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Circular Economy

How does collaboration in the value chain work?

Circular economy requires system thinking: businesses should no longer be focused on personal financial gain alone, but on optimizing the entire system. This requires cooperation. Through collaboration, business can enhance their positive impact on all stakeholders involved, society and the environment. (Kraaijenhagen, Van Oppen & Bocken. 2016, p. 26)

Examples of forms of cooperation in a circular economy and a roadmap to address this can be found below.

Cooperation within a circular economy

Successful collaboration requires systems thinking. By considering the whole system’s interests, risks and strengths of all stakeholders are taken into account in decision-making processes and a decision follows an integrated approach. The dilemmas in the current system are too complex to be solved by one player, and therefore cooperation is necessary. Three types of collaboration can be distinguished:

  • Collaboration within an organization
  • Collaboration between organizations
  • Collaboration with consumers

(Kraaijenhagen, Van Oppen & Bocken. 2016, p. 28)

Inter-organizational collaboration

More collaboration between technical and financial departments is essential for integral innovation in product development, in order to be able to take into account the payback and investment costs in the development of the product (Rizos, Behrens, Kafyeke, Hirschnitz-Garbers, & Joannou. 2015). When designing for disassembly, collaboration between designers, waste processors and producers is essential (Kraaijenhagen, Van Oppen & Bocken. 2016, p. 12).

An employee with enthusiasm for circular economy can convey this to the entire organization through good leadership. Good leadership is characterized by targeted interaction and collaboration with colleagues and employers. (Kraaijenhagen, Van Oppen & Bocken. 2016, pp. 39-41)

Intra-organizational learning partnership

‘Material pooling’ or Industrial symbiosis

Companies can work together to seize the opportunities that lie in the areas of sharing materials, through industrial symbiosis. This is a partnership in which residual flows of company A are exchanged with company B, who can use the residual stream as resource in its own processes. Good cooperation is needed to achieve the necessary infrastructure in the form of physical pipeline as well as virtual databases to identify material flows. The advantage of this collaboration is a reduction in waste and an additional revenue stream. (Kok, Wurpel, & Ten Wolde. 2013, p. 22)

A successful example of Industrial Symbiosis is found in an industrial eco-park in Kalundborg in Denmark. The success of the many material exchanges located in the industrial park lies in the trust between the different companies and the open, flexible way of communicating. Industrial symbiosis is difficult to establish because trust is not easy to built, and current regulations ask for standard and conservative solutions and do not allow for solutions through cooperation. (Van Eijk, 2015, p. 26)

Roadmap & practical tools

Successfully implementing collaboration in a business requires an integrated approach. Good co-operation is associated with innovations in the business model and in the tools that are used. A comprehensive approach to become a circular and collaborative business, includes 10 steps, according to Christian Kraaijenhagen, Cecile van Oppen and Nancy Bocken, which are:

  • Leadership
  • Vision and goals
  • Selection of pilot projects
  • Sketch the system
  • Visions draw with partners
  • internal transformation
  • Circular business model innovation
  • Internalizing externalities
  • Contract
  • Scaling from pilot to circularly business

(Kraaijenhagen, Van Oppen & Bocken. 2016)