Circular Economy Tactics For Procurement

For you to understand how to achieve sustainability in business and procurement better, we will tell you these 10R strategies that you can use in any area of your value chain:

1. R0 – Refuse

To achieve this, we need to make a use-and-throw product or make products redundant by abandoning their function or by offering the same function with a radically different product. 

2. R1 – Rethink

This can be achieved by making the use of the products more intensive. When we think about a circularity strategy for refrigerators, we must consider the use and service contract which includes maintenance, repairs, and refurbishing. 

3. R2 – Reduce

For you to Reduce the consumption of natural resources you must increase the efficiency of manufacturing. For example, in my time as a procurement manager, I decreased the use of plastic in plastic rice bags by eliminating the empty ‘air space’ in the bags of rice. 

4. R3 – Reuse

Reusing is the principle of using products more than once. For example, you can buy eco-bags and be able to use them again and again when you go to the market and buy your needs. 

5. R4 – Repair

R4 is the Repair and maintenance of defective products so they can be used with their original function. Thus, it simply means fixing the products instead of throwing them away. An easy example of this would be your clothes. Instead of throwing away your clothes that have a small cut, you can go to a repair shop or do it on your own so that you may be able to wear them. 

6. R5 – Refurbish

R5 is to Refurbish and restore an old product and bring it up to date. Again, an example about refrigerators: the company can replace old parts with modern ones and sell the refurbished devices 

7. R6 – Remanufacture

R6 is to Remanufacture this can be done by using parts of discarded products in a new product with the same function. Continuing with the fridge example, an intermediate uses old parts which still work to repair broken-down or new devices, and unused parts can be sent to a recycling facility.

8. R7 – Repurpose

R7 is to Repurpose discarded products or their parts in a new product with a different function.

9. R8 – Recycle

R8 is to Recycle materials and by-products through innovative ways to obtain value or use them as raw materials. It also means turning products into new products once it has reached their lifecycle. For example, instead of throwing water bottles, you can recycle them as plant pots. 

10. R9 – Recovery

R9 is the Recovery of every resource possible to reduce what is disposed of as waste. In the case of the fridge, an example could be energy recovery from incineration.

Benefits of the Circular Economic Model

1. Environmental Benefits

The circular economy aims to make every product transformed and nothing goes to waste. Thus, it reduces the excessive consumption of finite resources and the generation of waste. 

Additionally, it reduces greenhouse gas emissions as the resources being used are all recycled which can help the world heal. 

2. Economic Benefits

A circular economic model can create new business opportunities, jobs, and cost savings. As you are using recycled materials, you can lower the cost associated with raw materials and generate more profit. 

Also, refurbishing and manufacturing products can create jobs in the service and manufacturing sectors. 

3. Social Benefits

As the circular economic model aims to reduce waste and the usage of new resources, there will be a reduction in waste and pollution that can improve air and water quality. Thus, it improves the health and well-being of the people within a community.

The Challenges the Circular Economy Faces Today

1. Promoting Circular Behavior

Consumers play an important role in the transition toward this economic model. However, it is hard to promote a circular economy to people, especially those who prioritize convenience. 

For example, many stores have eco-bags where they put all the procured products of their customers. However, how willing are their customers to reuse those eco-bags, especially if it has the added inconvenience of bringing them from time to time when they are shopping? 

Thus, the actions of consumers do matter and they also have a part to play in order to achieve a circular economy. 

2. Lack of Infrastructure for Waste Treatment

Not many countries have sufficient waste treatment facilities to ensure that the waste materials can be recycled into something. If there are no sufficient facilities for this, then we can expect that waste will just continue to accumulate in landfill or be dumped into the sea. 

3. Lack of Recycling Capacity

Just like the lack of infrastructure for waste treatment, many countries also lack sufficient facilities to recycle materials. In addition to this, many recycling facilities are already old and there are materials that need higher recycling capacity. 

To achieve a circular economy, we need to ensure that the technologies needed are available to recycle the materials.

4. Existing Business Models are not Compatible With Circularity

Collaboration is the key when it comes to making the existing business models compatible with the circular economy. However, not many businesses are willing to spend more for the transition to this economic model. 

Additionally, a circular product will not always win when it comes to internal decision-makers of a company, especially if it will defeat the success of the same firm’s product.  

5. Government Regulations

Many existing policies and regulations are still geared towards the linear model. For example, expiration date labels are often required by law to protect consumers. 

However, it does not consider differences in how the food is stored. Thus, the date label on a certain food may be labeled for pantry storage but will last longer when refrigerated. 

Circular Procurement: What is it? 

Circular procurement is a term used relating to purchases that support the principles of the circular economic model. It is an approach that aims to limit the waste of resources and reduce the environmental impact. 

Circular procurement has the potential to deliver multiple benefits such as allowing buyers to focus on needs fulfillment and providing a holistic consideration of environmental impacts across the whole lifecycle of goods and services. 

Be a Sustainable Procurement Expert!

Do you want to implement a circular economic model to achieve sustainability in your procurement processes? Then say no more. Our Sustainable Procurement Course will teach you all the ways to effectively and efficiently achieve sustainability in your procurement. Enroll now!