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Summary Papers GEO3-2122 Business Sustainability and Innovation
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ReadingsCircular manufacturing systems
Amir Rashid, Malvina Roci and Farazee M.A. Asif
(Rashid et al., 2020)
The current linear ‘take‒make‒use‒dispose’ approach is detrimental for the sustainability of our
existing and future society since the natural resources and the waste-carrying capacity of Earth
are limited. Global resource extraction = aggregate growth of 45%
In the EU-28, manufacturing generated 10.3 per cent of the total waste in 2016, being the third-
biggest contributor after construction and mining. The manufacturing sector’s ambition to reduce
resource extraction and waste can be a strong driver to closing the loop of products and
materials, aiming to maximize the use of added value and recovery of materials for next-use
cycle, respectively. However this is not what in the linear manufacturing the products are made
for.
Closed-loop systems= are systems that aim at value recovery through reuse, remanufacturing
and material recycling are viewed as indispensable for sustainable development. Resource
conservation, waste reduction and environment protection are regarded as the main drivers for
closing the loop of the material ows
Closed loop supply chains= are de ned as ‘the design, control, and operation of a system to
maximize value creation over the entire life cycle of a product with dynamic recovery of value from
di erent types and volumes of returns over time’. focus on taking back products from customers
and recovering added value by reusing the entire product and/or some of its modules,
components and parts.
Reduce= the reduced use of resources in pre-manufacturing, reduced use of energy, materials
and other resources during manufacturing, and the reduction of emissions and waste during the
use stage.
Remanufacturing= remanufactured components in new products, or whether remanufactured
products need to be declared as ‘second-hand’. With new adjustments and improvements.
Wooden furniture that becomes wooden chips
Products in the technical loop as those to be designed so that the materials they contain can be
returned for reuse, remanufacturing or recycling.
Business model= Closing the loop by intention rather than by chance strongly advocates for
development of innovative business models. Therefore, service-oriented business models have
high potential to contribute to sustainable development.
Product design= the product need to be design intentionally for closing the loop. Strategies such
as design for long life, design for service, reuse, remanufacture and recycling, are strongly
connected with the value proposition part of the business model that a company intends to use.
Supply chains= the forward and reverse product ows in the manufacturing system are duly
integrated. Manufacturing systems of the linear paradigm have achieved excellence in design and
optimisation of forward ows where the performance of supply chains is determined by certainty
in quality, quantity and timing of product ows.
ICT (information and communication technologies) infrastructure acts as the arteries in the
body of such a system. Modern manufacturing systems are characterized by digitalised
information and its ow in the systems, starting at the stage of design and analysis of the
products. => high e ciency
While the circularity potential of a manufacturing system increases on this path of transition, its
functional, operational and organizational complexity also increases. However, this gradual
increase in complexity also highlights that companies having ambitions to go circular can adopt a
stepwise transition strategy instead of a more challenging long jump. Furthermore, the waste and
leakage from the system also reduces along this path of transition
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, If the circular economy is not integrated in the company’s vision and strategy, no signi cant
developments will take place. The discussions about the CE are often restricted to the
sustainability department of a company, and the lack of integration between di erent functions
within the organization and poor collaboration hinders the transition towards circular solutions.
Value chain integration is critical for the successful implementation of circular systems.
Companies operating within a linear business model have neither experience with reverse
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, operations nor infrastructure in place to take back products for value recovery. A closer
connection between suppliers and producers, and between producers and consumers, is needed.
Policy initiatives, regulatory mechanisms and standards that support transition to circular systems
are limited.
Eco-innovation in the transition to a circular economy: An
analytical literature review
Ana de Jesus , Paula Antunes , Rui Santos , Sandro Mendonça
Jesus, et al. (2017)
- Circular economy CE is a concept inspired on natural ecosystems and states moving away
from a notion of a linear economy (based on unidirectional extraction, production, distribution,
consumption and disposal activities) towards a permanently regenerative economy in an e ort to
rethink all of a product's life cycle.
CE proposes models for value creation that support sustainable economic development, through
loops of reuse, restoration and renewability, where waste is residual or converted into an input
into other processes thus shifting the emphasis to the provision of functionality and “service”
rather than ownership and material production
- eco-innovation (EI)= innovation, in all of its forms, yielding both ecological and economic
gains . In other words, the concept has been recognised as a key element in the development
of competitive technologies and institutional forms (including new business models) that allow
“environmental bene ts”, including greater e ciency in consumption and use of resources. =>
resulting in or aiming at signi cant and demonstrable progress towards the goal of sustainable
development, through reducing impacts on the environment, enhancing resilience to
environmental pressures, or achieving a more e cient and responsible use of natural resources.
=> It is considered a way to increase completeness without environmental and societal
negative impacts.
What is technologically feasible is not necessarily ethically desirable or environmentally sound
-
- improved environmental performance (i.e. green innovation);
- market e cient and clean results (i.e. environmental innovation);
- enduring and socially responsible bene ts (i.e. sustainable innovation);
- holistic transformation (i.e. business model innovation for sustainability).
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, EI is operationally summed up as any innovation that:
a) has positive environmental impacts, and;
b) directly or indirectly avoids natural capital dam- age, while delivering cost e ciencies, market
enhancement, or regulation considerations, and;
c) results in new or improved goods and services, technological and non-technological
processes, marketing or organisational schemes;
d) is incremental or radical, and; e) involves an actor or a plurality of actors.
The authors argued for “circular” material ows in the man-made economy. An economic system
organised like nature, operating in loops, would reduce the need for new inputs, and delay the
depletion of the “environment” (as a source of materials and a sink for waste). Resources should
not simply end up as litter after usage, or as products that are simply designed to accommodate
the next wave of supply; they should rather be transformed from one form to another, and
converted back to new resources.
“reduction, reuse and recycle” also share the notion of closed loops, including: the “zero
emission” concept, which refers to systems whereby everything has its use and natural cycles are
emulated); the further development of the “cradle to cradle” model by; and the “zero waste”
concept, whereby waste is diverted from land lls
The de nitions do
highlight a set of core
elements which
characterise the CE
as encompassing:
i) input minimisation
and e cient use of
regenerative
resources (material
and energy e ciency
as well as sourcing
and prioritising the
use of renewable and
non-hazardous
materials);
ii) life cycle extension
and systems
reconceptualization
(repair, re-
conditioning and re-
manufacturing
options;
procurement, new
business models
based for instance on
sharing or re-use;
design - from policy design to life-cycle approach and eco-design);
iii) Output reduction valorisation and waste minimisation (recycling, networks of recovery, and
valuing by-products and waste).
CE is therefore here considered as:
a) an integrative concept for attaining “clean congruence” by guiding new institutional set-ups
that match environmental considerations with socio-economic performance while promoting
techno-economic development that is not depending on the consumption of nite resources;
b) a multi-level framework (micro, meso and macro) that re-shapes and re-directs production and
business models toward resilience and sustainability;
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