Circular Economy Practice
Discuss about the Circular Economy Practice.
Circular economics a way has been on the rise in many companies especially those located in Europe and China. It has promoted maximum utilization of resources within firms which have promoted the growth of these companies and the rise of the general economy of the countries from which these firms comes from (Mishkin 2007, p.26). Circular economics is essential for growing firms and already established companies as it enhances productivity. The report is written to explain why Deloitte Consultant Company should embrace circular economy.
Is a renewing system where resources resource inputs and energy leakage, emissions are minimized by reduction of material loops and energy. It is enhanced by designing of systems which are long lasting, maintenance of existing systems, reprocess of items and materials produced and finally ensuring there is a maximum recycling of all individual material components of a particular system.
The circular economy has a history of its origin cannot be traced to a single person on a particular date. There are some schools of thought to explain this origin. Concentrating on three, they include Cradle to Cradle, Natural Capitalism, and Performance economy.
German chemist postulates that all materials involved in commercial and industrial procedures are all nutrients. The philosophy says that products can be designed to be continuously reutilized and this will enable reduction of negative by-products in the environment.
The school of thought majors on the usage of natural assets in production. The products and the by-products should be a natural resource. The natural resources include soil, air, water and living organisms. The major point is shifting to biologically enhanced production and reinvestment in natural capital.
Walter Stahel considers production as a closed loop. It majors on a product-life extension, reconditioning of activities, long-lasting goods, and waste prevention. He argues out that there should be a shift to selling services rather than goods which falls under functional service economy.
Some of the benefits of Circular economy include saving of finances, increasing of value of materials, development of new markets, building of loyalty with customers, satisfaction of customer needs, enhancement of security, retaining of employees, building a brand and promotion of the business name, enhancement of lower risks to investors and finally promotes upholding of government policies and procedures (Willard 2012, p.67).
Circular economy helps save money and resources in all ways. Hundreds of million dollars are saving yearly by companies that observe circular economy. Google Company asserts the same thing that but the repurposing of hardware in data centers, it promotes the company sustainability and a lot of finances are saved through this redirection of data components.
The value of materials produced under circular economy environment are of good quality and sometimes better than those produced under the normal economy. Goods produced under circular economy have different components of some original goods. Different brands are formed through this. There is increased utilization of things which could have been wasted prior. Likewise, new markets are formed as a result of new items formed as a result of the circular economy. The products formed has demand which leads to an expansion of the existing market. Fresh jobs are formed due to this economy and new opportunities for investments are assured (Kirchhoff 1994, p.45).
Schools of thoughts to explain origin Circular Economy
Retaining of new employees is enhanced. Different firms deeply consider and value their employees since they have advanced skills in their working. The firms cannot afford to lose them in their system hence they opt to retain them in their firms to continue rendering their services. Old employees have advanced skills and great performance is what is derived from them. Similarly, building a loyalty to customers and also enhancing their satisfaction is achieved in circular economics. Customers are satisfied when they continue receiving good and even better services and goods from firms. Through circular economy better good and services are achieved which makes customers to remain loyal to firms and satisfaction of the customers is reached.
Lower risks to investors and also government policies are upheld through a circular economy. Investors experienced reduced risks when resource materials are maximally utilized. It ensures that fewer losses are experienced and the range of profit is increased, this favors investors. Government policies of reduced pollution and responsible utilization of resources by firms are achieved through a circular environment. All regulations set by the government are achieved, which is a win-win situation.
Circular Economy as postulated by Ellen MacArthur promotes the competitive advantage of a company within a market. A firm is in a better position to provide better services and quality goods compared to other companies which do not embrace circular economy (Fuchs and Dyllick 2016, p.57). Better financial records and capital power is another competitive advantage experienced by firms practicing this economy. There is good management of assets and overall stakeholders since they are constantly maintained and retained respectively. A firm is more advantaged in practicing the circular economy compared to others that do not practice.
Google believes in the power of circular economy practice. It has adopted the restorative and regenerative design to keep their products at the highest value for its customers. The Google Company has partnered with Ellen MacArthur Foundation to help Google entrench circular economic principles. This has helped the company build its infrastructure, culture and operations. The company uses this practice to manage its data centers. This has benefited the company in saving cost.
Coca cola enterprises
The company employs circular economy practices in its packaging sector. It ensures recycling, up cycling, resource efficiency and it also makes use of the recycled materials. This has enabled them to achieve zero wastes at plant production level. The bottles and cans are recyclable and even their plastic bottles have been used by other companies. The coca cola company therefore views circular based economy as a sustainability and business opportunity.
The DLL Group offers advisory services mostly to the food industries, healthcare, construction and transportation companies. The company has adopted circular economy principles when offering this advice. They aim to give perceptions on regulations and standards that the manufacturers should consider when implementing the circular economy practices.
One of the companies which have incorporated the circular economy practice is Aramark. This is a company in the food industry. The company has a target of reducing food wastage by approximately 50 percent by the year 2030. The company has however achieved a part of its target so far. All this has been made possible by adopting the circular economy practices. Some of the practices it has adopted include setting standards for ordering and receiving food orders. The company has also set standards for receiving, preparing, setting tracks for serving and also tracking the levels of food production (Ghisellini, Cialani, & Ulgiati, 2016 p.15). The company has partnered food waste reduction experts to ensure waste minimization and prevention. Aramark has adopted the practice of donating foods in instances of overproduction. It donates the food mostly to food relief agencies.
Benefits of Circular Economy in Deloitte Company
Companies such as Aramark food service provider which have incorporated the circular economy practices have highly benefited from improved productions, waste elimination produces efficient products and contributes to a more thriving and competitive economy. Productions have been improved in the sense that the company has controlled production. It only concentrates on producing according to the demands of the consumer. This, in turn, leads to waste minimization. For instance, a firm such as Aramark has a high possibility of overproduction which may lead to a huge wastage. The circular economy practice provides a competitive advantage for any business (Lacy, & Rutqvist, 2016 p.680). This is through cost-saving and quality controlled production. A company that spends less on production has an advantage over a company that spends huge amounts on production. Consulting firms such as Deloitte should, therefore, adopt circular economy practices. They will be in a better position to provide quality advice to their clients.
Australian companies can easily adopt the circular economy practice. The first step is to understand the five circular models of business. The first model is recovery and recycling. This involves companies such as grocery stores selling blemished groceries at a discount to prevent wastage. The next model is the circular supply chain (Bocken, Pauw, Bakker, & van der Grinten, 2016 p.310). This involves companies in the tire manufacturing industry to make use of worn out tires for shoemaking. The third model is sharing platforms. This is a way of allowing people to dispose of products they no longer use. The fourth model involves the extension of product lives. The companies should refurbish the items and resell them to other people who are in dire need. The fifth model is the use of products as services. This involves products such as music where we can access music through an app instead of a CD. If Australian companies apply these five models, they will be on the safe side of managing for sustainability.
Australian companies should also involve the right people when adopting the circular economy practice so as to ensure its success. Sustainability is driven by the heart and the willingness of the experts involved in the formulation of the practice (Murray, Skene, & Haynes, 2017 p.373). For instance, when the Apple Company announced its decision to recycle its products in the future, they said that the decision will be made by the core of the company and not just an individual. The companies seeking to adopt sustainability should formulate a team to ensure coordination of all the other members of the organization.
In conclusion, circular economy practice is important for any business. It enhances the productivity of a business. Through this practice, companies are also able to reduce product wastage in the business. Australian companies should, therefore, adopt the circular economy practice for better sustainability.
Bocken, N.M., de Pauw, I., Bakker, C. and van der Grinten, B., 2016. Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 33(5), pp.308-320.
Fuchs, L. and Dyllick, T., 2016. Circular Economy Approaches for the Apparel Industry (Doctoral dissertation, Universität St. Gallen).
Ghisellini, P., Cialani, C. and Ulgiati, S., 2016. A review on circular economy: the expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production, 114, pp.11-32.
Kirchhoff, B.A., 1994. Entrepreneurship and dynamic capitalism: The economics of business firm formation and growth. ABC-CLIO.
Lacy, P. and Rutqvist, J., 2016. Waste to wealth: The circular economy advantage. Springer. Pp 678-690
Mishkin, F.S., 2007. The economics of money, banking, and financial markets. Pearson education.
Murray, A., Skene, K. and Haynes, K., 2017. The circular economy: an interdisciplinary exploration of the concept and application in a global context. Journal of Business Ethics, 140(3), pp.369-380.
Willard, B., 2012. The new sustainability advantage: seven business case benefits of a triple bottom line. New Society Publishers.
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