During the outbreak of the new champions league, countries are struggling to fill the normal operation of global trade need to bridge the gap, the shortage of working to restore the supply of daily necessities.The crisis only accelerated political winds towards the speed of the protectionist and isolationist.
Lift the blockade to make as many countries especially China, commodity circulation has been recovered, but the trade scale is still 7.3% lower than last year.1, however, in the future for a long time, the turnover is unlikely to recover before the outbreak of level.
Many enterprises because of the global supply chain interruption losses, linear long supply chain within a few days and weeks will supply chain disruptions spread all over the world.As a result, these companies may now consider to globalization, shorten the supply chain, through the supply chain moved closer to their areas in order to reduce risk.But if the enterprises do not solve the problem of supply chain of linear, at the same time to do so will only lead to economic costs increase, the environmental benefits.
Simply shortening the limitations of the supply chain
Shorten the supply chain can shorten the goods transportation distance, but at least for consumer goods, goods transportation in the value chain accounts for only a small part of the overall carbon footprint.Transport emissions in the clothing enterprise's total carbon emissions in the value chain accounting for more than the usual for 7-12% of the value chain in the supermarket accounts for only 3-5% of total emissions, and for durable consumer goods, including cars and electronics, transportation emissions accounted for only 0.5 to 1.5% (based on the data of the carbon trust).
Therefore, only by shortening the supply chain to achieve net zero emissions reductions required by the economic recovery.
In addition, many industry to shorten the practice of supply chain is usually close to the distance between level 1 and level 2 suppliers, but the exploitation of raw materials in the supply chain is often difficult to change this part.Because the climate is suitable for agricultural commodities or mineral reserves, raw materials and the geographical position are often more closely.Raw material link tends to be the biggest challenge for supply chain decarbonization, cannot be solved by shortening the distance.
Carbon trust, according to data in the clothing and the auto industry, upstream supply chain emissions by about 80% in more than one level of suppliers;Food and beverage or electronics industry is close to 65% in more than one level of suppliers (an even greater percentage of resource-intensive products such as meat and dairy products).These effects will not reduce because of the shortening of supply chain.
In order to shorten the supply chain at the same time realize the decarburization, must fundamentally change the structure of the supply chain, more specifically, must pay more attention to the cycle of the supply chain.Circulation business model to sustain and preserving resources and the value of products, minimize waste and maximize utilization.Can take various measures to prolong the service life of products, such as repair and reproduction);Increase the value of the products use (e.g., Shared or model based on service);And to recover the value of products and materials - "life" into "ending" for the first time.
Circular economy is the future
Circulation business model has many advantages, such as:
- Cycle performance improvement enterprises the ability of self-sufficiency, a simple copy and to avoid the familiar old effect the cost of the lock mode of supply chain.Dependent on a steady flow of raw materials, are bound to face the risks of commodity markets, and the outbreak era will be significant fluctuations in time.
- Compared with the globalization of the current supply chain model, by the rising cost of labor and capital, advanced economies to shorten linear supply chain may increase the cost of consumers, while recycling business model will not bring that growth.
- From the point of view of generalized economy, circular economy mode to obtain higher value from the resources, so have the opportunity to create a large number of jobs, which can create new opportunities in the raw material and product cycle, these opportunities in linear economic model that will cause the waste is not there.
- Circular economy model can produce diversified income streams, reliance on pure product sales income decrease, create opportunities for the great value of the service pattern mining resources.
Alan the MacArthur foundation, in a recent report found that circular economy strategy "in 2050, will make the key industrial raw materials of the world's carbon dioxide emissions by 40% or 3.7 billion tons".2 circular economy strategy aimed at reducing the loss of the value of the business model, cost efficiency as the core, and the strategy of the marginal cost is lower than other decarburization.
Economic recovery plan in the new outbreak of adopting circular economy mode, enterprise can control of the newly discovered systemic exposure to shift towards a sustainable and resilient.
Previously, circular economy faces a big obstacle is that many across the supply chain of distance, which means that the potential beneficiary may be oceans apart or located in different continents.So, the enterprise in shortening the supply chain at the same time, create recycling business model will be more easy to implement.
Identify risks
Outbreak of the new champions league highlights the necessity of many enterprises to identify and respond to risks, including risks of climate change, because this is the whole earth and all mankind faces a severe systemic risk.Tracking how the damage caused by the outbreak of crisis spread in the supply chain, has the vital significance, because we can learn from the Angle of rare we the biggest systemic risk.
In the beginning of the outbreak, for example, when in Asia sealing city, we see the European car industry stalled, because this industry depend on suppliers in Asia, which is performed by production business model on time.On the demand side, during the outbreak of a wide range of food and beverage industry restructuring, such as in the United States, Canada, the European Union and India to dump a lot of milk dairy products processing industry.Sealing during the city, cut their spending, in consumer spending, especially durable consumer goods may also contributed to the interruption of the supply side.
If not adopting the new supply chain structure to cope with risks, can also use the influence of supply network node to improve the supply chain.By identifying risk hotspots and determined the causes of risk, procurement team can turn these risks into opportunities.The key to understand the feedback loop, can promote positive, sustainable change, reduce risk, this change can be extended in the supply chain network, make the enterprise do for those routes, rather than buck the trend line.
The method of cooperation
If we want to create a greener loop supply chain model, the model of success will depend on the different countries and regions, more efficient use of resources and products and get a higher value.This model can offset countries abandon the influence of the global trade pattern.To study the macroeconomic impact of circular economy, circular economy is to create jobs the net benefit of 3.Circular economy may be important to mining the fossil fuel industry have a negative impact, but the industry has long been under pressure, must develop a reliable transformation strategy to net zero emissions in the future.
This may help to push for the affected industry and national dialogue on further transformation of "justice", but also may result in these industries and countries become increasingly conservative.Moreover, countries have introduced a stimulus plan, hope to restart the domestic economy under the crisis outbreak, we may face the risk of too much emphasis on introspection, national policy led to the independent economic recovery plan.And respond to climate change and achieve global green economic recovery will need countries to work together.
Circular economy mode is the core of use of our existing resources to create value, to this model by extension, which require the participation of the whole value chain and cooperation.Currently, collaboration is the key to successfully deal with the new crown outbreak, and cycle economic model can ensure that the shift in the direction of sustainable development become a part of the new normal.
Only by the companies cannot achieve this shift, however, the government is looking for "ready to start" infrastructure projects, should support investment projects such as waste recovery and recycling, to open the way to the circular economy transformation.
Circular economy has been block by deep-rooted traditional thinking, and, at this time of global chaos, real change has never been so important.
