It’s no secret that the world is facing some serious environmental challenges. From climate change to ocean pollution, we need to find ways to reduce our impact on the planet.
One solution that is gaining traction is the circular economy. This approach seeks to keep resources in use for as long as possible, instead of extracting and discarding them. And one of the key components of a successful circular economy is effective asset tracking.
Let’s take a look at how tracking assets can help make the circular economy a reality.
What Is The Circular Economy?
The circular economy refers to an economic system in which resources are used and reused in a closed loop. The goal of the circular economy is to minimize waste and pollution while maximizing the efficient use of resources.
The traditional linear economy is based on a ‘take, make, use, dispose’ model, in which resources are extracted from the natural environment, used to create products, and then disposed of once those products have reached the end of their lifespan.
In contrast, the circular economy is based on the principles of reuse and recycling. In a circular economy, waste is not considered to be a disposal problem but rather a valuable resource that can be used to create new products.
The benefits of the circular economy include the conservation of natural resources, the reduction of greenhouse gas emissions, and the creation of jobs and economic activity.
Implementing the circular economy will require changes in the way we design, produce, use, and recycle products. But as the Ellen Macarthur Foundation has recognized, IoT technologies are making it easier than ever to make these necessary changes and develop meaningful action plans.
What Is Asset Tracking?
Asset tracking refers to the process of tracking assets throughout their lifecycle, from acquisition to disposal. By tracking assets, businesses can optimize their use, improve asset utilization rates, and reduce costs associated with lost or stolen assets.
This can be done manually, by assigning each fixed asset a unique identification number and then recording its location, or it can be done automatically using asset tags, such as RFID tags or QR codes, and asset tracking software.
There are a variety of asset tracking solutions available on the market, ranging from simple barcode tracking systems to more complex BLE, GPS tracking, or RFID-based solutions.
The best tracking solution for a business will depend on the specific needs and requirements of the organization. However, all asset management solutions share one common goal: to help businesses keep track of their assets and improve their bottom line.
How Does Asset Tracking Work In The Context Of The Circular Economy?
In a traditional linear economy, businesses and consumers alike are used to the idea of tracking assets. We keep track of our personal belongings and make sure to insure valuable items against loss or damage.
When it comes to business assets, tracking is even more essential; companies need to know the whereabouts of their products and equipment at all times in order to keep inventory levels low and avoid disruptions in the supply chain. However, in a circular economy, tracking assets takes on a whole new meaning.
In a circular economy, businesses are focused on keeping materials in use for as long as possible. This means that tracking assets is not about preventing loss or damage, but about understanding the lifecycle of a product or material so that it can be reused or recycled effectively.
As such, tracking assets in the circular economy requires a different approach than in a linear economy. Businesses need to adopt asset tracking systems that can provide real-time visibility into the full lifecycle of their products and materials, from production through use and ultimately to recycling.
By tracking their assets in this way, businesses can ensure that they are making the most efficient use of resources, and minimize waste throughout the entire product lifecycle.
The Benefits of Tracking Assets In The Circular Economy
There are many benefits to tracking assets in the circular economy, including:
1) Enables A More Efficient Use of Resources: In a traditional linear economy, goods are manufactured, used for a period of time, and then disposed of. This often results in materials and resources being wasted, as they are not used to their fullest potential.
In contrast, the circular economy is designed to keep materials and resources in use for as long as possible. Tracking assets can play a key role in ensuring that materials are used more efficiently in a circular economy, as it allows businesses and individuals to know where an asset is at all times and how it is being used.
By knowing where assets are located and how they are being used, businesses and organizations can make better decisions about when to repair or replace them.
2) Reduces the Need for New Raw Materials: Another benefit of tracking assets in the circular economy is that it can help to reduce the need for new raw materials through improved waste management.
This is because businesses and individuals will be able to see how much material they have on hand and how much they actually need.
As a result, they may be less likely to order new raw materials unnecessarily, which can help to conserve resources.
3) Facilitates Repair and Reuse: In a traditional linear economy, goods are often disposed of once they break or become outdated. However, in a circular economy, goods can be repaired or reused instead of being thrown away.
Tracking assets can help businesses and individuals to identify when an asset needs preventive maintenance, which can extend its lifespan and prevent it from ending up in a landfill.
4) Encourages Recycling: In the traditional linear economy, recycling is often seen as an afterthought. However, in the circular economy, recycling is an integral part of the system.
Tracking assets can help businesses and individuals to know when an asset has reached the end of its useful life so that it can be recycled into new products.
5) Increases Transparency and Accountability: Tracking assets in the circular economy can also help to increase transparency and accountability.
By knowing where assets are located and how they are being used, businesses and organizations can be more transparent about their resource use.
This can help to build trust with stakeholders, ensure regulatory compliance is met, and improve communication about the organization’s environmental impact.
6) Minimizes Risk: Tracking assets in the circular economy can also help to improve risk management.
By knowing where assets are located and how they are being used, businesses and organizations can be better prepared for potential disruptions to their supply chain or operations.
This can help to minimize the impact of disruptions and reduce the risks associated with resource use.
7) Creates Jobs: Tracking assets in the circular economy can create jobs as it requires businesses to develop new systems and processes for managing their products and resources.
Additionally, tracking assets can also create new job opportunities in data analysis and management.
8) Enhances Decision-Making: Tracking assets in the circular economy can also help to enhance decision-making.
By knowing where assets are located and how they are being used, businesses and organizations can make more informed decisions about their resource use.
This information can help to optimize decision-making processes and improve the overall efficiency of resource use.
9) Improves Communication: Another benefit of tracking assets in the circular economy is that it improves communication between businesses and other stakeholders.
When businesses track their assets, they are able to provide accurate information about their status and location.
This improved communication can help businesses to coordinate their efforts more effectively and avoid potential conflicts.
10) Helps Businesses Save Money: Lastly, tracking assets in the circular economy can help businesses to save money as it can help them to avoid wasting resources and improve their resource efficiency.
Additionally, tracking assets can also help businesses to identify opportunities for cost savings through product redesign or process improvements.
Tracking Assets Enables The Circular Economy
It’s easy to see why asset tracking is a key enabler of the circular economy.
By tracking assets throughout their lifecycle, we can ensure that they are reused or recycled rather than being sent to landfill. This not only reduces waste but also helps to conserve resources and save money.
In addition, asset tracking can help businesses to optimize their operations and improve their environmental performance. For example, by tracking the location of assets, businesses can reduce the need for transportation and cut their carbon emissions.
In short, asset management software is a vital tool for creating a more sustainable supply chain and economy.
Take A Step Toward Sustainability Today
A well-oiled machine, the circular economy runs on tracked assets.
With precise asset tracking in place, businesses witness optimized material use, reduced waste and emissions, and improved financial performance.
All of these factors underpin a thriving circular economy – one that’s built to last.
If your business is ready to take the next step toward sustainability (not to mention increased efficiency and cost savings), explore our asset tracking solution and request your demo below.
Last Updated on October 20, 2022 by Radiant