Transforming Linear Production Chains into Circular Value Extended Systems

Abstract

Different schools of thought, theories, and concepts have been developed to diminish the social and environmental impact that the take–make–dispose linear economic model has produced. Such is the case of industrial ecology (IE) and circular economy (CE). However, the principles and guidelines in IE literature are focused more on resource efficiency without considering the social externalities. In the same sense, CE literature has not brought clear guidance about how to circularize linear businesses and is mainly focused on recycling strategies, which could be the least profitable and attractive option among the circular business models (CBM). Based on the sustainable wealth creation through disruptive innovation and enabling technologies (SWIT) framework and the business model framework, we have developed a roadmap to transform linear value chains into an industrial ecology cluster of zero-waste chains and enabling institutions called a circular value extended system (CVES), which is able to exploit non-usual business opportunities of waste and residue revaluation. This systemic approach opens the possibilities of creating a socially inclusive, environmentally resilient, and economically viable system of capital. A case study is presented to clarify the design process and application of the framework. Our contribution entails guidelines to transform linear value chains into a cluster of circular economy systems capable of producing sustainable increasing returns to benefit multiple regional stakeholders.

Circular Business Model Frameworks: A Review

“…Value creation and delivery largely depend on internal and external activities to achieve specific goals and targets. Within the (internal) boundary of an organization, several factors were found critical on the issue, such as managerial practice and capability enhancement [110,111], organizational strategy (proactive/reactive) [109], consideration of internal and external contextual factors [103,112], fulfilling legal requirements [112], well-being of people, nature, and culture [110,113], understanding of monetary and non-monetary aspects of business [110], firm competitiveness and profitability [114], adoption of cost-competitive process [113], internalizing social, environmental, and territorial value [115], asset management [116], business model experimentation [7], building choice architecture [109], technology adoption [117], societal expectation/ambition [118], green and sustainable procurement [119], technological innovation [107], disruptive innovation [118], and corporate social responsibility application to entire network/suppliers [107,112]. In the CBMI process, partnering with external partners and stakeholders eases the value-creation process.…”

“…Both internally and externally, some of the factors that are required to be considered for CBMI were eco-efficiency [117], exchange of information [107,120], shared business value among ecosystem actors [107,110,111,115,118,121], value co-creation [110,113], promotion of collaboration between internal and external parties [103,112], pursuing cradle to cradle (C2C) approach [110], enabling technology [118], energy mix [122], integrated retail network [108], value creation by value recovery [112], sharing economy and collaborative consumption [107,116].…”

Probability of occurrence of the circular economy model in a company that provides the drinking water service in Cajamarca - Peru

“…El panorama del agotamiento y contaminación de los recursos fue advertido ya hace varias décadas atrás por teóricos economistas, cuando escudriñaron la relación entre los recursos naturales y el crecimiento económico, demostrando con la Ley de Rendimientos Marginales Decrecientes una asociación negativa, que en la actualidad sigue vigente [12], y que se incrementa años tras año. Nutridas posturas son las que tratan de explicar éste funesto resultado, así tenemos: el progreso tecnológico [13] y [14], el aumento de la población [15] y extensión de la urbanización [16], [17] y [18], la incipiente gobernanza en los países [19] al abuso en la utilización de los recursos finitos y esquemas de crecimiento económico [20], además de intereses de las economías internacionales [21], el consumismo [22], [23] y otros más, no obstante, uno de los factores preponderantes que ha contribuido decididamente a éstos hechos es la citada "economía lineal tradicional de «tomar, usar, desechar» [24] basada en el consumo de grandes cantidades de energía y de materias primas logrando el auge del desarrollo industrial y de un nivel de crecimiento sin precedentes en la historia de la humanidad, con llevando al surgimiento de modelos económicos, como el capitalismo [25]. Parte importante de los actuales procesos industriales se adaptan al modelo lineal "extracción-transformación-usoeliminación", que presta escasa atención hacia los productos, sus componentes o los recursos empleados en su producción, siendo utilizados irracionalmente [26].…”

Critical Success Factors for Circular Business Model Innovation from the Perspective of the Sustainable Development Goals

“…Thereby, innovation research offers tools and mechanisms supporting the highly complex process of creating circular business models [18][19][20]. For example, frameworks have been developed connecting innovation factors and business model innovation [21,22]. The importance of connecting the research streams is strengthened, among other factors, by the central significance of an innovation strategy for circular business model innovation [23].…”