We take resources from the earth. We make things out of them for use. And then, we throw away whatever is left. The cost is borne out not only in landfills, but also through emissions, as our consumption fuels the climate degradation.
Shifting a “linear economy” toward circularity requires major changes to business and operating models, supply chains, and B2B and B2C consumer behavior. Yet circular solutions can contribute to a better future. We discuss this “circular economy” in Supp. 5 (see p. 197).
The World Economic Forum recently brought together four industry leaders whose ideas on what it takes to go circular are summarized below:
First exec: For mature companies, the mindset shift means making investments in areas where there may not be imminent business value or impact. For those at the beginning of this journey, it can start with small steps towards replacing existing materials (such as packaging) with more sustainable and economically viable alternatives. These small steps can have huge short-term impacts and set the path toward more systemic changes in the future.
Second exec: Start by developing a clear picture of global end-to-end impact, including supply, production and use of material flows. Embed a circularity mindset and principles across all parts of the company, starting with business strategy, innovation process, capital allocation, HR management and rewards, brand positioning, marketing, etc. Sustainability commitments then become an integral part of a company’s purpose and culture.
Third exec: It is important to look at your pillars and targets day by day. Success isn’t measured overnight, and each milestone resets with a new target. Staying committed to the course is what ultimately changes behaviors and mindsets and garners results. Five key pillars underpin the strategy: (1) understanding organizational resource flows to reduce waste; (2) implementing internal systems to maximize the value of resources: (3) supporting supply chain to progress towards circularity; (4) engaging with customers to help them make circular choices; and (5) supporting innovation to accelerate the global transition to a circular economy.
Fourth exec: The transformation spans decades, so there is a “before” the transformation, but not yet an “after”. To start the transformation, it will help to define circular objectives for the company overall as well as for all areas of the company, so all areas of the company can contribute. Attention has to be paid to sustainability and circular economy. Messaging has to be consistent and repeated by line management.
Classroom discussion questions:
- How has a company you are familiar with moved towards circularity?
- Summarize the key points of the executives quoted.
By: Barry Render
Title: OM in the News: What It Takes to Go to a Circular Economy
Sourced From: heizerrenderom.wpcomstaging.com/2021/10/24/om-in-the-news-what-it-takes-to-go-to-a-circular-economy/?utm_source=rss&utm_medium=rss&utm_campaign=om-in-the-news-what-it-takes-to-go-to-a-circular-economy
Published Date: Sun, 24 Oct 2021 01:01:32 +0000
Did you miss our previous article...