Supply Chain Relationships in Circular Business Models: Supplier Tactics at Royal Smit Transformers

Abstract

Background: Despite growing popularity, Circular Economy has not reached its full potential. One of the frequently mentioned success factors is the adoption of a Circular Business Model. However, fueled by (too) many constraints, its implementation is often hampered by so-called vicious cycles. Successful Circular Business Models require intensive collaboration between buyers and suppliers, with one of the key questions remaining who takes the initiative and leads the development: buyer or supplier? Methods: Through a single case study combining desk research, interviews, participative observations and analysis of vicious cycles, we investigate how supply chain relationships managed by the supplier can enhance the implementation of Circular Business Models. Results: We show that supplier tactics can relax constraints and break vicious cycles through (1) buyer–supplier relationship management, (2) functional integration of stakeholders and (3) incentive management. We also show that, due to supplier captive conditions, a number of enabling factors are indispensable, namely: (1) the availability of buyer incentives; (2) (joint experimenting to develop) circular knowledge; (3) sharing clear visions on circularity; (4) being transparent in possibilities; and (5) supply chain leadership. Conclusions: As a consequence, strategic trust-based partnerships are a prerequisite for turning vicious cycles into virtuous cycles. Future research should also investigate the role of the buyer, including buyer captive conditions, and how to shape supply chain leadership. Finally, the role of supplier tactics in relation to other success factors next to Circular Business Models needs to be further explored.

A Multi-Objective Model for Designing a Sustainable Closed-Loop Supply Chain Logistics Network

“…In this paper, the sum of all the energy consumed on all products in all supply chain activities is considered as an energy indicator and is calculated using Equation (10). (10) Now, regarding the above effects and considering the importance weights w 1 , w 2 , and w 3 for the carbon emissions, wastewater, and energy consumption, respectively, the second objective of the proposed model (Z 2 ) is expressed by Equation (11).…”

“…In fact, the main goal of green logistics is to coordinate all activities in an efficient way, so that a balance between economic, environmental, and social dimensions is provided [10]. This also stimulates organizations to care to set environment protection objectives such as reducing pollution, water usage, and waste generation while they still pursue the economic objective of maximizing their profits [11]. This consequently leads to increases in the organization's effectiveness and sustainable production and supply [4].…”

“…This consequently leads to increases in the organization's effectiveness and sustainable production and supply [4]. Combining the economic and environmental problems such as environmentally friendly design, green packaging, green design (environmental design), and sustainable production forms the green production structure [11].…”

Can the Circular Economy Unlock Sustainable Business Growth? Insights from Qualitative Research with Specialists in Romania

“…The circular economy is a current topic; politicians, entrepreneurs, CEOs, representatives of non-governmental organizations, and civil society talk about the potential benefits [29] and recognize the need to move away from the dominant model of the linear economy with its polluting production, neglect of limited resources, and waste problem [30]. The adoption of the circular economy as a collective saving formula resulted from the pressures exerted by the global crisis of resource scarcity, population growth, and climate change, felt across the globe.…”