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A US$4.5 trillion business opportunity

October 03, 2015: A new report by Accenture* estimates that changing from a linear to circular supply chain is worth upwards of US$4.5 trillion to participants.

Accenture Strategy managing director Peter Lacy argues that the "take, make and waste approach of traditional, linear business models has now begun to choke economic growth through unpredictable raw material prices and the increased cost of depending on less stable supplies of constrained resources."

He suggests companies can turn waste into wealth by adopting new business models that reduce dependence on scarce resources and generate new innovative services that grow revenues.

Google seems to think so. It has just joined circular economy proponent the Ellen MacArthur Foundation to develop "innovative, market-leading initiatives" together with Cisco, Kingfisher, Philips, Renault and Unilever.

According to Dame Ellen, "Google's ambition to lead the way on the circular economy represents a step-change opportunity and is ideally placed to play a key enabling role in the transition."

Panalpina seems to have begun this process. Assuming the word "trillion" has meaning to the logistics industry, no doubt other 3PLs will soon follow their customers' lead.

- Simon Keeble is the editor of Freightweek

 

*Accenture consultants Peter Lacy and Jakob Rutqvist say that transitioning to the circular economy may be the biggest revolution and opportunity in the past 250 years to [re]organize future production and consumption.

In their new book 'Waste to Wealth' they describe five main circular business models that are generating innovative resource productivity improvements in more than 120 companies: "At its essence, the circular economy represents a new way of looking at the relationships between markets, customers and natural resources. And the lens through which it's viewed is disruptive to new business models powered by new technology breakthroughs, in particular digital.

"Digital disrupts the way we produce and consume through innovative business models established by innovative technologies. Blended together, the circular economy, innovative new business models and digital revolution represent a huge opportunity for companies to create a competitive advantage, or as we put it, a 'circular advantage,'" explain the two men.

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