Circular and Lean Food Supply Chains

*Stella Despoudi*

## **Abstract**

Circular economy (CE) refers to the industrial economy that aims to achieve enriched sustainability through restorative objects and supply chain design. Many governments have put in place different initiatives in line with the CE. On the other hand, the term Lean operations refers to the reduction of the non-value adding activities and waste in a supply chain. The food sector has been criticized for its sustainability and circularity due to the high levels of food and packaging waste and at the same time the increasing costs. Although food supply chain entities have started to implement circular economy and lean practices, the current efforts do not seem to be sufficient to achieve a circular and lean food system. The aim of this chapter is to explore the possibility of a circular and at the same lean food supply chain.

**Keywords:** circular economy, lean supply chain, food supply chain, sustainability

### **1. Introduction**

In the past 20 years, interest in the notion of supply chain management has been growing rapidly in both global academia and business world. Behind this are the rapid changes in the global economic environment, the increasing variety of products, the increasing demand for delivery deadlines, the shorter product life cycle and the increasing expectations of consumers for products and services [1]. At the same time, with the continuous development of e-commerce, globalization and offshoring of production, the complexity and related risks of supply chain management also increase [2]. These new factors also promote the increasing interest of enterprises in supply chain management and re-examine their supply chain strategy.

In the early view of supply chain management, the scope of supply chain management is only discussed within the enterprise, and then it gradually derives to the relationship and cooperation between the enterprise and the upstream and downstream enterprises [3]. Moreover, it is no longer confined to the manufacturing industry, for a variety of industries, even the service industry, supply chain management has shown its significance. Today, supply chain management has become a more comprehensive concept. It covers all the processes from raw material suppliers to end customers. All the links that have an impact on cost and satisfying end customer needs are included in the scope of discussion by supply chain management.

However, at the same time, due to the increasing global environmental issues, it also puts forward new topics and higher requirements for modern supply chain management [4]. Since the industrial revolution in the 18th century, human society has undergone tremendous changes with the development of science and technology. In this process, the production technology is progressing rapidly, the scale of production is expanding constantly, and the production efficiency is advancing rapidly [5–7]. However, the progress of society and science and technology not only brings great economic benefits to people, but also has a tremendous impact on the environment. People blindly pursue economic benefits, thus excessive exploitation of natural resources, not only lead to regional environmental pollution, but also make some global environmental problems such as global warming, biodiversity reduction and marine pollution [8, 9]. Moreover, statistics show that more than 2.4 billion people have been affected by climate-related disasters from 2002 to 2012, an increase of 700 million over the last decade [10]. These environmental issues have threatened the living environment of human beings and will affect the sustainable development of society. As a result, people began to pay attention to the seriousness of environmental problems and try to seek measures for improvement and sustainable development.

Governments in various countries have promulgated laws and regulations to regulate green manufacturing in enterprises in the early 21st century. The EU has promulgated RoHS, WEEE and REACH directives, which regulate the supply chains of different industries from different aspects, requiring them to become a greener supply chain [11]. Meanwhile, some international NGOs are also involved in this series of actions. The International Organization for Standardization has developed ISO14000 series environmental management standards to manage and plan the activities, products and services of all organizations, including global enterprises and social groups [12].

Academia has also paid more attention to and discussed the environmental responsibility of enterprises. Although there are many debates on corporate social responsibility, most scholars agree that enterprises, as an important factor of social composition, are obliged to undertake certain environmental responsibilities [13]. Elkington [14] also put forward the theory of triple bottom line in 1998, which expresses that corporate profit, social responsibility and environmental responsibility are the foundation of enterprises, and also the foundation of enterprises' continuous development and long-term development [14].

Finally, with the waste of resources and the increasingly serious environmental pollution, consumers have also begun to pay more attention to the environmental protection behind products and services [15, 16]. The change of environmental willingness of American consumers from 2008 to 2013. It can be found that 71% of consumers will take environmental factors into account when shopping in 2013, up from 66% in 2008. This means that companies need to meet the growing environmental needs of consumers, so companies also need to make the supply chain greener, which can also enable them to have more competitive advantages in the market competition. In the context of these three factors, enterprises need to make their supply chains more environmentally friendly and sustainable, whether from the perspective of government mandatory supervision, or to meet the needs of consumers, or for the sustainable development of companies.

As an industry closely related to people's daily lives, food industry has huge direct or indirect impact on the environment. Moreover, as an important part of the global economy, the food supply chain is also closely related to the consumption of natural resources and the emission of pollution [17]. At the same time, the research also shows that activities related to food packaging, transportation and waste disposal account for 5–10% of global greenhouse gas emissions, and this figure is expected to continue to rise [18]. On the other hand, food safety is an important topic of global concern, and also the top priority of the food industry. This means that for food companies, under the important premise of ensuring food safety, they

#### *Circular and Lean Food Supply Chains DOI: http://dx.doi.org/10.5772/intechopen.99769*

also need to solve the challenges from the environment, so that their supply chain need to have as little impact on the environment as possible [19]. As a result, an environmentally friendly and sustainable supply chain is particularly important for the food industry.

In such an overall environment, many new concepts about supply chain management have emerged, including green supply chain management, sustainable supply chain management, closed-loop supply chain, lean supply chain, reverse logistics and so on. These concepts provide enterprises with a more environmentally friendly supply chain development model from different perspectives, enabling them to reexamine their supply chain strategy [20]. Similarly, circular economy, as a relatively new concept, emphasizes the sustainable use of resources and energy in the economic activities, thereby minimizing its impact on the environment [21]. Another supply chain practice which is hugely involved in the manufacturing industry is the philosophy of Lean production systems from Toyota [22]. The purpose of lean supply chain management to eliminate waste and non-value adding activities by optimizing the supply chain by adopting a wide range of lean practices/tools (e.g. Total productive maintenance, just in time, 5 s, Total quality maintenance and Kanban card). Both lean and circular economy are becoming essential elements for successfully managing supply chains and in particular food supply chains. However, their interrelationship has not been widely discussed especially in the food sector.
