Closed Loop Supply Chain Meaning

What's meant by a closed-loop supply chain? 

A closed-loop supply chain is a sustainable approach to minimize wastage by reusing and recycling materials back into production process. This type of supply chain is often used in manufacturing industries where materials and products are constantly being reused. 

The benefits of a closed loop supply chain include reduced waste, increased efficiency, and lower costs. By recycling materials back into the production process, closed-loop supply chains can significantly reduce the amount of waste produced and thereby lower carbon footprint. 

Aside from going green and contributing to a healthier environment, creating a closed loop supply chain also helps businesses increase efficiency and lower costs when implementing this type of supply chain correctly. 

Process of closed loop supply chain

The process of closed loop supply chain includes: 

• Collecting any defective or used product from the user 

• Sending this product back to the manufacturer where he may remanufacture the product and send it again to the user 

• Goods or products that don't fit to be treated by a closed loop supply chain are known as landfills. Companies must emphasize minimizing the production of landfills.