Unveiling the potentials of circular economy values in logistics and supply chain management

AuthorEva Faja Ripanti, Benny Tjahjono
DOIhttps://doi.org/10.1108/IJLM-04-2018-0109
Pages723-742
Publication Date12 Aug 2019
Unveiling the potentials of circular
economy values in logistics and
supply chain management
Eva Faja Ripanti
Department of Informatics, Universitas Tanjungpura, Pontianak, Indonesia, and
Benny Tjahjono
Centre for Business in Society, Coventry University, Coventry, UK
Abstract
Purpose The purpose of this paper is to unveil the circular economy (CE) values with an ultimate goal to
provide tenets in a format or structure that can potentially be used for designing a circular, closed-loop supply
chain and reverse logistics.
Design/methodology/approach This is desk-based research whose data were collected from relevant
publication databases and other scientific resources, using a wide range of keywords and phrases associated with
CE, reverse logistics, product recovery and other relevant terms. There are five main steps in the reformulation of
CE principles: literature filtering, literature analysis, thematic analysis, value definition and value mapping.
Findings In total, 15 CE values have been identified according to their fundamental concepts, behaviours,
characteristics and theories. The values are grouped into principles, intrinsic attributes and enablers. These
values can be embedded into the design process of product recovery management, reverse logistics and
closed-loop supply chain.
Research limitations/implications The paper contributes to the redefinition, identification and
implementation of the CE values, as a basis for the transformation from a traditional to a more circular supply
chain. The reformulation of the CE values will potentially affect the way supply chain and logistics systems
considering the imperatives of circularity may be designed in the future.
Originality/value The reformulation principles, intrinsic attributes and enablers of CE in this paper is
considered innovative in terms of improving a better understanding of the notion of CE and how CE can be
applied in the context of modern logistics and supply chain management.
Keywords Sustainability, Literature review, Reverse logistics
Paper type Literature review
1. Introduction
The circular economy (CE) is defined as a global economic model to minimise the consumption of
finite resources, which focuses on the intelligent design of materials, product and systems (EMF,
2013a). It also supports separating treatment between technical and biological materials to
maximise the design for reuse, to return to the biosphere and retain value through innovations
across fields (Webster, 2015; Lacy and Rutqvist, 2015). Transitioning from the linear to a CE not
only requires a fine-tuning that reduces the negative impacts of the linear economy, but also a
whole system approach that builds upon a number of guiding principles. These principles allow
resilience to be built into the CE system, ensuring the long-term generation of economic
opportunities and at the same time offering societal and environmental benefits.
CE principles have been elaborated by several researchers in various manners and from
various viewpoints: Feng (2004) in Yuan et al. (2006), Pintér (2006), Yuan et al. (2006), Yong
(2007), Geng et al. (2012), EMF (2013a, 2015), Stahel (2013) and Pan et al. (2015). Principles, in
theory, can support the understanding of a concept; however, principles alone are often
insufficient to support the practicality of that concept. This paper therefore aims to
reformulate the existing CE principles into CE values (or tenets) in a format or structure that
supports the design of a circular, closed-loop supply chain and reverse logistics. In this
paper, CE principles were reformulated through five steps: data filtering, literature analysis,
thematic analysis, CE values definition and CE values mapping.
The International Journal of
Logistics Management
Vol. 30 No. 3, 2019
pp. 723-742
© Emerald PublishingLimited
0957-4093
DOI 10.1108/IJLM-04-2018-0109
Received 28 April 2018
Revised 21 March 2019
Accepted 9 April 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0957-4093.htm
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CE values in
logistics and
SCM
The paper begins with a brief introduction to some key concepts in CE which also
cover the fundamentals of CE principles. This is followed by a description of the research
approach adopted to collect the data and review existing contributions before presenting the
analysis and synthesis. Finally, the implications for research and practice are discussed
along the direction for future research.
2. Related research
2.1 Circular economy
The idea of CE was coined by Boulding (1966) who expressed it as a cyclical ecological
system which is capable of continuous reproduction of material form even though it cannot
escape having inputs of energy. Kneese et al. (1970) in Andersen (2007) mentioned CE from
an environmental economic perspective based on a mass balance principle that all material
flows can be accounted for; however, it will be the economic values, not the physical flows
that guide their management.
Pearce and Turner (1990) divided CE into four functions: amenity values, a resource base
for the economy, a sink for residual flows and a life support system. Hu et al. (2011)
expressed the basic philosophy in the CE approach as being to enhance the emergence of an
industrial and economic system that relies on cooperation among actors and matter and
energy flow management, in which they can use each others waste material and energy as
resources and in this way minimise the systems virgin material and energy input. EMF
(2013) defined CE as an industrial system that supports a restorative concept through the
intelligent design of materials, products and systems and the business model. Preston (2012)
interpreted it as redesigning global production and consumption systems, which are a
combination of environmental, resources, technology and consumer demand. The concept
encourages business activities to optimise products, components and materials at the
highest utility and value at all times, distinguishing between technical and biological cycles.
The EMF (2013) divided CE into two types of circle: technical materials and biological
materials circles, both of which have similar reverse processes. The circle of technical materials
consists of maintaining, reusing/distributing, refurbishing/remanufacturing and recycling. In
the circle of biological materials, specific treatments, such as extraction of biochemical feedstock
and anaerobic digestion/composting, are required before the biological materials can be safely
released to the biosphere. In both circles, leakage must be minimised so as to maximise the
amount of materials to be reprocessed hence re-circulated back to the point of use.
2.2 Circular economy principles
Aprincipleis generally intended as a fundamental truth that serves as the foundation of a
system. The CE principles can therefore be seen as the fundamental truth about the CE,
representing the whole concept of CE, and by understanding the principles, it should
provide a better understanding of the CE itself. CE principles have been identified by
numerous researchers in different contexts. Huamao and Fengqi (2007) and Yuan et al.
(2006) summarised the CE principles in 3R, which stands for reduction, reuse and
recycling of materials/energy. Hu et al. (2011) expressed the basic philosophy of CE as
enhancing the emergence of an industrial and economic system, relying on cooperation
among actors and matter and using waste material and energy as resources to minimise the
systems virgin material and energy input. Stahel (2013) emphasised the importance of CE
principles in the implementation of the CE concept. He mentioned CE principles as including
economics and profit maximisation; material and resource sufficiency and efficiency; an
intelligent use of human labour; and caring. Additionally, he expressed the rules of CE
principles as: profitable and resource efficient; value maintained; circular flow; cost efficient:
reuse, repair and remanufacture; and needs functioning markets.
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