A closed-loop supply chain is ideally one that completely reuses, recycles, or composts all materials used to manufacture a product, as well as the end product itself at the end of its lifetime. The aim is to maximize use of natural resources and minimize environmentally damaging wastes.

Natural ecosystems tend to be closed-loop supply systems. However, for consumer goods, a system of total closure might only be achievable for products made entirely from natural components like organically grown, unpackaged farm produce, and perhaps some timber products. Manufactured goods that use synthetic materials are likely to have inputs and outputs that cannot be recaptured and therefore a closed loop will only be partial, involving some, but not all, of their materials.

To achieve a partial closed loop, manufacturers ...

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