Building an extended

value chain through a

“circular business model”
Presenter: Supervised by:
Shalini Bartwal Dr. Sudhanshu Joshi
Operations and supply chain
Research Scholar management (OSCM)
Doon University, Dehradun
 3
(source: McKinsey,2022; WEF,2022; Forbes,2022; TechRadar,2022; computer weekly,2022))
(Source: Ellen MacArthur Foundation, 2011) 4
 A brief overview of Circular
Economy
• CE model is a transition from a traditional open linear system to a closed circular
system
• Ellen MacArthur Foundation (2015) has defined a circular economy as a system that is
“restorative and regenerative by design”
• The UN Economic and Social Council (2021) defines the circular economy as “a tool
which presents solutions to some of the world’s most pressing crosscutting sustainable
development challenges”.
• The purpose of CE is to enhance resource efficiency, and environmental performance,
generate efficient gains, provide potential solutions for sustainable production and
consumption and channel the resources under the closed-loop.
• The circular economy basically works on three different elements- narrowing resource
flows, slowing resource loops, and closing resource loops (UNIDO, 2020)

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(source: UNIDO,2020) 6
 The 10R’s to Circular Economy
C For consumers to buy less. Also for producers who can refuse to use specific materials or
R1- Refuse
E designs.
Smarter
product use and R2- Rethink Making product use more intensive (i.e. through sharing products or by putting multi-
manufacture functional products on market)

R3- Reduce Increasing efficiency in product manufacture or use by deploying fewer natural resources

Second consumer of a product that hardly needs any adaptation and works as good as
R4- Reuse new.

Bringing back into working order, by replacing items after minor defects. This can be
R5- Repair done peer-to-peer or people in the vicinity
Extending
product life Referring to large multi-component product remains intact while components are
cycle and its R6- Refurbish replaced, resulting in an overall upgrade of the product.
parts
The full structure of a multi-component product is disassembled, checked, cleaned and
R7- Remanufacture when necessary replaced or repaired in an industrial process.

Popular in industrial design and artistic communities. By reusing discarded goods or

R8- Repurpose components adapted for another function, the material gets a new life.

Useful
R9- Recycle Processing of material to obtain the same (high grade) and lower (low grade) quality
application of
materials Capturing energy embodied in waste, linking it to incineration in combination with
LE R10- Recover producing energy.
7
(source: Kirchherr et al.,2017; Potting et al.,2017; Campbell et al.,2020; Morseletto,2020)
 Circularity in business
Industry type company About the company Circular source
practices

E-platform Globechain a B2B marketplace for reuse across multiple industries, like construction, hotels, offices, medical, Upcycling Board of
restaurants, and retail that no longer need assets (like furniture, equipment, or office supplies) list them (coordination) Innovation,2020
on the platform, where they’re requested and collected by other companies.

E-platform Building as a platform for identifying the value and material markup of buildings throughout the building cycle, Upcycling Board of
material Banks from planning and construction through occupancy, repairs, renovations, repurposing, and (coordination) Innovation,2020
(BAMB) decommissioning.

Footwear Adidas FUTURECRAFT.LOOP is Adidas‘ first running shoe that is “made to be remade.” The high- Circular product Board of
industry performance running shoe was carefully designed with manufacturing and recycling partners so that “it design Innovation,2020
can be returned to Adidas, broken down and reused to create new performance running shoes.”

Electronic Philips Philips enables hospitals to upgrade their medical equipment (like MRIs and CT scanners) by trading-in refurbishment Board of
industry their old equipment for a discount on new systems. Philips refurbishes and upgrades older equipment Innovation,2020
and sells it again. This business model helps hospitals get financial returns on their older equipment
while efficiently upgrading to the latest technology. It also enables Philips to reach different customer
segments with affordable, high-quality systems.

Automobile Renault To meet the Paris Climate change agreement, industry needs to consider its use of materials as well as remanufacturing Ellen MacArthur
industry energy. Groupe Renault’s Choisy-le-Roi factory, provides a great example of how a more circular Foundation,2022;
management of materials can both reduce emissions associated with vehicle manufacturing, and create Renaultgroup.com
profits and value to customers.

Retail industry Tesco Tesco’s 4R strategy is in alignment with a shift to a circular economy for plastics, which begins by 4R’s: remove, Ellen MacArthur
rethinking the packaging, the product and the business model, so that unnecessary plastic can be reduce, reuse and Foundation,2022
eliminated, while user experience is maintained or enhanced.  recycle
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McKinsey’s analysis
highlighted that a
shift in demand will
drive value pools
away from the
traditional take-
make-waste model
towards circular
alternatives delivered
through a range of
channel strategies.

(source: McKinsey,2022)
Summary

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References
Board of Innovation. (2020). 10 circular business model examples. https://www.boardofinnovation.com/blog/circular-business-model-examples/

Campbell-Johnston, K., Vermeulen, W. J., Reike, D., & Brullot, S. (2020). The circular economy and cascading: towards a framework. Resources, Conservation & Recycling: X, 7, 100038.

ComputerWeekly.com. (2022). IT sustainability think tank: Tightening up a circular supply chain. https://www.computerweekly.com/opinion/IT-Sustainability-Think-Tank-Tightening-up-a-

circular-supply-chain

Ellen MacArthur Foundation. (2015). Towards a circular economy: Business rationale for an accelerated transition. How to build a circular economy | Ellen MacArthur Foundation. 
https://ellenmacarthurfoundation.org/towards-a-circular-economy-business-rationale-for-an-accelerated-transition

Ellen MacArthur Foundation. (2022). Eliminating unnecessary plastic packaging: Tesco. How to build a circular economy | Ellen MacArthur Foundation.https
://ellenmacarthurfoundation.org/circular-examples/tesco

Ellen MacArthur Foundation. (2022). Europe’s first circular economy factory for vehicles: Renault. How to build a circular economy | Ellen MacArthur Foundation. 
https://ellenmacarthurfoundation.org/circular-examples/groupe-renault 

Forbes. (2022). https://www.forbes.com/sites/sap/2022/06/29/why-the-circular-economy-is-the-perfect-fit-for-the-fashion-industry/?sh=3e2f6e4853d0

Kirchherr, J., Reike, D., & Hekkert, M. (2017). Conceptualizing the circular economy: An analysis of 114 definitions. Resources, conservation and recycling, 127, 221-232.

McKinsey & Company. (2022). Playing offense on circularity can net European consumer goods companies €500 billion.
https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/playing-offense-on-circularity-can-net-european-consumer-goods-companies-500-billion-euros

Mentink, B. A. S. (2014). Circular business model innovation: a process framework and a tool for business model innovation in a circular economy.

Morseletto, P. (2020). Targets for a circular economy. Resources, Conservation and Recycling, 153, 104553.

Potting, J., Hekkert, M. P., Worrell, E., & Hanemaaijer, A. (2017). Circular economy: measuring innovation in the product chain. Planbureau voor de Leefomgeving, (2544).

TechRadar.com, E. (2022). Addressing the need for circularity in retail supply chains. TechRadar India. 
https://www.techradar.com/in/opinion/addressing-the-need-for-circularity-in-retail-supply-chains

UN Economic and Social Council. (2021). Aligning the circular economy and sustainable development. ISPI. 
https://www.ispionline.it/en/pubblicazione/aligning-circular-economy-and-sustainable-development-27778

United Nations Industrial Development Organization. (2020). Circular economy. UNIDO | United Nations Industrial Development Organization. 
https://www.unido.org/our-focus-cross-cutting-services/circular-economy

World Economic Forum. (2022). How a circular economy could help tackle Sri Lanka's economic crisis. 
https://www.weforum.org/agenda/2022/07/circular-economy-tackle-economic-crisis-sri-lanka/

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Thank you!