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Genovese, A., Acquaye, A.A., Figueroa, A. et al. (1 more author) (2017) Sustainable
supply chain management and the transition towards a circular economy: Evidence and
some applications. Omega , 66. pp. 344-357. ISSN 0305-0483
https://doi.org/10.1016/j.omega.2015.05.015
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1
Sustainable Supply Chain Management and the transition towards a Circular Economy:
Evidence and some Applications
Andrea Genovese
a,*
, Adolf A. Acquaye
b
, Alejandro Figueroa
a
, S.C. Lenny Koh
a
a
Logistics and Supply Chain Management Research Centre, Management School, University of Sheffield, Sheffield, UK
b
Kent Business School, University of Kent, Canterbury, CT2 7PE, UK
* Corresponding Author (Tel: +44114 222 3347; Email: a.genovese@shef.ac.uk)
Abstract:
In the last decades, green and sustainable supply chain management practices have been
developed, trying to integrate environmental concerns into organisations by reducing unintended
negative consequences on the environment of production and consumption processes. In
parallel to this, the circular economy discourse has been propagated in the industrial ecology
literature and practice. Circular economy pushes the frontiers of environmental sustainability by
emphasising the idea of transforming products in such a way that there are workable
relationships between ecological systems and economic growth. Therefore, circular economy is
not just concerned with the reduction of the use of the environment as a sink for residuals but
rather with the creation of self-sustaining production systems in which materials are used over
and over again.
Through two case studies from different process industries (chemical and food), this paper
compares the performances of traditional and circular production systems across a range of
indicators. Direct, indirect and total lifecycle emissions, waste recovered, virgin resources use, as
well as carbon maps (which provide a holistic visibility of the entire supply chain) are presented.
The paper asserts that an integration of circular economy principles within sustainable supply
chain management can provide clear advantages from an environmental point view. Emerging
supply chain management challenges and market dynamics are also highlighted and discussed.
Key Words: Green Supply Chain Management, Circular Economy, Product Lifecycle Analysis,
Environmental Sustainability, Decision Support
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1. Introduction
Circular economy (McDonough and Braungart 2000) represents a theoretical concept which
aims at creating an industrial system that is restorative by intention (Srivastava, 2007; Seuring and
Müller, 2008); in recent times, business have become more aware about such concept, seeing it
as a mechanism that can be used to create competitive advantage (Ellen Macarthur Foundation
2013). As such, the paper seeks to address the implications of these practices in a supply chain
context from environmental, market, policy and societal points of view.
The recent embracing of new business models that encourage design for re-use and improve
materials recovery represents a departure from historic production and consumption systems. In
fact, classical economic theory posits that disproportionate production and consumption
patterns represent a natural or desirable outcome since they drive the creation of wealth resulting
from economic activity (including the flow and use of raw materials and resources) and trade of
goods and services (Smith and Nicholson 1887). However, it has also been established that
economic and production systems cannot be separated from the environment, with
contemporary ecological economic theory emphasising the increasing impacts of human
activities on the natural environment (Costanza 1984; Harte 1995). This phenomenon has led to
the crossing of certain biophysical thresholds (Rockström et al 2009). As a result, the emphasis
on sustainability, a concept which is now integrated in most disciplines since the publication of
the Brundtland Report by the World Commission on Environment and Development (1987),
has become even more important in the present time.
The increasing influence of sustainability in supply chain management and operations practices
can also be attributed to the fact that, in addition to increased demands of strong economic
performance, organizations are now held responsible for the environmental and social
performance by major stakeholders (Zhu et al. 2005; Walker et al., 2014). As such, sustainability
has forced the redefinition of the operations function (de Burgos Jiménez and Lorente 2001).
Additionally, sustainable supply chain management has become a strategic process enabling firms
to create competitive advantage (Sivaprakasam 2014). This assertion is backed by Porter’s (1991)
hypothesis, which states that the conflict between environmental sustainability and economic
competitiveness is a false dichotomy based on a narrow view of the sources of prosperity and a
static view of competition.
Within this context, in the last decades, sustainable supply chain management theories have been
emerging (inter alia: Walton et al. 1998; Seuring and Müller 2008; Sarkis et al. 2011). These
3
frameworks are underpinned primarily by product lifecycle influences and operational influences
(Sarkis, 2003). Savaskan et al. (2004) suggest that the requirement to take a holistic view of the
whole product supply chain is a fundamental step for establishing greener and more sustainable
production systems (Genovese et al. 2013), based on re-using and re-manufacturing materials
(Zhu et al. 2008). These systems could also lead to the creation of new competitive business
models (Kleindorfer et al. 2005). Such models could be based on the paradigm of cradle-to-cradle,
encouraging the use of raw materials known as technical and biological nutrients, which do not
have a negative impact on the environment, have an entirely beneficial impact upon ecological
systems and return to the ecosystem without treatments (Braungart et al. 2007).
Interestingly, the concepts of green and sustainable supply chain management have been
developed in parallel (although there are some fundamental differences in principles) to the
circular economy discourse, which has been propagated in the industrial ecology literature and
practice for a long time (Lowe 1993; Ehrenfeld 1995). In fact, sustainable supply chain
management seeks to integrate environmental concerns into organisations by minimizing
materials’ flows or by reducing unintended negative consequences of production and
consumption processes (Srivastava, 2007; Srivastava, 2008; Sarkis et al. 2011; Dong et al. 2014).
On the other hand, as described by McDonough et al. (2002), circular economy pushes the
frontiers of environmental sustainability by emphasising the idea of transforming products in
such a way that there are workable relationships between ecological systems and economic
growth (Francas and Minner, 2007). This is achieved by creating a paradigm shift in the redesign
of material flows based on long-term economic growth and innovation (Braungart et al. 2007). It
is implied that circular economy is not just concerned with the reduction of the use of the
environment as a sink for residuals (Andersen 2007) or with the delay of cradle-to-grave material
flows (as sustainable supply chain management suggests) but rather with the creation of
metabolisms that allow for methods of production that are self-sustaining, true to nature and in
which materials are used over and over again (McDonough and Braungart 2000).
Finding ways to align sustainable supply chain strategies to circular economy principles has
therefore become important if the boundaries of environmental sustainability are to be pushed.
Additionally, circular economy is primarily concerned with material flows in economic systems
(Moriguchi 2007; Mathews and Tan 2011) through a paradigm shift in production philosophy;
this therefore leaves other important issues such as understanding environmental impacts (such
as the ones related to energy usage and carbon emissions) and the implications of such impacts
4
unresolved. Consequently, the main research questions which would be addressed in this paper
are:
How can sustainable supply chain management be enhanced by aligning it to the circular
economy concept?
What are the environmental implications of circular production systems in terms of
carbon emissions, resource use and waste recovered when compared to a traditional
linear production paradigm?
What are the potential market dynamics, policy and societal implications that could arise
by the implementation of circular production systems? What kind of challenges do they
pose?
To answer to these questions, based on the theoretical constructs of circular economy, two case
studies (based on product supply chains from different process industries) are analysed. The
findings would be used to provide insight to the analysis and discussions. Chosen case studies are
concerned with food (specifically, the waste cooking oil supply chain) and chemical (ferrous
sulphate supply chain) industries. Greenhouse gas emissions (in the following, simply referred to
as carbon emissions) were selected as the main environmental impact indicator because of their
prominence in contemporary literature and as a result of easy access to data.
Food and chemical supply chains were chosen for this study because (apart from the fact that
they are two very different process industries) both supply chains have been known to have
significant consequences on the environment. Additionally, according to Beamon (2008) limited
research has been carried out on the food processing sector mainly because of the complexity of
the supply chain, hence leaving important issues involving waste, re-use of resources, greenhouse
gas (GHG) emissions unaddressed (French and LaForge 2006). Regarding the chemical industry
supply chain the OECD (2008) reports that despite it being one of the most regulated of all
industries, there is a potential for a negative impact at every stage of its lifecycle. This situation is
exacerbated by the increase use of chemicals in major economic development sectors (UNEP
2012).
To address these issues, the paper is structured as follows: in Section 2, a literature review is
conducted on the principles of circular economy, on frameworks for evaluating the
environmental performance of supply chains and on supply chain configurations. In Section 3,
methodological notes and generalities about the case studies are presented. Section 4 addresses
