Buyers Meeting Point procurement by Kelly Barner

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The Point by Buyers Meeting Point

"The Point" is written by BMP Editor Kelly Barner as well as a diverse group of guest contributors.

Book Review: A Circular Economy Handbook for Business and Supply Chains

In reading A Circular Economy Handbook for Business and Supply Chains: Repair, remake, redesign, rethink by Catherine Weetman, I was reminded the importance of people taking completely different approaches to a topic. In the case of the Circular Economy Handbook, I was caught completely off guard by her deep and pervasive focus on the environment, renewable resources, and social value.

CircularEconomyThere will always be a recycling component to any discussion of circular economies because they embrace a move away from ‘linear’ production and resource utilization models where goods have a limited useful life and become waste once they reach the end of it. For example, Weetman’s study of the amount of water required to feed a rapidly growing population (1 litre per calorie), raises the stakes for anyone who is only looking a circular model for cost reasons.

 

Today procurement is primed to seize upon the idea of the circular economy. We’re already buying everything as a service, even though much of it was already a service, just provided under different circumstances or a different title. Why not take the flexibility and efficiency of –aaS and apply that to straight product categories.

In a circular economy, materials are chosen for their availability (influenced most by how renewable they are) and recyclability. Companies buy outcomes rather than products. An example Weetman offers up is the difference between buying a lightbulb and signing a contract with a company who will provide ‘illumination’. It is access rather than ownership – something that agile companies increasingly recognize as key to creating and sustaining a competitive advantage. And with the all-important need to reduce waste (both because of the rising cost of disposal as well as for more altruistic reasons), the circular model provides an opportunity to reduce costs and shrink the footprint of a company’s impact on the environment.

Speaking of environment, Weetman often returns to biological examples and terminology to drive home the importance of the ‘circle of life’ to corporate operational health. There are biological (plant and animal derived) and technical (oil, metals) ‘nutrients’ that feed companies in the circular economy. And then there are ‘novel compounds’ man-made combinations or chemical creations that neither occur naturally nor can be recycled, or in some cases separated, at the end of their natural life.

If you find yourself feeling skeptical that the ROI of the circular economy is worth it, skip straight to page 344 for the business case. While some industries will be affected sooner or more than others – with a heavy emphasis on categories such as fuel and metals – these materials are present somewhere in every supply chain. Better to be prepared too early than too late.

BTW: If you’re interested in more from Catherine Weetman, I also recommend her recent LinkedIn post ‘Making America Great Again’: 3 ways the circular economy can help Trump (and you).'

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Wednesday, 29 March 2017