Circular Economy Supply Chains: From Chains to Systems

A circular economy perspective embraces a systemic, cradle-to-cradle notion that everything is designed to be reused as long as possible and then recaptured and repurposed when reuse is no longer possible. Designing for a circular economy ecosystem requires a holistic, integrative viewpoint, spanning all aspects of design and development and considering many supply chain actors, far beyond that of traditional supply chains. This edited book adopts a biomimetic lens, highlighting the need for cross-industry flows and need for different actors (beyond producers and consumers) in circular value cycles. Enablers such as incentives and/or legislation are also discussed. While biomimicry provides the structure for organizing this book, individual chapters build on other theoretical lenses and concepts, such as stakeholder theory, etc. The intent is to move beyond a dyadic (buyer–supplier) view, embracing a holistic network or ecosystem view, to consider a cross-industry system perspective, where there is a diversity of actors (covering four actor groups: producers, consumers, scavengers, and decomposers) needed for a working ecosystem. This edited book offers a comprehensive overview of system components and actors, including how the circular economy adds value, the role of producers and consumers, the spectrum of recovery possibilities to return products back to the consumption supply chain, and the essential role of information management.

Circular economy (CE) has gained the attention of the business community with the promise of several trillions of dollars to be gained from finding productive uses for waste materials, and developing new business models focused on extending and reimagining the useful life of products. Industrial symbiosis (IS) involves the shared management of resources among multiple firms, most often within some geographic proximity. IS is particularly focused on the reuse of secondary materials, such as industrial by-products, for which conventional recycling does not exist. IS and CE represent a radical reconceptualization of business models from individual to collective competitive advantage with private and public benefits. IS has been recognized as a novel strategy for businesses and regions interested in implementing the CE. In this chapter, we explore the conditions and circumstances in which IS could play a pivotal role in increasing circularity and sustainability in diverse supply networks.

To create circular economies, we need supply systems to convey materials between their use lives. Often, though, it is not possible to control an entire supply network. Without a coordinator to implement circular economy principles, how can circular supply systems come to be? This chapter sets out to build on complex adaptive systems (CAS) theory and circular economy research to conceptualize how information flows between actors can facilitate the emergence of a circular supply system. It begins by outlining why a supply network can be considered a CAS, as well as the CAS progression from information to adaptation to emergence. Next, it argues that information on local supply networks, extended supply systems, and biosphere impacts is particularly important for circular production. Finally, it concludes with two potential types of emergence that can stem from these information flows: (1) new actor roles and networks and (2) new spatial and temporal patterns. Ultimately, this conceptual overview aims to give researchers and practitioners a CAS frame for thinking about how continual adaptation to information flows can enable change toward circular supply systems.

Manufacturing companies today are part of a dynamic, globalized system of production and consumption. Globally dividing labor is now the predominant way of organizing business, but it is clear that the resource demands of linear supply chains have created vulnerability and harm in the system and beyond. The authors draw inspiration from ecology to explore the role of manufacturers in the transition from linear to circular supply chains. Borrowing the adaptive cycle model, originally developed to describe dynamic ecological systems, they employ case examples to illustrate the ways that supply chain management is being reimagined in the shift to a circular economy. This conceptualization uses the adaptive cycle to consider the transition from linear to circular supply chains as part of broader systems change, and the opportunities for manufacturers to play a transformative role in shaping a sustainable future.

In research on the circular economy, business models are often taken as a focal point since their essential functions are both to create value and to capture part of that value. This chapter investigates whether and how circular business models can be “opened up” to creating and capturing value by utilizing a firm’s main asset not only in its own operation but also in other firms’ businesses. We hereby take the perspective of producing companies which face various challenges over the entire product life cycle and empirically analyze a case of five companies which are part of a joint innovation toward circularity in the plastics industry. Building on a grounded theory approach, we propose a new framework for companies which combines insights about open business models with circularity. When moving toward circularity, producing companies are advised to expand their dyadic perspective of suppliers, on the one hand, and customers, on the other hand, to a network perspective and open their business models.

This chapter shows how different recycling locations influence closed-loop supply chain (CLSC) cost and carbon dioxide equivalents (CO₂e), as well as reveal competitive recycling and manufacturing locations, including relevant distance- and location-related factors, for achieving very low cost and CO₂e CLSCs supporting circular economy. Exploratory data analysis is used to analyze results from simulations based on empirical data and market rates relating to textile and clothing CLSCs. The results show that most very low-cost and CO₂e CLSCs consist of fabric and garment manufacturing located at the same or nearby locations, and whose labor costs and electricity CO₂e are low, whether fiber recycling facilities are located in proximity to used garment sorting facilities or not. Scenario and sensitivity analyses of important cost and CO₂e factors for recycling location competitiveness reveal that increasing used garment prices makes locations with high import duties lose competitiveness, and that varying water freight CO₂e changes comparative location competitiveness.

Recently, 181 CEOs of notable corporations signed a joint statement at the Business Roundtable (2019) on the “Purpose of a Corporation” – declaring its aim as the creation of benefits for “all stakeholders.” This will likely accelerate the circular economy transition process. Harmonizing the interests of various stakeholders is essential for managing successful organizations and supply chains, which is similar to the first principle of using natural ecosystem thinking. According to that principle, it is essential to strike a balance between the producers, consumers, scavengers, and decomposers. We draw on stakeholder theory to identify various challenges and risks that restrict businesses from building sustainable circular systems. We turn our attention toward increasing the numbers of “scavengers” and “decomposers” in the system for attaining sustainable growth. Our emphasis is on (1) empowering organizational life cycle stages, (2) designing for “decomposability” and “scavengers,” and (3) suggesting the use of advanced optimization models for harmonizing stakeholder relationships.

Linear supply chain models often overlook the impact that end-users (i.e. people who “consume” or otherwise realize the intended value of the product or service) can have on core supply chain processes. As the global trade environment rapidly evolves, business and government leaders are seeking more regionalized, sustainable circular models that position “consumers” at the center of dynamic value creation and consumption networks. This chapter outlines some ways to leverage end-users of the value chain to inform development and sustainment of circular supply chain strategies and processes. First, we describe the economic, social, and ecological trends that motivate organizational leaders and managers to implement more circular supply chain models. We then provide specific ideas on how managers can leverage end-users to close, slow, narrow, intensify, and dematerialize core supply chain processes.

The circular economy is a system that aims to conserve resources at every level for as long as possible with a minimization of waste. The core concept of the circular economy is to improve resource efficiency and prevent valuable materials from leaking out of the system. Better use of increasingly scarce resources can provide both economic and environmental benefits. When excess inventory, returned products, and end-of-life products are disposed of improperly, unnecessary waste is created, often with a detrimental impact to the environment. An effective system must exist to facilitate the proper handling of these products, and secondary markets are a crucial component in this system. In this chapter, we discuss the secondary markets’ role as an important mechanism for achieving a circular economy.

Overconsumption of resources has become a global issue. To deal with resource depletion and mitigate these impending crises, the circular economy (CE) holds some promise. A wide range of performance measurements for CE have emerged over the years. However, with increasing complexity of supply chains, appropriate and potentially new performance measurements are needed for effective CE management. Blockchain is an innovative technology that may advance CE development. This chapter provides an overview of the potential linkages between blockchain technology and CE from sustainability perspectives – the specific focus will be on the performance measurement of reverse logistics activities. One of the main findings indicates that both blockchain and CE performance measurements – especially reverse logistics processes – are still evolving in both theory and practical developments. Future directions with a critical analysis including research and theoretical applications will conclude this chapter.

The earth’s carrying capacity cannot withstand the pace of consumption resulting from current economic models, mainly the linear economy (LE) built on a throwaway culture. In the last few decades, the concept of a circular economy (CE), aiming to design waste out of the economy and mimic ecosystems, emerged as a strong alternative to LE. Being at the heart of the economic landscape, supply chains (SCs) need to respond to the necessary shift to CE. In so doing, the planning and execution of circular supply chains (CSCs) require a broader comprehension of CE and more sophisticated and large-scale analytical decision models. This chapter surveys extant literature on available best practices and quantitative models for sustainable supply chains (SSCs) and offers a new definition of CSC. Mapping on the knowledge extracted from this classification, potential gaps and strengths in the literature are identified. Key research papers on the “closed-loop” and “open-loop” ends of CSCs are highlighted. Challenges in developing CSC performance indicators and prescriptive models are emphasized.

This chapter empirically investigates the main drivers of the circular economy (CE) and sustainable development (SD) of European countries. The European Union (EU) legislation imposes equal rules for the members who should be followed to achieve CE and SD. This chapter gives a critical overview of the related literature on this topic. The second part focuses on measuring the efficiency of EU countries in achieving CE and SD via a nonparametric approach. Furthermore, the results from the efficiency evaluation are used as a dependent variable in determining which economic, social, institutional, and other factors have the greatest influence on CE and SD achievements. The nonparametric approach consists of selected models of data envelopment analysis (DEA), as this is a methodology useful in constructing a ranking system based on selected criteria. The results indicate that on average, the most efficient countries were (besides Malta and Luxembourg) the Netherlands, Poland, Germany, Sweden, Denmark, France, and the United Kingdom. The worst performing ones were Cyprus, Spain, Greece, Belgium, Portugal, and Croatia. The second part of the research indicates that the resource production and corruption perception index has the greatest effect on the efficiency scores, followed by education attainment. The research and development (R&D) variable is not significant in the observed sample. Based on these results, specific policy recommendations are given at the end of this chapter.

The current rates of population growth necessitate the need for more sustainable food production. The breeding of insects could be a possibility. Since the turn of the millennium, there has been a clear increase in the interest in breeding insects in Europe. The main products from insect farms are insects and proteins, but insect farms also produce insect frass (insect feces). Due to its high nutritional content, insect frass has a great potential to be upcycled for the production of fertilizers, compost material, soil improvers, or growth enhancers. The use of insect frass as fertilizer can help limit the use of agrochemicals. By reintroducing valuable material into the food production chain, the land application of insect frass is consistent with the circular economy’s principles. Before insect frass can be introduced to the market as a fertilizer, sanitizing treatment is needed in order to eliminate possible microorganisms that are harmful to health. In Europe, no legislation specifically developed for the use of insect frass as fertilizer has been formulated yet. Due to the absence of such European Union (EU) legislation, the possibilities of upcycling frass remain relatively limited. In this case study, focus is on the regulatory barriers of upcycling frass in Denmark.

The implementation of circular economy (CE) initiatives has come under the spotlight in recent years with research ranging from business strategy and practices, supply chain implications, and regional or national policy developments. This highlights the multilevel nature of research and importantly the different scales of action required to move toward the CE. This chapter specifically addresses this issue of levels and scales by presenting and analyzing three complementary cases in the agri-food sector. Lessons learnt from this analysis include the need to consider value and impact across multiple levels and how companies and their supply chains can contribute to the scale of action needed.

Blanc de Gris (BDG) is producing oyster mushrooms from organic waste (coffee grounds and spent grains) in Downtown Montreal. This project brought the two co-founders of this circular enterprise into a challenging journey. Based on an ethnographic account of BDG, including observations, interviews, and a four-month internship into the business, this chapter highlights the difficulties of creating an industrial symbiosis. From gaining legitimacy among their peers and bankers to facing operational problems, this chapter outlines the network’s resilience behind this story. This chapter ends by discussing the case in regard to the challenges related to the emergence of circular business models, identified by a report from the Organisation for Economic Co-operation and Development (OECD).

Circular tourism is not a well-established field of research. In this case study, we address sustainable tourism as an approach that goes beyond the optimization of actions and value-added of the individual tourism actors and moves toward a destination approach, with the four elements – cultural, environmental, economic, and social benefits. A focus on partnerships that are addressing a specific destination has made it possible to develop initiatives that go beyond the traditional “green” approach to sustainable tourism, including sustainable transportation infrastructure, waste management, and protection of cultural and natural heritage. The collaboration in the network is central for the development of the understanding of culture and nature as a “common good” that all current and future actors can benefit from, if it is preserved and well maintained. The tourists have become central actors in this approach, as they take part in this regeneration of both nature and culture and therefore change roles from rather passive consumers to active actors in the destination.

The purchasing power of public sector organizations can be used to promote strategic policy objectives such as sustainability, innovation, and the concept of circular economy (CE). In Denmark, total greenhouse gas emissions from public procurement (PP) activities comprise approximately 12 million tons CO₂eq/year. Thus, if sustainability criteria and CE are considered in PP, there is a potential for environmental savings and for driving innovation toward circularity. Directive 2014/24/EU on PP makes it possible to include sustainability criteria or CE in public tenders. In order to aid this process, the case company Vraa Dampvaskeri has, together with researchers from Aalborg University, developed a guide for sustainable PP focusing on workwear and laundry services. In this chapter, we explore how this guide has been used in practice. This includes a consideration of the way in which such a guide can aid the process of setting sustainable and circular criteria in public tenders, thus supporting a transition to CE. Although the guide is now supported by national criteria for textiles in the Danish Partnership for Green PP, these tools cannot stand alone, as their use by PP officers is voluntary. Market engagement is imperative for inclusion of sustainability and CE in tenders, and the involvement of user groups is essentially important.

System change for the circular economy (CE) in the society requires innovative thinking in refining existing material into new resources and collaboration with different actors. We introduce examples of decomposers with different roles in a circular ecosystem. Examples from reusers of waste material, users of recycled materials, designers of new technologies, and facilitators of CE networks are introduced to illustrate how companies contribute to a circular ecosystem in the clothing and textiles industry. Moreover, we illustrate the networked nature of supply chains of circular materials.

This case study shows how Osklen, a 30-year-old fashion brand in Brazil that focuses on Brazilianness and sustainability, has been facing challenges in the last 10 years pioneering the adoption of recycled cotton in its products. By taking the lens of biomimicry and supply networks that encompass vertical, horizontal, and diagonal ties, the case exposes how the weak links in the transition to circular fashion limit advancements. In a field such as sustainability where lack of transparency prevails and there is decoupling between practices and communication, consumers are often unaware of what is being done behind the scenes, and pioneer fashion brands may not benefit from sustainable and circular fashions. Besides the challenges at the consumer front, the shift to circular fashion is hindered by having scavengers as the weak link in the supply network given the lack of financial incentives, excessive informality, and misguided marketing from larger brands.