In this week's issue of Resilience Reflections, Devrim Yazan describes how the transition to a circular economy not only reduces vulnerability to disruptions in our supply chains but also reduces dependence on virgin raw materials and promotes financial stability.
In this regular series by the Resilience@UT and 4TU Resilience programmes, UT researchers share their personal reflections on current events and trends that impact our daily lives, exploring their implications for resilience. The series is just one of many UT initiatives responding to the urgent need to respond to rapid societal and environmental change. As an academic institution, we have a role to play in strengthening the resilience of the social, technological and environmental systems that support us. The opinions expressed in this article are the author’s own.
A circular economy where raw materials are used efficiently, and products are recycled is key to strengthening the resilience of the system of producing goods and services known as supply chains. In particular, the supply of critical raw materials, such as lithium, copper, nickel, niobium, helium are highly vulnerable to disruptions. These disruptions are often triggered by geopolitical tensions, environmental challenges, and changes in the market. A systemic shift from a linear economic system based on “take-make-dispose” understanding to a regenerative circular system helps to reduce risks to supply chains.
A buffer against supply shocks
We can recall the pandemic period and are keenly aware of the ongoing wars, which have caused disruptions to supplies and considerably increased the time needed to deliver products within global supply chains. For example, the chip industry and electric battery industry have recently faced significant delays in delivering their products. In a circular economy, the emphasis is on maximizing the life of materials and products. This is particularly crucial for critical raw materials, which are often scarce and concentrated in specific geographical locations, such as niobium in Brazil, lithium in Chile, and magnesium in China. By promoting circularity strategies, such as reduce, reuse, recycle, a circular economy reduces dependence on virgin raw materials. This not only mitigates the pressure on precious natural resources but also reduces the risks of disruptions in the supply of raw materials. Our current dependence on new, unprocessed raw materials makes supply chains vulnerable to any disruption in their extraction or processing. However, a circular approach introduces alternative sources, such as recycled or recovered materials, thereby creating a buffer against supply shocks.
A driver of innovation
As the circular economy drives innovation in material sciences and product design, it contributes to the development of more sustainable and less resource-intensive products. The design of products with their entire lifecycle in mind, focusing on ease of disassembly, repair, and recycling, is the key to resilience and sustainability. Such practices not only extend the life of products containing critical raw materials but also enhance the ability to adapt to changing market conditions and resource availability.
Companies that adopt circular models are likely to see a competitive advantage as they can offer more sustainable options to their customers and demonstrate resilience in the face of resource scarcity and disruptions in supply. At a macro level, countries that adopt effective regulations and policies for the transition to a circular economy, will increase not only resilience in their supply chains but also financial stability on the way to sustainable development.
Devrim Yazan is an associate professor at the Industrial Engineering and Business Information Systems (IEBIS) department, part of the BMS faculty. He specialises in sustainable supply chain management and the circular economy, with expertise in industrial symbiosis networks, sustainable business models, bio-based economy, renewable energy, and circular construction ecosystems. As the Resilience Theme chair of the BMS Faculty and a UT Resilience Board member, Devrim plays a key role in advancing resilience initiatives.
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