Circular economy: rethink before reducing

The circular economy represents a paradigm shift in the way society is interrelated with nature. It seeks to avoid the depletion of resources, close energy and material cycles and facilitate sustainable development. It began to develop in 1980, but it was not until 2012 when, through the Ellen MacArthur Foundation, the term became popular.

There is no doubt that today companies, supported or pushed by institutions, are making great efforts to move from a linear economic model to a more sustainable one. The objective is that resources and materials are kept within the supply chain as long as possible, so that the Earth can regenerate while seeking a balance between economic progress, social development and environmental care necessary for the well-being of citizens. However, it is not so easy or obvious to get it right.

From reducing to rethinking

If we go back to the beginning of the 20th century, in 1913 a new industrial era began, Fordism, inspired by the Ford assembly line and based on chain production and the mechanization of work with specialized labor.

In the 70s it would be replaced by Toyotaism, the Toyota production model, which was baptized in the West as lean manufacturing. The principles of lean They are based on determining the value of the product for customers and defining the value chain. From the beginning, the most practical way to apply these principles was to focus on waste, that is, what did not add value, and, using simple tools and teamwork, try to eliminate or reduce it. This is the basic idea of ​​almost all improvement systems currently operating in companies.

This concept of Reduction has been implicit in the very definition of the lean and, in fact, today many of the corporate sustainability strategies are oriented towards reducing consumption or raw materials. And it’s not bad. However, the Reduction it is only one of the erres associated with the circular economy and it is in the Rethink where the true paradigm shift resides. Let’s take some examples:

• Rethink by reducing resources

  Following a business strategy focused on reducing resources, some factories are implementing systems aimed at reducing the water sent to the treatment plant. This reduces consumption in production processes without deteriorating quality and, consequently, improves the productivity indicators of the factory. But would this solution be sustainable for the factory in social and environmental terms if the pollutant load per liter of water increased due to this reduction?

• Rethink valuing waste

  Other industrial strategies seek to value the waste they produce by giving them a new use and also trying to reduce the impact that these same waste generate in their factories. For example, in the food sector, thanks to the development of new biotechnologies, business models linked to new products that can be extracted from the current waste of raw materials are being explored.

  In some cases, these businesses cannot be carried out because the volume of waste generated is not enough to start the transformation process. In these cases, could it make sense to increase the use of these raw materials to minimize their net use with a more holistic view of your entire value chain?

• Rethinking by doing industrial symbiosis

  Another possible path is industrial symbiosis. This strategy contemplates collaboration between companies, so that the waste of one can be the food of another. But why settle for the resource that is obtained from a company’s process and not make a joint design?

  Let us suppose that a company uses water in its production process and, before the treatment in the purifier, the nutrients dissolved in the water from the washing of the vegetables can help to improve the yield of the nearby crops. Could the farmer use that water? What would happen if the industrial company increased its consumption, considering in its process the water that the farmer needs? In this case, once used – possibly with a higher yield by increasing the flow rate – it would be sold at a price that could be even lower than what the farmer would have to pay at origin.

The circular economy is proposing a radical change of approach to what we usually do. It will not be enough to make small adaptations if we continue doing what we always do. We must put the focus on R from Rethink, even if it is not simple or immediate. Neither was the transition from Fordism to Toyotism, but today continuous improvement is not understood without its basic principle of reducing waste. Adapting production models to a sustainable circular economy is a necessary change that, well understood and assumed, will be appreciated by future generations.

Javier Santos, Professor of Business Organization, university of Navarra; Carmen Jaca, Titular teacher, university of Navarra and Elisabeth Viles Díez, Professor. Deputy Director of the Institute of Data Science and Artificial Intelligence. Tecnun, university of Navarra

This article was originally published on The Conversation. read the original.