Organisations can develop different value network strategies in a circular economy:
Industrial Symbiosis: The waste stream of one company is used as input for other company/companies, usually in a specific regional setting. Some of your waste could be useful for a local manufacturer to develop new products with it.
Take back management: Organising logistics (ie. via network collaboration) for taking back end-of-life products from the customer, facilitating the execution of a sustainable materials management strategy (I.e. returning hotel room furniture when it needs to be remanufactured for a second life).
Platform approaches: An online or on-site solution enabling shared use of assets (ie. materials, knowledge, infrastructures, time, or even space). It could be using a platform for e-mobility in one destination.
Cooperation with customer: Organisation in which company and customer effectively collaborate to create and capture value, developing new circular business models. This strategy may be closely related to previously mentioned take-back systems too.
Proximity or localisation: Organising the physical flows of resources and products on a local scale (i.e. local supply chain management, local 3D manufacturing, etc.). Products based on proximity are part of this strategy; zero mile domestic products.
Value network collaboration: Collaboration between different businesses, government bodies, local communities, NGOs or other organisations throughout the value network to achieve a common goal.
Connecting and reinforcing a network of actors within their supply chain and beyond, this is, creating a value chain network, by managing transparency of data, transactions, material flows, responsibilities and sharing benefits is a key factor for closing resource loops and implementing circular practices.
Enablers and barriers for the establishment of a value network for circular cross collaboration
Enabling factors
- Guaranteeing a transparent communication and exchange of information and knowledge (i.e., about products, processes, etc.) with all involved stakeholders (within and/or across value chains and sectors).
- Switching from protective approaches towards more open and collaborative structures.
Making sure that collaboration is pragmatic. - Having a common understanding of the relation established and mutual trust. Agreeing on a strategic long-term vision and framework by all involved stakeholders.
- Guaranteeing that all partners are committed, sharing common goals, values, expectations and mutual opportunities (i.e., long term views and short-term gains).
- Understanding the entire value chain and identifying the extra value gained through the establishment of the collaboration.
- Providing mutual support.
- Establishing a progressive leadership that will be able to identify strategic champions, promote shared values and mindsets and involve relevant stakeholders.
- Clear chain coordination, contracting, and financial mechanisms.
Barriers
- Data conflicts, as a result of lack of information or differences on interpretations Relationship conflicts, due to the existence of stereotypes, miscommunication or strong emotions and negative behaviours;
- Difficulties to change organizations’ culture and organizational foundations
Legal and administrative burdens (i.e., institutional system that is aligned with the principles of linear economy); - Mental, personal barriers;
- Structural conflicts, including time/geography related constraints, differences in role assignments and unbalanced power levels over resources;
- Lack of ICT solutions that may guarantee the availability of efficiency data for all stakeholders in a transparent way;
- Obstacles arising from differences in the objectives and values of involved stakeholders Complexity of value chains;
- Lack of a skilled staff;
- Difficulties that industrial customers may have for understanding the value or the life-cycle perspective of products and services;
- Potential conflicts between sustainability and profitability;
- Lack of agreement on how to spread the costs involved in developing circular solutions and the Lack of financial solutions;
- Lack of support for the integration of sustainability objectives in products and services.