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The closed loop: Why the circular economy is revolutionising field logistics
Get in touchThe traditional linear economy model – take, make, and dispose – is fundamentally unsustainable. With increasing resource scarcity and rising consumer demand for corporate transparency, an evolving ecosystem is emerging: the Circular Economy.
At its core, the Circular Economy aims to keep products, components, and materials in use for as long as possible, minimising waste and regenerating natural systems. For field service organisations, this isn’t just an environmental initiative; it’s a profound shift in operational strategy, turning what was once a cost center (waste management) into a value stream, in addition to reaching company or corporate ESG goals.
The reality of reverse logistics: Turning waste into value
In the field service sector, the Circular Economy has moved past the “green-washing” phase to become a tangible operational engine. This shift is powered by Reverse Logistics – the process of moving assets from the point of consumption back through the supply chain to recover value. Similar to our customers’ traditional forward logistics needs, the reverse flow is placing growing emphasis on controlling the speed, efficiency, and traceability of recovered components or devices. This is essential for preparing them for either re-use or environmentally responsible disposal. Rather than viewing a faulty part or an end-of-life asset as waste, a circular model treats it as a source of inventory that can either be reused or repurposed. By reclaiming high-value mechanical, electrical and electronic parts, organisations can create a resilient secondary supply of components that significantly insulates them from the volatility of global supply chain disruptions.
This isn’t just about environmental stewardship; it is a fundamental shift in business logic. For example, repairing and re-deploying a single printed circuit board (PCB) can cost a fraction of purchasing a new one, while simultaneously avoiding the carbon-heavy manufacturing process and the extraction of rare-earth minerals. In an ‘always on, anytime, anywhere’ technology environment, where equipment uptime is critical and component costs are rising, the ability to “mine” your own returns for spare parts is a competitive necessity.
The market size for this activity underscores its strategic importance: the global reverse logistics market was valued at over $823 billion in 2024 and is projected to see significant growth, with some estimates putting the CAGR as high as 17.4% through to 2033. This is being driven not just by retail returns, but by the B2B sector, where B2B and commercial returns accounted for the largest share of the Reverse Logistics market in 2024.
The four pillars of circular field service
For field service logistics, the circular model can be summarised by the 4Rs:
- Reduce: Minimising environmental impact at every stage
- Reuse: Finding a new application for a whole product or component.
- Recycle: recovering valuable materials responsibly
- Recover: unlocking new revenue streams
While all 4Rs are vital, the “Reuse” and “Recycle” pillars are the most critical starting point. Companies must move away from viewing returns as a “cost of doing business” and instead see them as strategic assets to be extended.
Extending the Lifecycle: Reuse and Recycle:
In field logistics, the “end of life” for an asset shouldn’t mean the end of its value. When a part can no longer be repaired to its original spec, the focus shifts to two high-impact recovery streams:
Reuse: This involves giving components a “second life” in non-critical roles. By finding these secondary applications, field service teams keep the embodied carbon of an asset productive and delay the need for new equipment procurement.
Recycle: When an asset is truly exhausted, it becomes a source of raw materials. Modern field logistics treats defective circuit boards and hardware as an “urban mine,” recovering rare-earth metals and high-grade plastics. This feeds the manufacturing loop and reduces reliance on volatile global raw material markets.
Empowering the “Technician Ambassador”
The involvement of field installers / technicians / engineers is essential for ensuring that the loop is fully completed and effective. They are responsible for the acquisition and sorting of assets that determine their next path – be it repair, remanufacture, or recycling.
Beyond their technical role, technicians serve as Brand Ambassadors. Often the only physical touchpoint a brand has with its customers and communities they serve, their ability to make real-time disposition decisions directly impacts customer satisfaction and the speed of the circular loop. Providing field service teams with the appropriate mobile technology is key to preventing valuable components from being abandoned in a van “graveyard” or a forgotten warehouse corner. This, in turn, boosts product availability by ensuring that items are repaired promptly and returned to stock for use.
Operational and financial benefits of circular logistics
By integrating Circular Economy best practices into the field service logistics process can offer triple-bottom-line benefits – financial, operational, and environmental.
1. Cost reduction and value recovery
A robust reverse logistics process can transform returned or defective parts from waste into valuable inventory.
- Reduced costs: Efficient systems and processes cut costs related to disposal, new raw material purchasing, and storage.
- Avoidance: The most sustainable and profitable part of a circular economy is avoiding the return entirely. Predictive maintenance can help identify failing parts early, allowing for proactive repairs that extend asset life without a full “return and replace” cycle.
- New revenue streams: By quickly processing and re-selling reconditioned or refurbished items, companies can recoup profit margins instead of losing inventory. Companies that succeed at implementing Reverse Logistics often increase their competitiveness.
- Optimised inventory: Real-time visibility into reusable components minimises overstocking and obsolescence.
2. Sustainability and Regulatory Compliance
The Circular Economy is vital for businesses aiming to reduce their environmental footprint and comply with increasing regulation.
- Waste minimisation: Proper handling ensures that fewer materials end up in landfills. For electronics in particular, Reverse Logistics ensures that components are recycled in accordance with current standards.
- Urban Mining: There is significant potential for extracting rare-earth metals and valuable materials from recovered sensors and cannibalised Printed Circuit Boards rather than letting them go to waste.
- Reduced emissions: Circular Economy practices extend product lifecycles, which avoids the associated environmental burdens of manufacturing and distributing replacement products, including the depletion of limited resources and emissions. For systems like Heating, Ventilation, and Air Conditioning (HVAC), proper maintenance extends lifespan and optimises a building’s energy efficiency and reduces carbon emissions.
Technology: The enabler of the closed loop
Managing the complex two-way flow of materials – simultaneously delivering new parts and recovering old ones – requires a sophisticated digital ecosystem. It is no longer just about tracking a delivery; it is about synchronising field activity with global inventory.
- Integrated Field Engineering Apps: Modern circularity relies on Field Engineering Apps that connect directly to Warehouse Management Systems (WMS). This integration allows the back office to verify the condition and location of a returned part instantly. Crucially, these apps treat engineer vans as mobile inventory locations, providing real-time visibility into the “trunk stock” of both new and used components across the entire fleet.
- Smart Asset Tracking (RFID): Advanced tracking, such as RFID tags, allows for individualised asset histories. By “tagging” a component, companies can automate the disposition decision – repair, remanufacture, or recycle – the moment it is scanned by a technician. This removes human error and ensures high-value assets are fast-tracked for refurbishment.
- PUDO Locker Networks: To maximise efficiency, forward and reverse flows are increasingly managed through Pick-Up Drop-Off (PUDO) locker networks. This allows a technician to collect a new part and immediately deposit a defective one into a secure, tracked location. This “one-stop” exchange reduces fuel consumption and ensures that “dead” assets are consolidated and returned to the repair centre days faster than traditional methods.
- Optimised Routing & Standardisation: Field service applications must seamlessly merge forward and reverse routes. A technician can deliver to Site A, collect a return, and drop it at a PUDO locker on the way to Site B – all on a single, fuel-efficient path. By enforcing these standardised digital processes, organisations reduce “cycle time” (the time from return to re-processing), which is the most critical factor in making a circular loop profitable.
By making field logistics fully circular, businesses move from simply fixing problems to actively managing the entire product lifecycle, securing a more profitable and sustainable future.
Learn more about Unipart’s Field Service Logistics and Circular Economy services and reach out to our team.
