aim to change the manufacturing industry. Such employees promote the implementation of the model, which helps industries realise their set goals.

Moreover, circular economy has raised the business market value by approximately 6%. It has also raised employee productivity by approximately 13%.

Saves More Resources
In the linear approach, extraction is the common method of sourcing raw materials. However, since these raw materials decline, many manufacturing industries need to save resources. One way to do this is by implementing the circular economy approach.

Research shows that this economic model results in 70% material savings. Industries will continue scrambling for scarce raw materials with the growing population. Companies that have embraced circular economy are more likely to secure their viability.

Is the Circular Economy Model the Way To Go?
The circular economy model continues to take centre stage in the manufacturing industry. It redesigns waste.

Its aim of recycling and reusing waste as raw material is eye-opening. A lot of industries use and adapt the idea. It harbors many benefits. This is a concept that keeps improving with each dawn.

FAQs
Here are some commonly asked questions about circular economy:

What Is the major drawback of circular economy?
The circular economic model lacks strategic standardisation and guidelines. The principles of this model exclude the not-fully-recyclable materials. They do not provide proper guidelines on how to handle such materials, which is biased.

What is one way to improve circular economy?
Like most models, circular economy can accept changes for the better. Encouraging less consumption of raw materials is one way to improve the model so that it focuses on the efficient use of raw materials. It does not focus on the industry consumption of materials.

Is circular economy sustainable?
Circular economy is sustainable. The model promotes and designs reusable products that are viable to industries. It ensures such materials last for long. It aims to maintain the value of materials, making them sustainable.

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