The Way Forward: Circularity and Lean Logistics

The circular economy has as its purpose a systemic change in the use of material resources to increase the long-term resilience of the production chain and generate new economic opportunities with social benefits. In the midst of the current environmental crisis, circularity represents the opportunity to recover as many materials as possible to reinsert them into production processes before seeking them from a primary source, thus reducing pressure on the planet. 

These materials are known as "secondary," and the percentage in which they are used determines the level of circularity of an economy. The greater the presence of secondaries, the higher the index. The most recent global measurement reports only 7.2%, according to the Circularity Gap Report 2023, published by Circle Economy, while Mexico, as measured by the National Institute of Statistics, Geography, and Informatics (INEGI), has reached 15.4% circularity. 

In a circular economy, waste is minimized thanks to the reconfiguration of the production and consumption process, so that "use and throw away" gives rise to the concept of the 6 R:s Redesign, Remanufacture, Reuse, Repair, Restore and Recycle. 

Change is driven cyclically by a combination of needs and wills, such as the lean manufacturing model, conceived by Japan’s Taiichi Ohno in the 1950s, to manufacture smaller vehicles at a lower cost in response to the social reality of Japan. 

Lean philosophy focused on eliminating waste and optimizing processes. In the context of logistics, this involves eliminating unnecessary activities, minimizing lead time, reducing inventories and optimizing the flow of products and materials for benefits ranging from faster delivery, reduced warehousing and transportation costs, to increased customer satisfaction. 

By eliminating waste, such as excess inventory or long lead times, companies can improve their ability to respond to market demand in a more agile and efficient manner, now known as lean logistics. 

It is necessary, however, to consider certain differences between production-related processes, which are to some extent more predictable, and logistics, which is changeable and reactive to various situations, such as accidents, meteorological and social phenomena, among others. 

However, the logistics industry is responding and generating all kinds of solutions to meet the demands of consumers who are increasingly focused on reducing environmental impact. 

Proof of this is the speed with which freight transportation has advanced in recent years toward the electrification of fleets. I have already shared extensively in this space the way in which demand has determined the speed with which manufacturers have extended the supply of electric freight vehicles.  

With its almost omnipresent participation and the notoriety gained in recent years, logistics as an industry has the invaluable opportunity to support, generate and drive changes in both production and distribution processes and direct them increasingly toward the aforementioned 6 Rs of circularity. 

A great example of redesign comes from global brands like Apple, which is a constant driver of change by offering not only beautiful and functional products, but also a pleasant experience of care for the environment. The new iMac includes a keyboard and mouse charger that eliminates the use of batteries, and its packaging system optimizes resources by eliminating plastic materials and resolving with design, paper fasteners for each component within a one-piece box without sacrificing functionality and safety. 

I would therefore like to propose the integration of the Lean Logistics Circularity concept to our logistics practice in order to formalize and make more visible the current circularity practices, encourage and promote innovation and the establishment of new processes that allow us to meet the main objective: To reduce the pressure on the exploitation of natural resources, of which it is worth mentioning that 90% is wasted in a worrying way. 

This, of course, forces a rethinking of critical logistics processes, such as reverse logistics. Part of it has to do with product returns. Circularity can be activated from the sales processes; the use of artificial intelligence is providing interesting solutions that help the customer test before choosing the most suitable product. It is up to logistics operators to review processes to avoid damage and offer more customer contact options that speed up returns with the least environmental impact, such as touch points. 

Another part of reverse logistics that requires much more sophisticated solutions, but of very high economic and environmental value, is the return of products that have reached the end of their useful life. In some countries, the electronics industry, for example, has long been considering mechanisms to ensure the return of equipment to the manufacturer when it is discarded; collection centers or reception in stores are part of this effort, which unfortunately, has been limited to those countries with strict regulations in this regard.  

E-waste has become a little addressed but dangerous issue for the planet since there are countries that have literally become electronic waste deposits involving serious effects on the health of their inhabitants and the subsoil, due to the fact that certain metals or components, when impacted by the climate, become highly toxic and lose their economic value. 

At Estafeta we have made a solid commitment to sustainability, which is the basis of our business model, and I see the natural evolution of our environmental responsibility practice as the integration of Lean Logistic Circularity as a way to go further, in addition to our participation in valuable initiatives such as reforestation campaigns or waste reduction. We already have waste recovery services that our customers offer to their end users with our points of sale as collection centers. A question I would leave on the table for a future installment is perhaps the following: Is it possible to decouple economic growth from the use of primary natural resources? I like to think so.