Full Terms & Conditions of access and use can be found at http://www.tandfonline.com/action/journalInformation?journalCode=tprs20 International Journal of Production Research ISSN: 0020-7543 (Print) 1366-588X (Online) Journal homepage: http://www.tandfonline.com/loi/tprs20 A systematic review on drivers, barriers, and practices towards circular economy: a supply chain perspective Kannan Govindan & Mia Hasanagic To cite this article: Kannan Govindan & Mia Hasanagic (2018) A systematic review on drivers, barriers, and practices towards circular economy: a supply chain perspective, International Journal of Production Research, 56:1-2, 278-311, DOI: 10.1080/00207543.2017.1402141 To link to this article: https://doi.org/10.1080/00207543.2017.1402141 Published online: 03 Jan 2018. Submit your article to this journal Article views: 1176 View Crossmark data
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Full Terms & Conditions of access and use can be found athttp://www.tandfonline.com/action/journalInformation?journalCode=tprs20
A systematic review on drivers, barriers, andpractices towards circular economy: a supply chainperspective
Kannan Govindan & Mia Hasanagic
To cite this article: Kannan Govindan & Mia Hasanagic (2018) A systematic review on drivers,barriers, and practices towards circular economy: a supply chain perspective, International Journalof Production Research, 56:1-2, 278-311, DOI: 10.1080/00207543.2017.1402141
To link to this article: https://doi.org/10.1080/00207543.2017.1402141
A systematic review on drivers, barriers, and practices towards circular economy: a supplychain perspective
Kannan Govindan* and Mia Hasanagic
Center for Sustainable Supply Chain Engineering, Department of Technology and Innovation, University of Southern Denmark,Odense, Denmark
(Received 21 August 2017; accepted 27 October 2017)
In the last few years, the circular economy has received considerable attention worldwide because it offers an opportu-nity to optimise and promote sustainable production and consumption through new models based on continuous growthand limitless resources. Although various advantages have been identified that emerge from the application of a circulareconomy, no concrete studies exist that investigate current state-of-the-art drivers, barriers and practices in this relevantfield. An in-depth exploration of current practices would enhance the circular economy’s significance and would helpunderstand its present level of implementation. With this concern, this study provides an analysis of the drivers, barriersand practices that influence the implementation of the circular economy in the context of supply chains through a sys-tematic review. In order to analyse the circular economy’s level of implementation, we correlate stakeholders’ perspec-tives with drivers, barriers, and practices; thus, a multi-perspective framework is proposed. From the results, it is evidentthat among various stakeholders, the governmental perspective has the maximum positive impact on the implementationof the circular economy in supply chains. Specifically, the circular economy can be promoted through laws, policies, riskreduction (through tax levies) and strict governance.
Experts anticipate the global population will reach around 9 billion by 2050 and 10.1 billion by 2100 (Bastein 2013).Due to the population growth, there will be an increase in the demand for natural resources, which includes rawmaterials, water, energy and fertile land. The increased demand for these resources places pressure on the environment(Franklin-Johnson, Figge, and Canning 2016). The middle class is also growing, which means consumption behavioursincrease and the demand for more luxury products rises. Moreover, during the twenty-first century, materials consump-tion worldwide will increase eightfold; by the end of 2050, global demands for resources are expected to triple whichrequires a much higher utilisation of natural resources (Kok, Wurpel, and Ten Wolde 2013; Reh 2013).
Furthermore, urbanisation results in the migration of more people to the cities, which adds additional pressure onthe environment. These developments elevate the usage of raw materials for residential construction such as roads,bridges, dams, sewages and the need for transport (Bastein et al. 2013). The way resources are currently managed mustbe improved to locate opportunities for greater wealth for individuals while retaining environmentally friendly practices(Shi et al. 2017). This transition is already ongoing, and one of its central views is the concept of a circular economy(Bastein et al. 2013). In 1989, Pearce and Turner presented the concept of a circular economic system based on earlierstudies from Boulding, an ecological economist, in 1966 (Ghisellini, Cialani, and Ulgiati 2016). Boulding’s idea of theeconomy as a circular system was seen as a precondition for the sustainability of human life on earth. Further, with thesupport of Boulding’s idea, Pearce and Turner explained their theoretical framework, which highlights the transitionfrom linear economy to circular economy (Ghisellini, Cialani, and Ulgiati 2016).
However, the linear economy model has dominated the industrial evolution for the last 150 years (MacArthur 2015).The conventional linear economy model is based on products that are manufactured from raw materials, sold and depos-ited as waste after use (Jawahir and Bradley 2016); generally, that model is defined as take-make-use-destroy (Ghisellini,Cialani, and Ulgiati 2016). Moreover, this model does not consider other factors such as the impact on societal capitals,including human resources, and on the conservation of scarce resources (Kok, Wurpel, and Ten Wolde 2013).
The circular economy model, on the other hand, considers factors that can reduce waste and monitor more closely theconsumption of resources. The circular economy decreases the need of new, raw materials by reusing existing materials,and this practice can be accomplished by rethinking how the product functions in a closed loop (Kok, Wurpel, and TenWolde 2013). Because of the momentous advantages of the circular economy system over conventional economy, manystudies are evident in the literature in recent years. These studies examine different perspectives of the circular economywithin a wide range of applications. For instance, studies exist on manufacturing (Lieder and Rashid 2016), construction(Smol et al. 2015), supply chain (Zhu, Geng, and Lai 2010), service (Tukker 2015) and so on. The circular economyhas positive impacts on many applications, including supply chains, which requires a paradigm shift when moving froma conventional to a sustainable supply chain. Hence, it is mandatory to explore the implementation concepts of the cir-cular economy within the supply chain perspective where other studies are limited. To uncover the present status ofimplementation, many researchers have reviewed the circular economy concepts in general. For instance, Su et al.(2013) reviewed the Chinese circular economy concepts, practices and assessment tools. Geng et al. (2009) reviewedthe progress and scope of implementation of the circular economy in Chinese regional levels. Ghisellini, Cialani, andUlgiati (2016) reviewed the transitions involved with interlinking environmental and economic systems. These generalfindings and recommendations might not have the same impact on all applications. Hence, it is necessary to review thecircular economy perspective, particularly as it applies to a theory like supply chain management. Many studies haveargued that the effectiveness of supply chain management directly influences the organisational performance regardlessof the application. With this concern, circular economy integration becomes one of the vital strategies in supply chaininnovation. Some studies have reviewed the circular economy with a supply chain perspective. For instance, Pan et al.(2015) reviewed the circular economy implementation strategies in supply chain management, but this study did notaddress the key components (drivers, barriers and practices) of circular economy implementation.
With this consideration, this paper aims to identify the main drivers, practices and barriers to implement circulareconomy with the focus of supply chain management through a systematic literature review. Organisations have identi-fied the key drivers for influencing, key barriers for eradication and key practices for implementing the circular economyin supply chain management. The paper is divided into five sections and is structured as follows. Section 2 justifies theneed for the content analysis presented in this paper and positions its results to contemporary scientific research. Previ-ous reviews of scientific literature on circular economy are summarised. Section 3 contains the background that focuseson the theoretical aspect of circular economy. In Section 4, the methodological design of this study is presented. In Sec-tion 5, the classification of drivers, barriers and practices is examined and collected in tables towards a multi-perspectiveframework. Research findings are discussed in Section 6 and suggestions for future work are presented in Section 6.Finally, the conclusion of this study is presented in Section 7. The research study is also shown in a framework inFigure 1.
2. Previous literature reviews
In this section, the need for content analysis and framework development will be justified by summarising formerreviews of scientific literature on circular economy. Most literature has been published within the last two years due togrowing interest in the subject area. This section analyses current research to identify more clearly the topics of concernthat require further exploration. In addition, this section helps to define state-of-the-art practices in the circular economyand the need to explore them further. Lastly, this section deals with the necessary shift from a linear economy to a circu-lar economy.
The earliest related literature reviews focus on the developing circular economy (CE) policy within China. These lit-eratures examine its relationship to China’s information technology (Sarkis and Zhu 2008) and its socioeconomic con-text (Naustdalslid 2014). Other reviews address environmental degradation associated with rapid economic developmentand eco-industrial initiatives taken in China; using a common graphical representation, these topics are compared withinitiatives taken in the West and elsewhere in East Asia (Geng et al. 2008; Sarkis and Zhu 2008; Mathews 2011; Suet al. 2013). Reviews published after 2014 on the circular economy are given in a Table 1; this overview provides thetitle, author, and a short summary.
In contrast to this study, none of the other literatures has examined the different drivers, barriers and practicestowards circular economy with a supply chain perspective. Most articles focus on the circular economy in generaland feature a biological context. While these published reviews paved the way for circular economy research, theydo not investigate the drivers, barriers and practices towards circular economy, so the focus of this research remainsnovel.
International Journal of Production Research 279
Figure 1. Research study.
Table 1. Summary of previous literature.
Title Author Year Summary
Biological processes for advancing lignocellulosic wastebiorefinery by advocating circular economy
Liguori, R.,Faraco, V.
2016 Reviewed bio treatment concepts such as biorefineries and waste management that promotethe implementation of the circular economy
Towards circular economy implementation: Acomprehensive review in context of manufacturingindustry
Lieder, M.,Rashid, A.
2016 Reviewed the status of the circular economy inmanufacturing context, including wastemanagement, usage of scarce resources and eco-efficient activities
A review on circular economy: The expected transitionto a balanced interplay of environmental andeconomic systems
Ghisellini, P.,Cialani, C.,Ulgiati, S.
2016 Reviewed the circular economy features overthe last two decades. This study examines theimplementation of the circular economy atdifferent levels of an organisation’s structure,including micro, meso and macro, and itidentifies its merits and demerits
Designing the business models for circular economy –towards the conceptual framework
Lewandowski,M.
2016 Reviewed existing circular economy businessmodels to determine gaps that remain in theliterature. Further, this study proposed a newframework for better implementation of CE
Product services for a resource-efficient and circulareconomy – A review
Tukker, A. 2015 Reviewed the existing literature that deals withthe circular economy employing a focus ofresource efficiency in the application of productservices systems
280 K. Govindan and M. Hasanagic
3. Theoretical background
The circular economy has been defined in a variety of ways from different researchers. Two of the most acclaimed defi-nitions are ‘the central of circular economy is the circular (closed) flow of materials and the use of raw materials andenergy through multiple phases’ (Franklin-Johnson, Figge, and Canning 2016) and ‘an economy based on a “spiral-loopsystem” that minimises matter, energy-flow and environmental deterioration without restricting economic growth orsocial and technical progress’ (Geng et al. 2008).
The circular economy has recently received major consideration among researchers because it fosters both environ-mental protection and social well-being (Jawahir and Bradley 2016). The shift from a linear economy to a circular econ-omy is needed before increased demands for natural resources place pressure on the environment. One of the targetgoals of the circular economy is to reduce the use of natural resources, reduce waste amounts, decrease greenhouse gasemissions and usage of hazardous substances and to move to renewable and sustainable energy suppliers, thereby reduc-ing pressure on the suppliers (Bastein et al. 2013). One strength of the circular economy is that it can decouple eco-nomic growth using a new business model based on services instead of natural resources (Eijk 2015). The circulareconomy can decrease value destruction in the overall system and correspondingly increase value creation in each linkof the system (Bastein et al. 2013). Moreover, a circular economy will decrease waste through recycling and reuse ofproducts which will create both environmental and economic benefits, increase the lifetime of products and have theopportunity to create more jobs if the circular economy is implemented (Ilić and Nikolić 2016). According to a recentreport, a decrease in resource consumption will lead to 1.4–2.8 million new job opportunities in the European Union by2020 (MacArthur 2012). In addition, the Ellen MacArthur Foundation states that a circular economy could have a posi-tive impact on reducing carbon dioxide emissions by 2030 (MacArthur 2015).
HP Instant Link services offers a practical example of innovative success. They provide printing service to individu-als and small business around the world. The model uses connected printers to send customers replacement cartridges,along with pre-paid envelopes for returning used cartridges, before the customer runs out of ink. The model successfullydemonstrates a component recovery and recycling programme in the consumer electronics sector, as it enables HP toput their cartridges through multiple uses (MacArthur 2017a). Through this business model, packaging use is reducedand up to 57% of waste is eliminated. A second practical example comes from Renault, a company that remanufacturesengine parts, creates a ‘second life’ for electric batteries and increases the ‘short-loop’ recycling of raw materials in thesector. Currently, 36% of the total mass of a newly produced Renault vehicle in Europe comes from recycled materials,and 85% of an ELV is recyclable (MacArthur 2017b).
Initially, the ‘3R’ principles of materials and energy – reduction, reuse and recycling – propose the three dominantmethods in practice for circular economy (Yuan, Bi, and Moriguichi 2006). In recent years, however, due to anincreased awareness of sustainable innovation, 6R approaches are relevant in the circular economy. 6R adds on the con-cepts of recover (Kim and Goyal 2011; Govindan, Jha, and Garg 2016), redesign (Lu, Tsai, and Chen 2012; Ying andLi-jun 2012) and remanufacture (Dowlatshahi 2005; Wu et al. 2016; Diaz and Marsillac 2017), and 6R practices havealready shown better results all over the world. For example, the International Iron and Steel Institute report demon-strates that lifecycle costs and energy requirements for reuse are significantly lower than those for recycling (NederlandCirculair 2015). In addition, the report finds that whereas recycling reduces costs by 10% and energy use by 50%, reusereduces costs by approximately 40% and energy approximately by 80%. Moreover, recycling products garner their high-est value and reduce the level of risk associated with price volatility, resource scarcity, energy demand and environmen-tal impact (Gerner et al. 2005). The EU report reveals that total waste production in 2010 was 2520 million tonnes,which is quite progressive when compared to other parts of the world. From this number, around 36% is recycled; theremainder is sent to landfills or burned (European Commission). The above discussion shows the importance of thecircular economy.
The Ellen MacArthur Foundation depicts the concerns of the circular economy in Figure 2. The main idea of thiscircular model is to take full advantage of reusability of products and raw materials to minimise waste. There are differ-ent fundamental characteristics to describe the circular economy such as that waste is ‘designed out’. The EllenMacArthur Foundation asserts that the circular economy strategy is more complete if the circles in the figure are tighter;the products should be in the loop for as long as possible and reclaim as high a value as possible (Bastein et al. 2013;MacArthur 2015).
Figure 2 shows that the model distinguishes between two loops: the biotic (green loop) and the technical nutrients(blue loop). These two loops find their way into the circular economy in two different ways (MacArthur 2015).
Technical materials are recovered and mostly restored in the technical cycle. The technical nutrients contain productsand materials such as metals and plastics. These should be reused and stay in the closed loop to minimise the use ofnon-renewable resources and to prevent potential pollution.
International Journal of Production Research 281
The bio-nutrients go through the cascades to safely return to the biosphere (MacArthur 2015). The concept of cas-cading – the process that returns bio-nutrient materials safely to the biosphere – has been identified as a cornerstone ofthe bio-economy and the circular economy strategies (Bezama 2016). Cascading is often mentioned as a measurementof the current material stocks associated with each product in a system; it is used to estimate the potential type andamount of materials that are available for the recycling infrastructures at any given time. The second aspect related tocascading is the quality of the materials streams; it provides a qualitative assessment of the material streams after thelifecycle of the product so their technical and economic utilisation alternatives can be better understood (Bezama 2016).This is an important factor if the loops have to be closed or improved as it is possible to define the highest value-addedalternatives for the available resources. The third dimension of cascading that is important for the implementation of acircular economy is the consideration of the lifetime associated with a particular product. This enables evaluation of thepotential impacts associated with the product and provides a way to evaluate the system’s overall behaviour. This isimportant to evaluate alternatives to implement the circular economy and bio economy strategies (Bezama 2016).
Whereas, the circular economy has been widely regarded as an important topic, on 16 December 2014 the EuropeanCommission issued a statement that re-evaluated the concepts of circular economy; they sought to evaluate the advan-tages and disadvantages associated with the circular economy (Bartl 2015). The purpose for the re-evaluation was clear:with higher recycling rates, it is anticipated that more materials will go back into the production process and, corre-spondingly, the demand for virgin materials will decrease. Because Europe imports many raw materials, their depen-dence on imports would become less critical and will increase European policy (Bartl 2015). In 2015, Andreas Bartlstates that although the recycling of materials reduces resource consumption, it does not offer the single best solutionfor increasing both quality and efficiency. Hence, there is a need to consider environmental impacts during recyclingand to follow the European waste management policies regarding waste prevention and exports (Bartl 2015). The grow-ing awareness on the circular economy forces researchers to consider its role in various fields of application; supplychain management currently serves as one of the key debate topics. Many controversies exist with the green supplychain management and the circular economy. Both strategies are closely related to one another, but no clear agenda forthe circular economy yet exists within the perspective of the supply chain. From the overview, it is evident that a
Figure 2. Ellen MacArthur Foundation (2015).
282 K. Govindan and M. Hasanagic
number of initiatives are associated with the circular economy worldwide. On the other hand, many practitioners are stillunaware of the concepts and implementation of the circular economy, so it is important that more research is emergingon the topic. In order to contribute to the relevant literature, this study seeks to review the drivers, barriers and practicesof circular economy implementation with a particular focus on supply chain management. The methodology used andits respective outcomes will be discussed in upcoming sections.
The research question that has defined in this study is: What are the drivers, practices, and barriers towards the circular econ-omy in a supply chain?
4. Methodology
Few instructional texts are available that address philosophical approaches to social science research and methods forempirical investigation (Denyer and Tranfield 2009). While literature reviews play a critical role in journal publications,their potential to create knowledge and to affect policies and practices is even greater.
This study adopted a systematic review, a method of collecting available literature in a systematic way (Quarshie,Salmi, and Leuschner 2016; Jaegler et al. 2017). According to Denyer and Tranfield (2009), a systematic review is amethodology that may help researchers analyse the exact status of their field of concern and reach clear conclusions.However, the focus in this paper is to identify the drivers, practices and barriers regarding implementation of the circulareconomy in a supply chain perspective. This research method shows how the data will be collected, analysed andreported through this paper. The first step was to establish the right criteria for the study: to select the right papers. Thesecond step was to search for other potential papers. The third step was to evaluate the papers and then determine if thearticles were appropriate for the topic and were in scope. The fourth step was to analyse the assembled papers notingthe works’ year of publication, methodology used, geographic context and industry settings. The research process is pre-sented below in Figure 3.
4.1 Search criteria
In a systematic review, the first step is to identify which studies should be considered and which should be declined. Inaddition, from the beginning of the study, the review must provide a clear scope of the areas to be investigated. Hence,pre-specified criteria were proposed to select the studies to be included in this review.
A transparent approach was used, and in order to secure the validity of the data, specific databases and certain yearswere selected. The criteria for this research study are as follows:
(1) This review includes only formal literature (excluding books, research reports and so on), and it considers publi-cations, abstracts and citations. According to Falagas et al. (2008), Tukker (2015) and Pinho and Mendes(2017), Scopus is a respected bibliographic database that strongly assists researchers with existing literatures,especially with works published after 1995. For these reasons, a structured keyword search was conducted in
Figure 3. Methodology overview.
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Scopus (www.scopus.com). Furthermore, the database Web of Science (www.webofscience.com) was also usedin the research to improve the reliability of the collected data.
(2) The selected papers should be English-speaking peer-reviewed papers on the circular economy.(3) The paper should be published in the period from 2000 to 2016, to be sure that the newest data is used in this
research.(4) The criteria in the databases Scopus and Web of Science were that the papers should be reviewed, articles in
press or editorial material. The keyword ‘circular economy’ was searched for Article title, abstract and keywordsin the papers, which is named as ‘topic’ in that specific database.
4.2 Article search
The search resulted in 173 articles from both databases. All the articles that met the criteria for potentially relevantworks were collected. There were 107 articles from the Scopus database and 66 from Web of Science. The 107 articlesfrom Scopus were 48 papers reviewed, 43 articles in press and 16 from editorial material. Furthermore, the 66 articlesfrom the database Web of Science were 43 reviewed papers and 23 papers from editorial material.
In order to eliminate search errors, a manual search was deployed to avoid word search limitations, which couldoverlook relevant articles. Furthermore, as this topic focused on circular economy in supply chains, some keywords usedin supply chains were searched. The search terms ‘circular economy in supply chain’ produced a maximum of fivepapers.
Therefore, in the search’s second stage, a keyword search was performed in order to ensure all the relevant studieswere included. In circular economy, the following keywords were used: ‘drivers’, ‘practices’, ‘barriers’ and ‘closed loop’to be jointly found in title, keywords or abstract. Keywords such as ‘remanufacturing’, ‘reduce’, ‘reuse’ and ‘recycling’were also accepted during the publication gathering process, searching in titles, abstracts, keywords and subject terms.An additional 22 articles were added. Most of them had been scanned before and found that they did not appear to meetthe criteria.
4.3 Evaluation of articles and inclusion
After the second stage, 215 papers were collected. All articles were evaluated to ensure that the paper considered clearlyfit the scope of the topic. Any article that did not deal with the topic area or that played a minor role was excluded.However, articles in which the topic emerged as a significant sub-theme were included. After this stage, 155 articleswere eliminated and a final sample of 60 articles were considered.
4.4 Article content analysis
In this section, the final sample of 60 articles will be examined considering the year of publication, methodology used,geographical context and industry settings.
4.4.1 Distribution of papers by year of publication
The distribution of all 60 papers is presented in Figure 3. The figure shows that the first year of publication was 2006.The number of publications was found to rise significantly from 2015 to 2016. This increase in publications shows agrowing interest in the circular economy as related to topics such as drivers, barriers and practices in supply chains.
Figure 4 depicts that scholarly interest in the circular economy began to appear around 2006, and the number ofpublications generally correlate to the first intervention of circular economy concepts in China. China was seriouslyaffected by their growing population and the decrease in natural resources that accompanied their economic crisis.Hence, during this time, China introduced a new strategy, circular economy, to overcome these national challenges. Thefirst law on the circular economy was proposed by the Chinese Government in 2009, ‘Circular Economy PromotionLaw of the People’s Republic of China’. After the approval of this law, many researchers shifted their focus towards thecircular economy with a variety of perspectives. Recently, the European Union emphasised the concept of the circulareconomy and proved that implementing a circular economy decreases the material cost and increases profits. With thisconcern, this study seeks to promote the circular economy through a comprehensive review of its literatures.
The 60 papers selected for this study have been analysed regarding the methodology, industry settings and the geo-graphic context from each paper, and the results are presented in Table 2. The numbers given reflect the percentage ofthe total data-set. In the next sections below, the different parts will be described.
4.4.2.1 Research methodology. Most of the studies published in circular economy include literature reviews, reports,case studies and conceptual frameworks. Note that the majority of works focused on China rather than on other geo-graphical contexts. Hence, China is clearly more dedicated towards circular economy implementation in response totheir growing population, the rapid depletion of nonrenewable resources and the nation’s social problems (Ghisellini,Cialani, and Ulgiati 2016).
The most common research methods used in this study are theoretical and conceptual frameworks and case studies.Furthermore, from Figure 5 below, it is clear that the number of case studies increases from 2015 to 2016, whereas thenumber of literature reviews decreases.
Figure 4. Distribution of papers by year of publication.
Table 2. Methodology, industry setting and geographic context cited in the research database of 60 papers.
Entire data-set 60 (in %)
Research methodologyCase study 33Literature review 13Models 3Survey 7Theoretical and conceptual papers 44Industry settingsNot specified 70Mobile phones 3Electronic 3Chemical and food 3Iron and steel 3Water and energy 2Leather 2Other 14Geographic contextNone 40Asia 32Europe 23Oceania 2Worldwide 3
International Journal of Production Research 285
4.4.2.2 Industry settings. The scope of papers identified in Table 1 demonstrates that different industries are exploredamong the research used in this study. One industry mentioned, in two of the papers, is the mobile phone industry. Salesof mobile phones have consistently increased over the last years, which results in a higher waste of mobile phones.Mobile phones are also an interesting topic due to their important role in consumption and environmental impact; theyhave a high rate of sales and a short lifetime (Franklin-Johnson, Figge, and Canning 2016).
A second industry commonly mentioned in the papers is the steel industry. The steel industry has an important placein the Chinese economy (Ma et al. 2013), and the output of these Chinese steel sectors continues to increase from thecombined impact of urbanisation, growth and heavy industrial developments.
Food and chemical supplies are also mentioned in some of the papers used in this study. The food processing sectorhas limited resources mainly due to the complexity in reusing resources and due to greenhouse gas emissions. Withinthe chemical industry, there is the potential for a negative impact on the environment at every stage of its life cycle, andthe industry is presumed to increase over the next years (Genovese et al. 2015).
Leather is also used as a case study in one of the papers regarding the circular economy. Leather is widely used interms of import/export throughout the world. Leather industries contribute significantly towards the global economy,reaching an annual value of approximately 100 billion US dollars (Pringle, Barwood, and Rahimifard 2016). This busi-ness is expected to grow further as the population rises due to a larger consumer market for leather products. The disad-vantage of the global leather market is the waste that is generated during every stage in the life cycle of leather goodsproduction (Pringle, Barwood, and Rahimifard 2016). Furthermore, there is only a small percentage of options torecover the waste generated; those options include the extraction of organic material for fertilisation and the incinerationof waste for energy recovery. A large proportion of the total leather waste is still sent to landfills with no materials orenergy recovered (Pringle, Barwood, and Rahimifard 2016).
4.4.2.3 Geographic context. The geographic context identifies in which country the methodology part is carried out.Three different parts of the world – Oceania, Europe and Asia – are cited, and the regions have been split up in thisway because many authors use the more general designation of EU rather than naming the specific different countries.In the table, ‘Worldwide’ refers to papers in which countries all over the world have been studied. Furthermore, ‘None’refers to those papers in which no specific country has been cited.
Figure 6 depicts the geographical context during the years of publication, and it shows that China has publishedpapers about circular economy in every year in this research. Moreover, Europe has increased their publications since2015. Again, the ‘None’ field identifies papers that did not have a specific country in their research.
From this content analysis, three main interesting findings emerge. The first demonstrates clearly that interest in thecircular economy in supply chains is steadily rising. Secondly, the increasing number of case studies implies that the cir-cular economy is being enacted in various industries, so scholarship is moving beyond literature reviews. Thirdly, thiscontent analysis shows that countries in Asia were the first to publish research about the circular economy, but Europeancountries have increased their interest significantly.
A content analysis can be defined as (Krippendorff 2004):
A research technique for making replicable and valid inferences from texts (or other meaningful matter) to the contexts of theiruse. (Krippendorff 2004)
Content analysis involves specialised procedures which are expected to be reliable, replicable and valid. Content analy-sis helps researchers to understand the reliability of the results under various circumstances and periods. According toNeuendorf (2002), content analysis is ‘to identify and record relatively objective (or at least intersubjective) characteris-tics of messages’. However, it is better to involve multiple researchers into the content analysis to ensure the validityand reliability of the results rather than involving various judgements from a single researcher (Seuring and Gold 2012).
Kassarjian (1977) specifies that content analysis should follow a clear process structure. The process structure of theresearch paper has been presented in Figure 3 and explained in Section 4. Afterwards the paper has been analysedregarding drivers, practices and barriers in the circular economy. The specific drivers, barriers and practices have beendivided into internal and external levels, and they are related to one or more stakeholders. The stakeholders used in thisresearch are defined from the stakeholder theory (Bonnafous-Boucher and Rendtorff 2016). The drivers, barriers andpractices have been split into internal environments and external environments, because the most effective circular econ-omy implementation depends on policies that correspond to both external and internal levels of application. At internallevels, producers are encouraged to implement circular economy practices in their production strategies right from theinitial design. On the other hand, at the external level, the sustainable relationship has to be built between the industriesand industrial parks in order to promote cleaner production (Su et al. 2013).
The main purpose of the analysis of the drivers, barriers and practices presented in the tables is to develop a concep-tual framework that can outline the results in a transparent way. This multi perspective framework shows how thedrives, barriers and practices relate to each other. The multi perspective framework is presented in Figure 10.
5.1 Circular economy drivers
To identify and understand the motivational factor to implement the circular economy in a supply chain, the drivers willbe first examined. These drivers are shown in Table 3. Thirteen motivational drivers to implement the circular economyin a supply chain are emphasised. These drivers have been classified into categories based on their similarities andmeaning. The drivers are classified into internal and external environments, and each is related to one or more stake-holders. The internal level identifies what has to be done inside the enterprise; the external level describes what has tobe done outside the enterprise so it can be adopted into the supply chain.
The selected drivers were then classified into five clusters. These clusters appeared inductively from the paper collec-tion, based on functional aspects of circular economy, as well as inspired by previous classification schemes found in lit-erature. The clusters are:
• Policy and economy: this cluster includes drivers such as laws concerning product take back and economygrowth.
• Health: this cluster refers to increasing animal and public health.
Governments in differentcountries have made laws topromote cleaner production,consumption, and end oflife management in order tosecure resources, health andsafety. However, thesepolicies act as mandatorydrivers for many developingcontext organisations
External Organisation,Supplier
EU, Serbia,China
Ilić and Nikolić (2016),Xinan and Yanfu (2011),Park, Sarkis, and Wu(2010), Hazen, Mollenkopf,and Wang (2017), Quina,Soares, and Quinta-Ferreira(2017)
D2. Economic growth byimplementing CE in SC
Implementing circulareconomy in supply chaincould increase the long-termrevenue generation througheffective recycling andremanufacturing activities
heavy prices foroverconsumption ofresources and energy
Public health is largely‘taken for granted’ and isno longer a major driver.‘Health is not everything,but without healtheverything is nothing’. Lotsof people suffer fromillnesses caused by dirty airand water.
External Society Serbia, leatherindustry
Ilić and Nikolić (2016),Pringle, Barwood, andRahimifard (2016)
D4. Animal health paysheavy prices foroverconsumption ofresources and energy
The animals have to live ina healthy environment
External Society Food Quina, Soares, and Quinta-Ferreira (2017)
(3) Environmental protectionD5. Due to Climate
change /Global upwarming it is importantthat CE is implementedin SC
Climate changes occur dueto the amount of wasteproduced and thegreenhouse gas emissionsassociated with theconsumption used. Uniquelandscapes may be lost.Furthermore, climatechanges result in bad airand water quality
External Government Serbia, leatherindustry, ChinaMarket, General
Ilić and Nikolić (2016),Pringle, Barwood, andRahimifard (2016), Hazen,Mollenkopf, and Wang(2017), Clark et al. (2016),Quina, Soares, and Quinta-Ferreira (2017)
D6. Modern agriculturerapidly improvesproductivity, but it paysa heavy price foroverconsumption ofresources and energy
Modern agriculture quicklyincreases productivity but itpays a heavy price for over-consumption of resourcesand energy
External Society China Market Jun and Xiang (2011),Xuan, Baotong, and Hua(2011)
D7. Demand forrenewable energy isincreasing and thereforeit is important toprotect the environment
Demand for renewableenergy is increasing.Renewable resources shouldbe protected
External Government General Clark et al. (2016), Schiller,Müller, and Ortlepp (2017)
(Continued)
288 K. Govindan and M. Hasanagic
• Environmental protection: this cluster includes climate change, quality of agriculture and the protection of renew-able resources.
• Society: this cluster includes population growth, urbanisation, job creation potential and consumer awareness.• Product development: this cluster refers to improving the efficiency of materials and energy use and to increasingthe value of products.
From the 13 drivers, 9 drivers were related to the external environment and 4 correspond to the internal environ-ment. Internal drivers are those that exist within the firm itself and are related to resources in the organisation that pro-mote the implementation of circular economy, whereas the external drivers involve motivational factors outside thecompany that promote the implementation of the circular economy.
The drivers were also classified according to the stakeholders involved. Stakeholders used in this research are con-sumers, society, the organisation, suppliers and the government, all of which are secured from the stakeholder theory.The stakeholder classification is as follows: consumers are related to 1, government concerns are related to 4, the organ-isation is related to 1, society is related to 3 and the combination of organisation and suppliers is related to 4.
This research also analysed the popularity of circular economy drivers in the supply chain according to the numberof times the driver appeared in the article portfolio. Three drivers tied for the top ranking of popularity: the potential toget more jobs by implementing circular economy, climate change and the ability to follow laws and policies. The nextmost common motivational factor is population growth and opportunities in economic growth, which appeared 3 timesin the studied papers. ‘A graph showing the drivers’ frequency of inclusion is presented in Figure 7’.
growth of populationthe implementation ofCE is important
Increasing populationworldwide results inincreased consumption,which poses severe demandon basic resources in nearfuture. This urge drives theimplementation of circulareconomy in supply chain
External Government General Yuan, Bi, and Moriguichi(2006), Ilić and Nikolić(2016), Pringle, Barwood,and Rahimifard (2016)
D9. Urbanisation isincreasing and theenvironment has beennegatively affected bythis increase
More people are movinginto big cities
External Government China Market Sun et al. (2017)
D10. Job creationpotential in supplychain
Circular economy willcontribute to higher localemployment, especially inentry-level and semi-skilledjobs
Internal Organisation,Supplier
General Morone and Navia (2016),Esposito, Tse, and Soufani(2017), Ilić and Nikolić(2016), Li et al. (2010),Schiller, Müller, andOrtlepp (2017)
D11. Consumers’environmentalawareness placespressure on industriesto develop CE in SC
Consumers are starting toget knowledge aboutindustries’ impact onenvironment
External Consumer Serbia, General Ilić and Nikolić (2016)
(5) Product developmentD12. Improve the
efficiency of materialsand energy use insupply chain
To use circular economy asa strategy, it will improvethe efficiency of materialsand energy use
Internal Organisation,Supplier
China Su et al. (2013)
D13. Increase the value ofproducts by increasingthe quality
Products developed in thisway will have a longerlifetime and willautomatically increase theirvalue
Internal Organisation Serbia Ilić and Nikolić (2016)
International Journal of Production Research 289
5.2 Circular economy practices
To describe and explain how the circular economy should be adopted into a supply chain via different enterprises, 34practices are depicted in Table 4. These practices have been classified into categories based on their similarities andmeaning and by guidelines from different literatures.
Each practice identified is related to one or more stakeholders and corresponds to the internal or external environ-ment. The same stakeholders were used as pertains to the drivers: consumers, society, suppliers, the organisation and thegovernment. Consumers are related to 2 of the practices, the government is related to 12, the organisation is related to1, society is related to 5 and the combination of organisation and suppliers is related to 17 of the practices.
Selected practices are then classified into eight clusters. These clusters appeared inductively from the collection ofpapers, based on functional aspects of circular economy, as well as inspired by previous classification schemes found inliterature. The clusters are:
• Governance initiatives: this cluster includes practices such as laws and policy, pilot projects, performance indica-tors, the need of marketing about remanufactured products and increasing employment rates in the circular econ-omy.
• Economic initiatives: this cluster states that economic growth must be decoupled from environmental impacts, andthat economic initiatives should increase environmental accounting, monitor external taxation, set the right priceand reduce risk for enterprises by developing financial instruments.
• Cleaner production: this cluster includes increasing eco-efficiency in production, cleaner purchases, cooperationwith other companies and the implementation of new paths of logistics systems.
5 5
3
2 2 2
1 1 1
5
3
1 1
0
1
2
3
4
5
6N
umbe
rs o
f ar
tice
ls
DriversExternal
Internal
Figure 7. Frequency of drivers.
290 K. Govindan and M. Hasanagic
Table
4.Practices.
Practices
Descriptio
nInternal/
External
stakeholder
Indu
stry/M
arket
Sou
rces
(1)Governa
nceinitiative
P1.
EstablishLaw
sandPolicies
towards
CEin
SC
Cou
ntries
allarou
ndtheworld
have
toim
plem
entlawsto
secure
that
thecircular
econ
omywill
beim
plem
ented.
Thishasto
beim
plem
entedas
manycompanies
are
only
profi
tdriven
External
Gov
ernm
ent
China
Market,EU,
water
indu
stry,steel
indu
stry,automotive
indu
stry
Xue
etal.(201
0),Genov
eseet
al.(201
5),
Sauvé,Bernard,andSloan
(201
5),Maet
al.
(201
3),Genget
al.(200
8),Soo
,Com
pston,
andDoo
lan(201
6),Zhu
,Geng,
andLai
(201
0),Li,Zhang
,andLiang
(201
3),
Maitre-Ekern
andDalhammar
(201
6),Liand
Yu(200
9),Yuan,
Bi,andMoriguichi(200
6),
Suet
al.(201
3)P2.
Pilo
tprojectsforCEin
SC
Implem
entin
gpilotprojectsso
theseprojects
canbe
role
mod
elsfortheothers
External
Gov
ernm
ent
China
Market
Suet
al.(201
3),ZhijunandNailin
g(200
7),
Ghisellini,Cialani,andUlgiati(201
6)P3.
Perform
ance
indicators
onrecycling,
reuseand
remanufacture
inSC
Measuring
theenterprises’
implem
entatio
nof
circular
econ
omyandho
wthey
are
doing,
soitcanbe
done
better.Itshou
ldbe
able
toevaluate
how
muchtheprod
ucts
affect
theenvironm
entanditmustbe
know
nto
theconsum
er
Internal
Organisation,
Sup
plier
China
Market,mob
ileph
ones
Suet
al.(201
3),Genget
al.(201
2),
Frank
lin-Joh
nson
,Figge,andCanning
(201
6),Reuter(201
6),Pan
etal.(201
5)
P4.
Marketin
gof
remanufacturedprod
uctsin
SC
Gov
ernm
enthasto
secure
moremarketin
gby
television
abou
tremanufacturing
prod
uctsandgreenpu
blic
procurem
ent
External
Gov
ernm
ent
General
Ghisellini,Cialani,andUlgiati(201
6)
P5.
Increase
employ
mentrates
inSC
towards
CE
Giveincentives
toincrease
employ
ment
ratesin
acircular
econ
omy
Internal
Organisation,
Sup
plier
General
LiederandRashid(201
6)
(2)Econo
mic
initiatives
P6.
Decou
pleecon
omyin
SC
with
environm
entalim
pacts
Decou
pleecon
omic
grow
thfrom
environm
entalim
pactsso
theenterprisescan
surviveby
implem
entin
gcircular
econ
omy
Internal
Organisation,
Sup
plier
General,China,
Serbia
Ghisellini,Cialani,andUlgiati(201
6),Ilić
andNikolić
(201
6),Suet
al.(201
3),Lieder
andRashid(201
6),Sauvé,Bernard,and
Sloan
(201
5)P7.
Increase
environm
ental
accoun
tingin
SCfor
enterprises
Increase
environm
entalaccoun
tingon
both
natio
nalandcorporatelevels.Use
pollu
tion
impacts
External
Organisation,
Sup
plier
General
Xinan
andYanfu
(2011)
P8.
Externaltaxes
The
external
taxapproach
securesthat
marginalcostsof
external
effectswill
bereflectedin
marketprices,so
marketplayers
will
incorporatethesein
theircommon
transactions
External
Gov
ernm
ent
General
And
ersen(200
7)
Externaltaxatio
nprov
ides
motivationto
developnew,cleanertechno
logies,which
canreduce
impactscost-effectiv
ely
P9.
Taxbenefits
Taxbenefitsforthefirm
implem
entin
gcircular
econ
omyby
thego
vernmentcan
increase
thewillingn
esstowards
thefirm
’sshareholders
tobecomemoreinvo
lved
incleanerprod
uctio
n.In
additio
n,ifcircular
External
Gov
ernm
ent
General
LiederandRashid(201
6)
(Con
tinued)
International Journal of Production Research 291
Table
4.(Con
tinued).
Practices
Descriptio
nInternal/
External
stakeholder
Indu
stry/M
arket
Sou
rces
prod
uctsqu
alifyfortaxbenefits,then
custom
ersmay
bemotivated
tobu
ythe
circular
prod
uctsin
low
cost
P10
.Taxationon
non-renewable
energy
tomakeitattractiv
eforsupp
liers
tobu
yrenewable
prod
ucts
Taxationbasedon
non-renewable
energy
rather
than
onlabo
uror
renewable
energies.
Createbu
siness
oppo
rtun
ities
and
employ
ment
External
Gov
ernm
ent
General
Ghisellini,Cialani,andUlgiati(201
6)
P11.Settin
gtherigh
tpriceof
theprod
uctin
regardsof
how
muchitcoststo
reuse/
remanufacture/recycle
inSC
Con
sumersaremorelik
elyto
avoid
switching
ifthey
noticetheprices
oftheir
currentprod
uctsor
serviceprov
idersare
high
er.Ifprices
fornew
prod
uctsincrease,
consum
erswill
seek
alternativesolutio
nsto
meettheirneeds
Internal
Organisation,
Sup
plier
General
Hazen,Mollenk
opf,andWang(201
7)
P12
.Econo
myinitiatives
toredu
cetherisk
forenterprises
astherearehigh
up-front
investmentcostsin
SC
Financial
inno
vatio
ncanassistthecircular
econ
omythroug
hbearingtheinitial
investmenttowards
itsim
plem
entatio
n.How
ever,thisfinancialinno
vatio
nhelpsthe
firm
tochange
theirfinancialexpenses
from
thelin
earmod
elto
thecircular
approach
External
Gov
ernm
ent
Con
structionindu
stry
Smol
etal.(201
5),Pan
etal.(201
5)
(3)Clean
erprod
uctio
nP13
.Increase
eco-efficiency
inprod
uctio
nIntegratingmore6R
practices
canresultin
increasedeco-efficiency
inprod
uctio
nInternal
Organisation,
Sup
plier
General,steel,pu
lpandpaper,China
Market,water
desalin
ation,
mob
ileph
ones
JawahirandBradley
(201
6),Ghisellini,
Cialani,andUlgiati(201
6),Liederand
Rashid(201
6),YingandLi-jun(201
2),Zhu
,Geng,
andLai
(201
0),Suet
al.(201
3),
ZhijunandNailin
g(200
7),Landabu
ru-
Agu
irre
etal.(201
6),Frank
lin-Joh
nson
,Figge,andCanning
(201
6),Sup
inoet
al.
(201
6),Reuter(201
6),Reh
(201
3)P14
.Cleaner
purchasesfrom
purchasing
Enterpriseshou
ldpu
rchase
morecleanand
green,
insteadof
only
taking
thepriceinto
accoun
t
Internal
Organisation,
Sup
plier
China
Market
Suet
al.(201
3),Ghisellini,Cialani,and
Ulgiati(201
6),LiederandRashid(201
6),
YingandLi-jun(201
2)P15
.New
strategies
inSC
Various
strategies
depend
ingup
onthelevels
ofapplicationareneeded
inorderto
implem
entcircular
econ
omy
Internal
Organisation,
Sup
plier
General
Ghisellini,Cialani,andUlgiati(201
6),
Xinan
andYanfu
(2011)
P16
.Coo
perate
with
other
companies
tomakeit
possible
toreuse/recycle/
remanufacture
Collabo
ratio
nandcoop
erationwith
other
indu
stries
andindu
strial
parkscanim
prov
etheeffectivenessof
circular
econ
omy
implem
entatio
nthroug
hsharingecon
omy
Internal
Organisation,
Sup
plier
General
Ghisellini,Cialani,andUlgiati(201
6)
P17
.Introd
ucingreclassificatio
nin
prod
uctio
nToachievecircular
econ
omy,
thematerials
areclassified
astechnicalandnu
trient
whereas
thetechnicalareforced
toreuse/
recycle/remanufacture
whereas
thenu
trients
aresafely
return
tothebiosph
ereor
ina
cascadeof
consecutiveuses
Internal
Organisation,
Sup
plier
General
Ghisellini,Cialani,andUlgiati(201
6),
Bezam
a(201
6)
(Con
tinued)
292 K. Govindan and M. Hasanagic
Table
4.(Con
tinued).
Practices
Descriptio
nInternal/
External
stakeholder
Indu
stry/M
arket
Sou
rces
P18
.Im
plem
entnew
pathways
oflogisticssystem
sIm
plem
entnew
pathwaysof
logistics
system
sInternal
Organisation,
Sup
plier
Cem
ent
Sup
inoet
al.(201
6)
P19
.Technicalequipm
entand
facilitiesto
remanufacturing
Technicalequipm
entisrequ
ired
todevelop
productsin
differentwaysifthey
areto
beremanufactured
Internal
Organisation,
Sup
plier
China
Market
Zhu
,Geng,
andLai
(201
0)
P20
.Stand
ards
for
refurbishm
entqu
ality
Thisleadsto
agreatvarietyin
prod
uct
quality
andrecogn
ition
amon
gauthorities,
companies
andconsum
ers
External
Gov
ernm
ent
General,mob
ileph
ones
Weelden,Mug
ge,andBakker(201
6)
P21
.Measurabledata
tomeasure
theenvironm
ent
performance
inregardsof
the
initiatives
byim
plem
entin
gCEin
SC
There
shou
ldbe
measurabledata
sothe
enterprisescanaccoun
tandpredict
environm
entalperformance
intherigh
tway
Internal
Organisation,
Sup
plier
General
Reuter(201
6)
(4)Produ
ctdevelopm
ent
P22
.App
reciable
design
and
durabledesign
tomakeit
possible
toim
plem
entin
SC
Designof
durableprod
uctsformultip
lecycles
ofuseas
wellas
incentives
for
companies
tofavo
urtake-backof
prod
ucts.
Produ
ctsshou
ldbe
design
edfordisassem
bly
andreuse
Internal
Organisation,
Sup
plier
China
Market,
General,steel
indu
stry
inChina,
automotiveindu
stries,
water
desalin
ation
Ness(200
8),Ghisellini,Cialani,andUlgiati
(201
6),LiederandRashid(201
6),Suet
al.
(201
3),Sauvé,Bernard,andSloan
(201
5),
Maet
al.(201
3),Soo
,Com
pston,
and
Doo
lan(201
6),JawahirandBradley
(201
6),
Liu
(201
6),ZhijunandNailin
g(200
7),Zhu
,Geng,
andLai
(201
0),Landabu
ru-A
guirre
etal.(201
6),Lihon
g(2011),Amatoet
al.
(201
6),Sihvo
nenandPartanen(201
6),Smol
etal.( 201
5)(5)Man
agem
entsupp
ort
P23
.Sup
portfrom
top
managem
enttowards
introd
ucingCEin
SC
Sup
portfrom
topmanagem
entisan
essentiallin
kto
enhancingthesepractices
Internal
Organisation,
Sup
plier
General
Sihvo
nenandPartanen(201
6)
(6)Infrastructure
P24
.Easierregion
aleco-
indu
stry
networkto
makeit
possible
torecycle
Produ
ctspasspo
rt,networkof
indu
strial
symbiosisinitiatives
orsustainablesourcing
standardshave
tobe
moreefficientifthe
enterprisesadop
tcircular
econ
omy
External
Gov
ernm
ent
China
Market,
General
Suet
al.(201
3),LiederandRashid(201
6)
P25
.Redesigninfrastructure
system
deliv
eryservices
Redesigninfrastructure
system
deliv
ery
services,so
itwill
beeasier
toservice
prod
ucts
External
Gov
ernm
ent
China
Market
Suet
al.(201
3),Ghisellini,Cialani,and
Ulgiati(201
6),Sauvé,Bernard,andSloan
(201
5),SpringandAraujo(201
7),Tuk
ker
(201
5),Velis(201
5)P26
.A
sustainable
infrastructure
tomakeit
easier
toim
plem
entCEfor
enterprises
Not
only
processbu
talso
theworkp
lace
has
ahigh
impact
ontheim
plem
entatio
nof
circular
econ
omy.
How
ever,such
infrastructure
supp
ortsthewho
leindu
stry
with
sustainableperspectivethroug
hits
optim
ised
usageof
resources,managing
health
andsafety
External
Gov
ernm
ent
China
Market
Ness(200
8),Suet
al.(201
3),Zhijunand
Nailin
g(200
7),Wen
andMeng(201
5)
(Con
tinued)
International Journal of Production Research 293
Table4.
(Con
tinued).
Practices
Descriptio
nInternal/
External
stakeholder
Indu
stry/M
arket
Sou
rces
P27
.Efficientinform
ation
system
totrackmaterialsin
recycling
Precise
andeasily
availableinform
ation
system
shelp
decision
-makersandmanagers
toreactqu
icklyandreliablyto
meettheir
eco-efficientstandardsthroug
hcircular
econ
omy
External
Gov
ernm
ent
China
Suet
al.(201
3)
(7)Kno
wledg
eP28
.Moreaw
arenesson
circular
econ
omyto
makeit
attractiv
eforsupp
liers
and
endconsum
ersto
buy
remanufacturedprod
ucts
Morepu
blic
awarenesson
circular
econ
omy.
Manyareno
taw
areof
circular
econ
omy.
Con
sumers’
know
ledg
eon
refurbishm
ent
prod
uctsisno
tfar-reaching
today.
Many
thinkthat
new
prod
uctsarebetterthan
refurbishedprod
ucts.Provide
inform
ation
abou
tenvironm
entalbenefitsgained
byusingrefurbishedprod
ucts
External
Society
China
Market
Suet
al.(201
3),ZhijunandNailin
g(200
7),
JawahirandBradley
(201
6),Liederand
Rashid(201
6),Ghisellini,Cialani,and
Ulgiati(201
6),Sauvé,Bernard,andSloan
(201
5),Liu
etal.(200
9),Genget
al.(200
8),
Ilić
andNikolić
(201
6),Weelden,Mug
ge,
andBakker(201
6)Reuter(201
6),Pan
etal.
(201
5)P29
.Edu
catio
non
recycling,
remanufacturing
andreuse
Sustainable
educationserves
asatool
toeducateandincrease
awarenessam
ongthe
actors
invo
lved
insupp
lychain.
Itassists
top-levelmanagersto
know
abou
tthelong
-term
impo
rtance
ofim
plem
entin
gcleaner
prod
uctio
n.In
additio
n,thispracticecan
bringchange
inthesocial
thinking
towards
thecircular
econ
omy
Internal
Organisation,
Sup
plier
China
Market,
General
Suet
al.(201
3),JawahirandBradley
(201
6),LiederandRashid(201
6),Xinan
andYanfu
(2011),Sihvo
nenandPartanen
(201
6)
P30
.Trainingin
regardsof
CE
insupp
lychain
Not
only
university
educationisim
portant,
butalso
virtualeducationisessentialto
educateandpreparetheworkforce
forthe
new
shiftin
themanufacturing
indu
stry
towards
thecircular
econ
omy
Internal
Organisation,
Sup
plier
China
Market,
General
Suet
al.(201
3),JawahirandBradley
(201
6),LiederandRashid(201
6),Ilić
and
Nikolić
(201
6)
P31
.Visionary
Think
ing
Toim
plem
entcircular
econ
omyin
supp
lychain,
thefirm
shou
ldhave
vision
ary
thinking
andthesameshou
ldbe
integrated
with
thefirm
sov
erallmotto.How
ever,this
kind
ofthinking
invo
lves
technical
creativ
ity,on
-site
thinking
andso
on
Internal
Organisation,
Sup
plier
General
JawahirandBradley
(201
6)
(8)So
cial
andCulture
P32
.Chang
eattitud
ethroug
hwho
lesocietyof
recycling,
reuseandremanufacturing
Chang
eattitud
esthroug
hout
who
lesociety
onremanufacturedprod
ucts
External
Society
China
Market
Suet
al.(201
3),Hazen,Mollenk
opf,and
Wang(201
7)
P33
.Con
sumersshiftfrom
the
linearmod
elto
CE
Con
sumersshiftfrom
thepresentbu
siness-
as-usual
mod
elto
circular
econ
omy
Internal
Con
sumer
China
Market
ZhijunandNailin
g(200
7),Ness(200
8),
Ghisellini,Cialani,andUlgiati(201
6)P34
.Moresimplified
lifestyle
byendconsum
ers
Sim
plified
lifestyle,so
notas
manycomplex
prod
uctshave
tobe
prod
uced
Internal
Con
sumer
General
Ghisellini,Cialani,andUlgiati(201
6)
294 K. Govindan and M. Hasanagic
• Product development: this cluster refers to the importance of durable design.• Management support: this cluster includes the necessary support from top management to adopt the circular econ-omy.
• Infrastructure: this cluster refers to the regional network, infrastructure system and the need for an efficient infor-mation system.
• Knowledge: this cluster includes the importance of the public being aware of the circular economy, encouragingeducation about the circular economy, offering training and exploring the requirement for visionary thinking.
• Social and culture: this cluster refers to changing the whole society’s attitude regarding remanufactured products,shifting consumers’ views from the traditional line model to the circular economy model and creating a more sim-plified lifestyle.
Among the 34 practices, 15 practices relate to the external environment and 19 to the internal environment.This research also analysed the popularity of circular economy practices in a supply chain according to the number
of times that practice appeared in the portfolio of articles. The main practice is to design a product in such a way that itcan be remanufactured again; with 16 occurrences, this objective is by far the leading practice. The next most commonpractice is to make sufficient laws and policies so that enterprises are willing to adopt the circular economy in their sup-ply chains; this practice appeared 13 times in the papers. The next practices that are popular include awareness on thecircular economy and the importance of increasing eco-efficiency in production. Both of these appeared 12 times in thestudies. An overview of the popularity of the practices is presented in Figure 8 below.
5.3 Circular economy barriers
Many authors have considered and discussed the barriers that correspond to the implementation of the circular economy.Like drivers and practices, barriers that appear can be situated internally to the enterprise or outside in the external envi-ronment.
The barriers are classified similarly to the drivers and practices by their placement in either internal or externalenvironments, and by how one or more stakeholders are related to the barriers. These barriers are shown in Table 5.
13 12
6 53 2 2 2 1 1 1 1 1 1 1
16
12
5 5 5 4 4 3 2 2 1 1 1 1 1 1 1 1 10
2
4
6
8
10
12
14
16
18
Num
ber o
f art
icel
s
Practices External
Internal
Figure 8. Frequency of practices.
International Journal of Production Research 295
Table
5.Barriers.
Barriers
Descriptio
nInternal/
External
Stakeho
lder
Indu
stry/
Market
Sou
rces
(1)Governm
entalissues
B1.
Lackof
astandard
system
for
performance
indicators
with
regard
tomeasuring
CEin
SC
Lackof
astandard
system
forperformance
assessment
Internal
Organisation,
Sup
plier
China
market
Suet
al.(201
3),LiandYu(200
9)
B2.
Recyclin
gpo
liciesin
waste
managem
entareineffectiveto
obtain
high
quality
recycling
Recyclin
gpo
liciesareineffectiveto
obtain
high
quality
recycling
External
Gov
ernm
ent
Netherlands
deMan
andFriege(201
6)
B3.
Unclear
vision
inregardsof
CEin
SC
Regulatorybarriers
encompass
theun
clear
natio
nalvision
such
asgo
als,ob
jectives,targets
andindicators
External
Gov
ernm
ent
General
Pan
etal.(201
5)
B4.
Circularecon
omylawshave
been
insufficiently
implem
ented
The
lawson
circular
econ
omyareno
tstrong
,andthereisno
existin
gtool
toanalysethe
effectivenessof
theprop
osed
rulesandlaws.
Mostlawsarepo
sedwith
person
alop
inionrather
than
technicalexpertise
External
Gov
ernm
ent
China
LiandYu(200
9),Suet
al.(201
3),Zhijunand
Nailin
g(200
7)
B5.
Existinglawsin
waste
managem
entareno
tsupp
ortin
gCE
Existingenvironm
entallawsin
somesystem
sdo
notfitcircular
econ
omyconcepts
External
Gov
ernm
ent
China
LiandYu(200
9)
(2)Econo
mic
issues
B6.
Weakecon
omic
incentives
makeitdifficultforenterprises
toim
plem
entCEin
SC
Weakecon
omic
incentives
shou
ldsupp
ort
enterprisesto
shiftfrom
linearecon
omyto
the
circular
econ
omy
External
Gov
ernm
ent
China
Market
Suet
al.(201
3),Sauvé,Bernard,andSloan
(201
5),Genget
al.(200
8)
B7.
Insufficientinternalisationof
external
costs
Env
iron
mentcosts(externalities)
areno
ttaken
into
accoun
tExternal
Gov
ernm
ent
EU,
Netherland
LiederandRashid(201
6)
B8.
Difficulties
inestablishing
correctpriceof
prod
uctsin
SC
Get
theprices
righ
t.Itisdifficultto
ascertainthe
correctcostof
resources
Internal
Organisation,
Sup
plier
Netherlands
LiederandRashid(201
6)
B9.
Major
upfron
tinvestmentcosts
inSCby
implem
entin
gCE
Implem
entin
gcircular
econ
omyin
supp
lychain
results
inredesign
ingtheshop
floo
rand
productio
nunitincludingtrainedstaff,
constructio
n,techno
logy
andso
on.Thisinitial
processseem
satoug
hjobforSMEsandmicro
indu
stries
Internal
Organisation,
Sup
plier
General
Pan
etal.(201
5)
B10
.There
arebo
thhigh
short-
term
costsandlow
short-term
econ
omic
benefitsin
SC
Highshort-term
costsandlow
short-term
econ
omic
benefitsareprob
lemsforthe
enterprises
Internal
Organisation,
Sup
plier
General
Shahb
aziet
al.(201
6)
B11.Highcostsarerelatedto
recycled
materialsin
SCand
thereforethey
areoftenmore
expensivethan
virgin
inthe
market
Generally,virgin
prod
uctsarecheaperthan
recycled
ones,so
consum
ersareoftenmore
focusedon
pricerather
than
ontheprod
uct’s
entirelifecycle
Internal
Organisation,
Sup
plier
EU
LiederandRashid(201
6)
(Con
tinued)
296 K. Govindan and M. Hasanagic
Table5.
(Con
tinued).
Barriers
Descriptio
nInternal/
External
Stakeho
lder
Indu
stry/
Market
Sou
rces
B12
.Highpu
rchasing
costof
environm
entally
friend
lymaterialsby
thesupp
lier
Highpu
rchasing
costof
environm
entally
friend
lymaterialsandpackaging
Internal
Organisation,
Sup
plier
General
Shahb
aziet
al.(201
6)
B13
.Produ
ctioncostsaregetting
high
erProdu
ctioncostsaregetting
high
erin
circular
econ
omy
Internal
Organisation,
Sup
plier
EL,
Swedish
Palm,Nilsson,
andÅhm
an(201
6),Shahb
azi
etal.(201
6)(3)Techno
logicalissues
B14
.Techn
olog
ical
limitatio
nsby
tracking
recycled
materials
The
increasing
complexity
ofprod
uctsmakes
the
effectiveandefficientrecovery
andreuseof
prod
uctsandcompo
nentsamassive
challeng
e
Internal
Organisation,
Sup
plier
General,
China
Market
Genov
eseet
al.(201
5),Suet
al.(201
3),
Pring
le,Barwoo
d,andRahim
ifard(201
6),
Ghisellini,Cialani,andUlgiati(201
6),Velis
andVrancken(201
5),Shahb
aziet
al.(201
6)B15
.Itisdifficultforenterprisesto
manageprod
uctqu
ality
throug
hthelifecycle
ofaprod
uct
Difficultto
manageprod
uctqu
ality
throug
hthe
lifecycle
ofaprod
uct
Internal
Organisation,
Sup
plier
General
Singh
andOrdoñ
ez(201
6),Ghisellini,Cialani,
andUlgiati(201
6),Sabaghi,Mascle,
and
Baptiste
(201
6)B16
.Maintaining
quality
ofprod
uctsmadefrom
recovered
materials
Difficultto
managequ
ality
ofprod
uctsmade
from
recoveredmaterials
Internal
Organisation,
Sup
plier
General
Singh
andOrdoñ
ez(201
6),Ghisellini,Cialani,
andUlgiati(201
6)
B17
.Designchalleng
esto
reuse
andrecovery
prod
ucts
Designchalleng
esto
durable,
reuseandrecovery
prod
ucts
Internal
Organisation,
Sup
plier
General
Ghisellini,Cialani,andUlgiati(201
6)
B18
.Challeng
esto
safe
return
tothebiosph
ere
Challeng
esto
separate
materials.Techn
olog
yin
how
tosafely
return
tothebiosph
ereor
toa
cascadeof
subsequent
uses
isneeded
(Bio
refinery)
Internal
Organisation,
Sup
plier
General
Ghisellini,Cialani,andUlgiati(201
6)
B19
.Maketherigh
tdecision
inSCto
implem
entCEin
themost
efficientway
Decisionmakingon
effectivetechno
logies,
practices
andactors
canim
prov
ethechancesof
CEim
plem
entatio
nin
SC
Internal
Organisation,
Sup
plier
General
Pan
etal.(201
5)
B20
.Accurateinform
ation
regardingmaterials/tracking
inSCtowards
recyclingisno
tavailable
Precise
inform
ationisno
tavailableto
decision
-makers,or
itisno
tprov
ided
inatim
elyway
Internal
Organisation,
Sup
plier
China
Suet
al.(201
3)
(4)Kno
wledg
ean
dskill
issues
B21
.Lackof
reliableinform
ation
topu
blic
andthereforeitis
difficultto
reuse/recycle/
remanufacture
prod
ucts
Lackof
reliableinform
ationto
theenterprises
Internal
Society
China
Market,EU
Suet
al.(201
3),Liu
etal.(200
9),Maitre-Ekern
andDalhammar
(201
6)
B22
.Lackof
public
awareness;
therefore,
itisdifficultto
reuse/
recycle/remanufacture
prod
ucts
Lackof
awarenessandsenseof
urgencyby
public
Internal
Society
China
Market
Suet
al.(201
3),LiederandRashid(201
6),
Sauvé,Bernard,andSloan
(201
5),Liu
etal.
(200
9),Genget
al.(200
8),Weelden,Mug
ge,
andBakker(201
6)B23
.Lackof
skillsby
employ
ees
inCE
Enterprises
lack
theskillsto
getthecircular
econ
omyim
plem
entedin
theirsupp
lychains
Internal
Organisation,
Sup
plier
China
Market
Liu
andBai
(201
4)
Internal
Con
sumer
Weelden,Mug
ge,andBakker(201
6)
(Con
tinued)
International Journal of Production Research 297
Table
5.(Con
tinued).
Barriers
Descriptio
nInternal/
External
Stakeho
lder
Indu
stry/
Market
Sou
rces
B24
.Con
sumerskn
owledg
eand
awarenessabou
trefurbishm
ent
Con
sumer
know
ledg
eandaw
arenessabou
trefurbishm
entprod
uctsareno
tcorrect.Many
peop
lethinktodaythat
new
prod
uctsareof
betterqu
ality
than
refurbishedprod
ucts
China
Market
(5)Man
agem
entissues
B25
.Poo
rleadership
and
managem
enttowards
CEin
SC
Poo
rleadership
andmanagem
entincreasesthe
chancesof
lack
ofintereston
circular
econ
omy
implem
entatio
n.For
instance,nearly
70%
ofthe
firm
sdidno
tadop
tcleanerprod
uctio
nauditin
gand93
%didno
testablishaspecialcircular
econ
omymanagem
entdepartment.Lim
itedtop
managem
entcommitm
entandsupp
ortfor
sustainabilityinitiatives
(Liu
andBai
2014)
Internal
Organisation,
Sup
plier
China
Market
Suet
al.(201
3),Liu
andBai
(201
4),Shahb
azi
etal.(201
6)
B26
.Higherpriority
ofother
issues
orrequ
irem
entsin
SC
Higherpriority
ofotherissues
orrequ
irem
ents,
e.g.
prod
uctio
nexpansion/marketshareby
the
managem
ent
Internal
Organisation,
Sup
plier
General
Shahb
aziet
al.(201
6)
B27
.Organisationalstructure
makes
itdifficultto
implem
ent
CEin
SC
Firm’sorganisatio
nalstructures,such
asan
inefficientbu
reaucracy,
areabarrier
Internal
Organisation,
Sup
plier
China
Market
Liu
andBai
(201
4)
(6)Circularecon
omyfram
eworkissues
B28
.Lackof
successful
business
mod
elsandfram
eworks
toim
plem
entCEin
SC
Lackof
successful
business
mod
elsand
fram
eworks
forcircular
econ
omy.
Inform
alrecovery
andintegrationinto
thefram
eworkare
needed
forthecircular
econ
omy
External
Gov
ernm
ent
General
Scheinb
erget
al.(201
6),Lew
ando
wski(201
6)
B29
.The
who
leSCneedsareno
tinclud
edManydevelopednatio
nsou
tsou
rcetheirprod
ucts
tolow
wagenatio
ns,which
brings
prod
uctsas
wellas
waste
generatio
n.How
ever,thereisno
such
specificity
oncircular
econ
omydealing
with
thefocuson
subsupp
liers
External
Gov
ernm
ent
General
Bartl(201
5)
B30
.Other
solutio
nsmight
bemorefavo
urable
than
implem
entin
gCEin
SC
The
circular
econ
omyismainlyfocusedon
recyclingandincreasing
recyclingrates.
How
ever,otherop
tions
might
befavo
ured
comparedto
therecycling
External
Gov
ernm
ent
General
Bartl(201
5)
(7)Culture
andsocial
issues
B31
.Lackof
enthusiasm
towards
CEin
SC
Researchshow
sthat
nearly
90%
oftheindu
stries
don’thave
thego
odrelatio
nshipwith
inthe
indu
strial
parksandotherneighb
ourindu
stries
toestablisheco-indu
strial
chains.Linear
techno
logies
aredeeply
rooted
Internal
Organisation,
Sup
plier
China
Market
Liu
andBai
(201
4),JawahirandBradley
(201
6),Shahb
aziet
al.(201
6)
B32
.Con
sumer
perceptio
ntowards
compo
nentsthat
arereused
isCustomersgenerally
have
thewrong
perceptio
nson
refurbishedprod
uctsandqu
estio
ntheir
quality,health
andsafety.Hence,thislack
of
Internal
Con
sumer
EU,
General,
Genov
eseet
al.(201
5),ZhijunandNailin
g(200
7),Genov
eseet
al.(201
5),Ghisellini,
(Con
tinued)
298 K. Govindan and M. Hasanagic
Table5.
(Con
tinued).
Barriers
Descriptio
nInternal/
External
Stakeho
lder
Indu
stry/
Market
Sou
rces
flaw
edandthereforemakes
itmoredifficultto
implem
entCE
willingnessto
buyused
productsforces
the
remanufacturers
tono
tgo
forrefurbishing
/remanufacturing
China
Market
Cialani,andUlgiati(201
6),Liu
andBai
(201
4),
Weelden,Mug
ge,andBakker(201
6)
B33
.Lackof
thethrillof
newness
byconsum
ersishigh
Studies
show
that
whenthethrillof
purchasing
anew
prod
uct(new
ness)islacking,
itisdifficult
tomotivatethat
thrillwith
refurbishedprod
ucts
Internal
Con
sumer
China
Market
Weelden,Mug
ge,andBakker(201
6)
(8)Marketissues
B34
.Challeng
esof
take-backfrom
othercompanies
There
arechalleng
esto
developatake-back
mechanism
from
othercompanies
Internal
Organisation,
Sup
plier
General
Ghisellini,Cialani,andUlgiati(201
6)
B35
.Nostandardson
refurbishm
entprod
ucts
Asthereareno
standardson
refurbishm
ent
products,thequality
isnotconsistently
high
Internal
Society
China
Market
Weelden,Mug
ge,andBakker(201
6)
B36
.Ownershipissues
fortaking
advantages
ofreuse
oppo
rtun
ities
ofCEin
SC
Con
sumer
acceptance
of‘accessto
service’
rather
than
ownershipneedsto
bestreng
thened
Internal
Con
sumer
EU
Singh
andOrdoñ
ez(201
6)
B37
.Service
prov
iderscann
otlegally
retain
ownershipof
asold
prod
uctwhich
makes
itdifficultto
implem
entCE
Taking
back
prod
uctsforreusebecomes
atoug
htask
forserviceprov
idersdu
eto
thelegal
prob
lemsof
retainingthesold
prod
uct
External
Gov
ernm
ent
EU
Tuk
ker(201
5)
B38
.Lim
itedavailabilityof
reuse
prod
ucts
The
availabilityof
refurbishm
entprod
uctsisno
tconsistently
high
todayandconsum
ersmay
not
have
theopportunity
tochoose
aremanufactured
prod
uct
Internal
Con
sumer
China
Market,
Netherlands
Weelden,Mug
ge,andBakker(201
6)
B39
.Rem
anufacturing
isconsum
ingandlabo
ur-intensive
procedure
Rem
anufacturing
processplanning
istradition
ally
heavily
depend
enton
experiencesandkn
owledg
eInternal
Organisation,
Sup
plier
General
Jianget
al.(201
6 )
International Journal of Production Research 299
Again, the stakeholders used by the drivers and practices, barrier stakeholders include consumers, society, the organisa-tion, suppliers and the government. From the 39 identified barriers, 10 are related to the external environment and 29are related to the internal environment. Consumers are related to 5 of the barriers, government is related to 10 of thebarriers, society is related to 3 of the barriers, and finally the combination of the organisation and suppliers are relatedto 21 of the barriers.
Selected barriers are then classified into eight clusters as follows:
• Governmental issues: this cluster refers to the lack of standard systems for performance assessment, recycling poli-cies that are ineffective to obtain high quality, new laws that are passed with insufficient coordination and existinglaws that do not support the circular economy.
• Economic issues: this cluster includes financial and economic barriers related to the implementation of the circulareconomy in a supply chain.
• Technological issues: this cluster refers to the barriers regarding technological limitations, managing uncertainty atthe end-of-life phase for products, managing product quality through the lifecycle of a product, design challengesto create or maintain durability, etc.
• Knowledge and skill issues: this cluster includes the lack of reliable information, lack of public awareness, lack ofskills and the lack of consumer awareness to the value of refurbished products.
• Management issues: this cluster refers to the lack of support from top management; other issues have a higher pri-ority in enterprises and within the organisational structure.
• Circular economy framework issues: this cluster includes the circular economy framework issues; other solutionsmight be more favourable than the circular economy framework.
• Culture and social issues: this cluster refers to the lack of enthusiasm towards enacting the circular economy, con-sumer perception towards reused products and the thrill of purchasing a new product.
• Market issues: this cluster includes considerations such as externalities that prevent companies from taking advan-tage of refurbished products, regulations around ownership and no industry standards on refurbishment products.
3 32
1 1 1 1 1 1 1
76 6
43 3 3
2 2 21 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
0
1
2
3
4
5
6
7
8
Num
ber o
f art
icel
s
BarriersExternal
Internal
Figure 9. Frequency of barriers.
300 K. Govindan and M. Hasanagic
This research also analysed the popularity of the circular economy barriers in a supply chain according to the num-ber of times the driver appeared in the article collection. The main barrier that appeared most often in this research wasthe consumer perception towards remanufactured products. If this challenge is not solved, it will not be possible for theenterprises to implement the circular economy. This barrier appeared seven times among the researched papers. The nextmost common barrier is the lack of public awareness of the circular economy, followed by the technology limitations bythe enterprises to make products that can be easily remanufactured. Both of these barriers appeared six times. An over-view of the popularity of the barriers is presented in Figure 9 below.
5.4 Towards a multi-perspective framework
Five types of stakeholders have been identified based on the existing literatures: customers, employees, shareholders, thegovernment and society (NGO). Some studies (see Fineman and Clarke 1996) categorise stakeholders as ‘green stake-holders’. Consumer pressure on companies has become more significant in the past decades. Secondly, a firm’s success-ful environmental programme must depend on the involvement, participation and commitment of its employees tosound environmental principles. Because firms want to create value in their business, it is imperative for corporate man-agers to consider the various relevant stakeholders’ perspectives on the environment and society. Upon occasion, thefirm’s environmental performance depends solely on stakeholder pressure. Because it is virtually impossible for a firmto satisfy all goals of their stakeholders, corporate managers must pay strategic attention to the level of influence of thestakeholders. Clearly, stakeholders affect the enterprises. Corporate managers need to carefully monitor their businessstrategies with regard to environmental issues to enhance the company’s reputation while simultaneously maintainingshareholders’ support.
Figure 10. Multi-perspective framework.
International Journal of Production Research 301
Finally, society may play a critical role by encouraging unethical firms to be more socially responsible. These stake-holders can change opinions all around the world, so more people are aware of environmental issues. Stakeholders workboth directly and indirectly with governments to influence corporate behaviour regarding environmental impacts on busi-ness activities.
To give the best overview and to show the connections among how the different drivers, barriers and practices influ-ence each other in relation to the stakeholders, a multi perspective framework is developed. Suppliers, the organisationand consumers are classified as internal environment, whereas the government and society are classified as externalenvironment.
To develop this framework, information from Tables 3–5 is utilised. The information from these tables is based theliterature that is been presented in the methodology section. This framework can be seen in Figure 10 below.
6. Discussion
In this section, the drivers, practices and barriers presented in earlier sections will be discussed in relation to the devel-oped framework in Figure 10. This section is divided into the stakeholders’ point of view on their drivers, practices andbarriers regarding implementation of the circular economy. The stakeholders are government, the organisation, society,supplier and consumers. Moreover, the stakeholder’s suppliers and organisation will be discussed in same section asmost of the drivers, practices and barriers are the same.
6.1 Circular economy drivers
6.1.1 Government perceptive
This primary reason why the government wants industries to implement the circular economy is that the population isgrowing and the demand for natural resources will increase (Bastein et al. 2013). China cannot meet its growingdemand for natural resources. Moreover, the increase in economic growth and heavy industries that began operation in2002 forms a major reason for the depletion of resources and energy. China’s national energy consumption was 3249Mt standard coal equivalents in 2010, which is not only the biggest on the globe but also has doubled over the last dec-ade. Because the country is energy-intensive and consumes massive resources, China must find innovative ways for sus-tainable economic development such as that offered by the circular economy (Su et al. 2013). Experts anticipate that theChinese industrial structure will continue to dominate the global market.
Another feature that motivates the government to implement the circular economy is the promise of job growth. Alarge part of job creation comes from the greater labour needs associated with reuse, remanufacturing and repair; theseprocesses are more labour-intensive than manufacturing. The recycling process will also have a high per cent of the jobscreated, but repair and remanufacturing will create more jobs compared to recycling (van Loon and Van Wassenhove2017). The reuse process will create higher-skilled jobs where recycling and waste management creates low or interme-diate skilled jobs in the areas of collection, handling and processing. Reuse gives a high placement rate in areas whereunemployment tends to be higher; remanufacturing, service and repair creates employment near existing manufacturing(MacArthur 2012).
According to a report of the Ellen MacArthur Foundation, implementing the circular economy can contribute to asignificant reduction of carbon emission by 2030. In addition, greenhouse gas emission may be reduced in the UK by7.4 million tonnes per annum, if organic waste was managed properly rather than sending it to landfills. Furthermore, acircular economy implementation could reduce materials consumption by 32% by 2030 and 53% by 2050 comparedwith today.
6.1.2 Organisational and suppliers perspective
The circular economy framework has become an important topic in business agendas over recent years. The implemen-tation of the circular economy presents a framework with opportunities for organisational gains in supply chain. Withenthusiasm shown by governments, particularly in Europe, government programmes have been established with a mottoof completing the circular economy objectives. Business communities particularly motivate the implementation of circu-lar economy due to the predicted financial gains over the supply chain. (Nederland Circulair 2015). Because many enter-prises are profit-driven, the circular economy is an attractive option. Thus, a primary driver for enterprises to implementthe circular economy is that they must keep within current laws for waste management. Recently, economic opportuni-ties from the usage of circular economy concepts have been pursued in the European Union (EU). These opportunities
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emerge from the advantages highlighted for industrial sectors in supply chains through the reduction of material costs orlarger profit pools (MacArthur 2013; Field and Sroufe 2007).
Furthermore, by implementing circular economy practices in supply chain, organisations can gain economic growth.This financial gain has been achieved by recovering all the raw materials that are currently disposed of in the linear‘take, make, and waste’ system. Studies from the MacArthur (2012) show that
based on detailed product level modelling, the report estimates that the circular economy represents a net material cost savingopportunity of $340–$380 billion per year at EU level for a ‘transition scenario’ and $520–$630 billion per year for an ‘ad-vanced scenario’. (Nederland Circulair 2015)
6.1.3 Society perspective
Public health is a major driver in European countries, but in recent years public health has failed to serve as a major dri-ver (Ilić and Nikolić 2016). However, in developing countries public health remains a key driver, as it was in the nine-teenth century for waste collection (Wilson 2007). In developing countries, human health still suffers due to poor wastemanagement practices. Waste directly affects public health because if it is managed improperly, disease spreads. Respira-tory illnesses occur from consuming or inhaling bio-aerosols and volatile organics, and dermatological problems emergefrom contact with dirty materials. In addition, open waste dumps, with disease-carrying insects, are highly infectious,particularly to weaker beings like children. According to the study of World Health Organisation in 2007 it was foundthat these types of environment are solely responsible for 20% of total disease burdens (Ilić and Nikolić 2016).
Modem agriculture rapidly improves productivity, but a heavy price is paid due to its overconsumption of resourcesand energy and due to the damages it enacts on the agricultural environment (Jun and Xiang 2011; Huang and Song2017).
6.1.4 Consumer perspective
From the perspective of consumers, refurbished products have not been explored much in the past. This is becauserefurbishment is mainly used in the business-to-business market (example: copiers). But recently, refurbishment is gain-ing interest among consumer companies (Cheng, Lin, and Tian 2013). Consumers are more wary if they think theirmobile phones, laptops or tablets are reused products. Similarly, in clothing and baby products, such as prams, travelcots or car seats, consumers seem to prefer virgin products (Weelden, Mugge, and Bakker 2016).
6.2 Circular economy practices
6.2.1 Governmental perceptive
Governmental regulations are crucial for the circular economy in supply chains, and a number of laws and policies serveas the foundation for critical practices. The first established is ‘Cleaner Production Promotion Law’, which becameeffective in January 2003. Next, the Pollution Prevention and Control of Solid Waste law was proposed on 1 April2005. After the introduction of these laws, many initiatives emerged all around the world in order to promote cleanerproduction activities. These initiatives include research, pilot studies and proposals that enhance knowledge throughtraining and education regarding cleaner production. One law that features a primary focus on the circular economy –the Circular Economy Promotion Law – was proposed on 1 January 2009. This policy was implemented in China, andmany other developed nations then began to promote their own national interest in the circular economy (Su et al.2013). Until this point, the government’s focus was mainly on the single entity (focal company) of the supply chainand generally ignored elements of the whole supply chain.
The government’s next step is to propose indicators by which to assess circular economy implementation and perfor-mance throughout supply chain. These good indicators are an effective tool to measure the status of implementation,and the indicators allow decision makers to propose new guidelines and development plans. New sets of indicators thatcorrespond to the type and level of applications, such as geography, industry, size of the firm and so on, are needed(Geng et al. 2012; Su et al. 2013).
Laws and policies are needed to introduce relevant environmental taxes and charges to make it more feasible forenterprises to adopt the circular economy in a supply chain. Two reasons help to identify why such an approach is supe-rior. The first reason is economic. Based on the externality tax approach, the marginal costs of external effects will bereflected in market prices, so that market actors will consider these in their mutual transactions. It is clear that the
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environment is not a free commodity but has a price tag (Andersen 2007). Another approach is that externality taxationoften gives an opportunity to develop new and cleaner technologies. Finally, externality approaches give flexibility forindividual enterprises as they will get more freedom to find their own solution.
6.2.2 Organisational and suppliers perspective
There are a couple of practices organisations must adopt if they plan to implement a circular economy in supply chain.Organisations must set up an eco-efficient industrial chain by the in-house circulation of materials and energy. Secondly,they should strive to gain profit by growing their business and by maximising resources and minimising pollution (Zhi-jun and Nailing 2007). According to Su et al. (2013) the implementation of the circular economy in supply chain man-agement can only be possible through integrating advanced technology in the processes. Advanced technology,especially helps producers to redesign, remanufacture and reuse the used product effectively (Tang, Grubbström, andZanoni 2004). However, in many cases the lack of technology is the major threat to the implementation of a circulareconomy. In China, for instance, available technology slows the pace of CE implementation due to weak financial initia-tives.
To implement a circular economy in supply chain for organisations, novel strategies, technologies, practices, frame-works, vision, mission, unique thinking and training are needed. The product and process innovation includes advancesin technology, but also the optimisation of current products, processes and systems in supply chain (Su et al. 2013;Jawahir and Bradley 2016). Education and training is also necessary to implement a circular economy in supply chain.Not only university education is important, but also virtual education is essential to educate and prepare the workforcefor the new shift in the manufacturing industry. Education should develop novel methodologies, including both quantita-tive and qualitative methodologies, to initiate innovations. Furthermore, there will also be a need for visionary thinkingthat can implement the circular economy in supply chain to address real-world problems (Jawahir and Bradley 2016).
6.2.3 Society perspective
While governmental regulations and industrial efforts are crucial for the development of a circular economy in supplychains, a fundamental requirement for the successful adoption of a circular economy rests on attitude changes through-out the whole society (Su et al. 2013). Practices in many countries indicate that public participation is crucial to thedevelopment of an effective circular economy (Zhijun and Nailing 2007; Su et al. 2013). The circular economy strategyrequires that the whole system of human activity will be reformed, beginning with consumption activities (Zhijun andNailing 2007).
6.2.4 Consumer perspective
Finally, the circular economy requires consumers to become more active participants in the recycling or reuse of prod-ucts and to change from the attitude of living in a passive throwaway culture (Ghisellini, Cialani, and Ulgiati 2016). Ifenterprises have adopted the circular economy, consumers need not only to return products after use, but also to will-ingly accept remanufactured products. However, research suggests that consumers have a poor opinion of remanufac-tured products and are typically not prepared to adopt them (Zhijun and Nailing 2007; Zhou et al. 2013). In addition,there need to be a tight relationship between the stakeholders including the customers (Yu and Ramanathan 2015). Forinstance, if a product doesn’t come under the closed-loop economy, then the producer need not produce the product andthe customer need not buy it. From this discussion, it is evident that the implementation of circular economy is a sharedresponsibility of all stakeholders. For instance, in the Japanese system for electrical equipment, the government posed alaw that says it is the customer’s responsibility to return their used product for recycling (Ghisellini, Cialani, and Ulgiati2016).
Among other stakeholders, the customer’s responsibility is the key driver, which forces the firms to implement a cir-cular economy. Further, this responsibility of the customer results in the introduction of more sustainable materials andpractices (Ghisellini, Cialani, and Ulgiati 2016). Hence, many researchers have studied the topic of customer responsibil-ity and other collaborative stakeholder responsibility models to explore the effective implementation of circular econ-omy. Collaboration models emphasise sharing, lending, renting; the basic idea is shared ownership among multipleconsumers. That means consumers do not own the product but can use it by paying a charge (Ness 2008).
Studies have shown that customer willingness towards the refurbished product can be increased with the approval ofthe original manufacturers towards that refurbished product. Also, it is necessary to give awareness of the environmental
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benefits of refurbished products to the customer to improve their willingness to buy the refurbished products (Weelden,Mugge, and Bakker 2016).
6.3 Circular economy barriers
6.3.1 Governmental perceptive
Research shows that there are many barriers that make it difficult for enterprises to adopt a circular economy in supplychain. One of them is the government’s unwillingness to take initiatives to develop better economic and financial instru-ments for industries. Lack of financial support from governments through banks, tax reductions and incentives hinderthe interest of implementing circular economy through eco-efficient strategies (Su et al. 2013). For example, in China, amajor barrier to the implementation of circular economy is poor legislation. The enforcement laws are not strict, andthere are complex systems in place with corruption. Hence, it is mandatory to construct proper systems to redefine theperformance and practices through corresponding indicators and to make the supply chain transparent. However, localgovernments should collect the exact status of their provinces with the concern of circular economy and these datashould be further transferred to central governments for policymaking. Currently, no such practices and relationshipsexist between local and central governments.
This frustrates local government officials because they do not know what needs to improve or what goals theyshould pursue. The government should make specific local indicators to each region rather than relying on national indi-cators because differences exist between the rich and poor regions.
Furthermore, developed nations (EU) generally outsource their products to developing and low-wage countries, sothat the waste generation is also outsourced. Hence, it is vital to govern the whole supply chain including two andthree-tier suppliers involved in the supply chain. However, these areas are generally untouched in the proposed lawsand agendas; there are no specific insights on managing circular economy with sub suppliers. 6R strategies are only pre-scribed to the focal company. In addition, as discussed earlier, a sole reliance on recycling cannot implement effectivecircular economy regulations because export and import activities play a major part in implementation.
6.3.2 Organisational and suppliers perspective
Several researchers have attempted to explain the limited appeal of refurbishment products in the today’s consumer mar-ket. Various companies fail to acknowledge the value of refurbishment, and they are dissuaded by the idea of highupfront investments costs to implement circular economy in supply chain (Weelden, Mugge, and Bakker 2016).
Enterprises face many challenges to adopting the circular economy in a supply chain. First, technology requires thatproducts must be designed to be recycled or remanufactured. From the report of the European Commission (2014),improper and complex product designs become a major challenge for remanufacturers and recyclers. On the other hand,customer’s specific requirements force the manufacturers to make their product unique and to serve a specific purpose(Kang and Hong 2010). With these cases, refurbishment, disassembly and reuse become a tough task, so it is necessaryto design the product with the concerns of a circular economic perspective from the initial design (Nederland Circulair2015).
A company’s lack of technical capabilities, skilled people and product quality concerns create difficulties to develop-ing well-functioning refurbishment facilities. Further, there are no guidelines and standards on refurbishment, whichresults in a variety of product quality on the market for refurbishment. A lack of recognition of these facts exists amongauthors, companies and consumers in the refurbishment products (Weelden, Mugge, and Bakker 2016).
6.3.3 Society perspective
Practices in Germany and Japan show that public participation is crucial to the development of the circular economyprogramme. Different researchers have shown that the human and institutional capabilities to inspire public participationin the circular economy and environmental management programmes and facilities at many academic organisations arelimited. This limitation is clearly expressed in Tianjin, a pilot city for a circular economy, where the public has limitedawareness and poor understanding about the circular economy programme. A survey from Xue et al. (2010) reveals aresult where only 16.70% of the people interviewed had heard of the circular economy; this figure indicates that there isstill a serious need for government activities to educate the population about the circular economy (Su et al. 2013).
Furthermore, research from Weelden, Mugge, and Bakker (2016) shows that the availability of refurbishmentproducts is not high, so consumers do not frequently have the opportunity to consider refurbishment; they believe new
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alternatives are better than refurbished products. For example, one consumer interviewed states that new phone alterna-tives had extra gigabytes which were not available in refurbishment products. However, this presumed limitation can beresolved because there are opportunities to add such features in phones.
6.3.4 Consumer perspective
According to Jiménez-Parra, Rubio, and Vicente-Molina (2014), there is a need of new strategies and frameworks toshift the insights of refurbished products among customers, because they often have negative opinions on these products(Khor and Hazen 2017). Consumers’ perspectives on refurbished products are largely unexplored. However, previousresearch reports that the extra functionalities offered by the new product are not the barrier that prevents a refurbishedproduct from being chosen. Instead, the customers’ lack of acceptance of second hand products is the major barrier. Inaddition, when the availability of used products is uncertain, the firm holds back from refurbished product. Consumeracceptance is critical if enterprises expect to benefit from refurbishment products. Literature confirms that the con-sumer’s response towards refurbishment products focuses on willingness to pay (WTP). The result shows that consumersshow a lower WTP for refurbishment products due to a higher perception of risk and a lower perception of quality forrefurbishment products. This lack of understanding and knowledge on refurbishment products is a critical factor. Currentinsights are not sufficient to understand how consumers evaluate refurbishment products, but some results show thatconsumers’ acceptance to buy refurbishment products is central to the success of a circular economy.
6.4 Further insights
This content analysis is based on 60 papers located by the criteria described in Section 4.1. The factors identified in thisresearch are the drivers, practices and barriers that can affect the implementation of the circular economy in a supplychain. These factors were both analysed for the macroenvironment and the micro environment. The choice of stakehold-ers for this project was successful, and the framework regarding drivers, practices and barriers that can influence imple-mentation of circular economy in supply chain has been successful.
This analysis has shown some insights into the circular economy with regard to the drivers, barriers and practicesfor enterprises to adopt a circular economy. This research reveals that there are few studies that mention the drivers,practices and barriers in society and by consumers. Furthermore, the government has a big role and a high impactregarding implementation for the circular economy. It is very important that governments are aware of the problem andcontinue to have it on their agenda. Moreover, it is also important that the laws made by the government are imple-mented in a sufficient way; other laws make it difficult for enterprises to develop a circular economy in their supplychain. The research also shows that the big drivers are job potential, climate change and population growth. The biggestlimitation to adopting a circular economy concerns limitations in technology to make a product in a durable design. Thebiggest practices changes that must be made to adopt a circular economy are to increase awareness on the economy andon performance indicators, both of which are crucial to the development of the circular economy programme.
Literature resources that did not fulfil the criteria of this methodology section were examined but not included in thisstudy; literatures that were sufficient have contributed to the analysis. More drivers and barriers could be identified forthe multi perspective framework. Other literatures have identified additional drivers to the circular economy in a supplychain, including developing and spreading knowledge, a more secure supply of raw materials, new incentives for manu-facturing sectors, innovation in logistic sectors and gaining more innovative technology (MacArthur 2015). These dri-vers will be important to consider because they describe why enterprises should implement circular economy in theirsupply chains. Furthermore, drivers for the green supply chain have been analysed, some of which have not been men-tioned in the papers for circular economy. These drivers are as follows: enterprises can gain competitive advantage bybecoming greener (Zaman et al. 2016), employee and customer satisfaction (Jilcha and Kitaw 2017), working conditions(Jilcha and Kitaw 2017), quality of products (Jilcha and Kitaw 2017), green marketing (Jilcha and Kitaw 2017),improved customer interaction (MacArthur 2015), customer loyalty (MacArthur 2015) and certification (Montabon et al.2000).
Additional barriers to the circular economy are identified in other literatures but not used in this research. These bar-riers could exist on either the micro-level or the macro-level. The 12 identified barriers include: the lack of clarity onrecycling and reuse techniques and their importance, that regulations are not very strict, which should be strengthenedwith considerations of waste import and export (EEA 2012), innovation policies should be upgraded with the concernon implementing circularity effectively (Kok, Wurpel, and Ten Wolde 2013), public procurement standards are notspecific enough on recycled products (Eijk 2015), insufficient access and infrastructure for reuse (European Commission2014), lack of information exchange system (Kok, Wurpel, and Ten Wolde 2013), exchange of materials is limited by
306 K. Govindan and M. Hasanagic
capacity of reverse logistics (Kok, Wurpel, and Ten Wolde 2013), limited application of business models (Kok, Wurpel,and Ten Wolde 2013), challenges to separate the bio from the technocycle (Kok, Wurpel, and Ten Wolde 2013), share-holders with short-term agendas dominate corporate governance (Eijk 2015), uncooperative suppliers (Shahbazi et al.2016) and that a champion has developed circular economy in an effective way (Eijk 2015).
7. Conclusion
The growing population places pressure on natural resources, and this unfettered growth makes it imperative to shiftfrom the traditional linear model (take-make-dispose) to a circular economy. With this great need for the circular econ-omy, researchers are urged to explore the implementation of the circular economy through identifying the drivers, barri-ers and practices with a focus of the supply chain. Data gathered through a systematic literature review begins with thepurpose of understanding the motivational factors relevant to the implementation of a circular economy in a supplychain. A second objective is to gain insight into the best way to get a CE implemented in an enterprise’s supply chainfrom different stakeholders’ perspectives. Moreover, the purpose is to understand the barriers that challenge enterprisesto implement a circular economy in their supply chain. In this research, 60 papers were examined to determine what dri-vers, barriers and practices pertain to developing the circular economy in a supply chain. In general, the number of pub-lications in the field is growing as interest in the circular economy increases worldwide. A systematic approach ofcontent analysis was applied to enhance the reliability and validity of results. From the review, 13 drivers, 34 practicesand 39 barriers were identified. Furthermore, a multi-perspective framework regarding stakeholders and their involve-ment in adopting circular economy was proposed based on the systematic review. All these factors were classified inrelation to the importance of the stakeholders; further, the factors are related to both the microenvironment and themacro environment depending on their nature. However, the overall contribution of this study was to obtain insightsabout the factors that influence a successful adoption of the circular economy in organisations, using perspectives fromgovernment, society and consumers.
Results show that in general the government has an important role regarding implementation of the circular economyin supply chain due to high upfront investment costs. Furthermore, because many companies are profit-driven, profitsare often considered before environmental impacts. Therefore, it is important for the government to make laws and poli-cies that the organisations should follow. The study also shows that organisations have problems in solving technologi-cal challenges because products should be designed with environmentally friendly technology. Moreover, an awarenessof the circular economy should be more highly regarded in society and by consumers. These are key barriers that hinderthe implementation of the circular economy, and awareness of these factors could be an important source of informationto managers and decision-makers. On the organisational side, managers should acknowledge the drivers to successfullyimplement the circular economy. The proposed framework should be tested and empirically investigated. Factors areidentified and classified to facilitate further investigation and analysis. Further research can be done by including multi-ple stakeholders into the framework and other organisational theoretical frameworks or adapting this structure to con-sider a specific country’s needs. Finally, further research can be done by analysing multiple cases looking into circulareconomy from different sectors.
Disclosure statementNo potential conflict of interest was reported by the authors.
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