Closed Loop Supply Chain Definition

In a closed loop supply chain, materials are recovered and reused instead of being sent to landfill. This type of system is also sometimes referred to as a “zero waste” or “circular” system.

In a traditional linear supply chain, materials flow from supplier to manufacturer to customer and then to landfill. In a closed loop system, materials are recovered at the end of their useful life and either reused by the same company or sold to another company for reuse.

The benefits of a closed loop system include reduced waste, lower disposal costs, and decreased environmental impacts. Implementing a closed loop system can be challenging, but the benefits are worth the effort.