Closing the Loop on a Circular Supply Chain

This is an excerpt of the original article. It was written for the September-October 2014 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2014

2014 marks the 10 year anni­ver­sary of the Gartner Supply Chain Top 25 ranking. This year we have a diverse set of large, global companies with mature, demand-driven supply chains. There are lessons to be learned from these supply chain leaders, many of whom have led their industries over the past decade.

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While conventional supply chains seek to efficiently move products in a linear fashion from raw materials to end consumers, a “circular” or “closed-loop” supply chain is one that is also dependent on feeding used products back as raw materials. The resulting circular supply chain poses unique challenges and opportunities for supply chain professionals.

Successfully building and managing such a system requires new and unconventional thinking. That’s what the Milwaukee, Wisc.-based global manufacturer Johnson Controls has done to incorporate automotive battery recycling into its business

Distinguishing Features
There are plenty of economic incentives for re-thinking the auto battery supply chain. As much as 80 percent of the materials used to make auto batteries can be derived from recycled batteries. The metals, plastics, and acid used to make conventional auto batteries can all be recycled. This creates a significant business benefit by minimizing the impact of price volatility of these commodities and providing raw materials at a more competitive cost. Moreover, automotive batteries contain hazardous materials. The best and most responsible form of minimizing the health and environmental risks is to recycle them.

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