Case for sustainability in strategy and operations : overcoming the challenges of product design in creating competitive advantages in circular supply chains

Abstract

The previous industrial revolutions coupled with long-established business models have created a lock-in towards a linear 'take-make-dispose' model of production and consumption - products are manufactured using non-renewable sources and raw materials, manufacturing wastes are discarded as unusable, product is sold through the supply chain often creating more disposal of wastes, the final product is used by the end consumer till a less than optimal end-of-life, and then disposed or incinerated as landfill. The effects are clear and unsustainable - rapid spikes in resource prices, dangerous price volatility in the economy, discomforting signs of resource exhaustion and a trend towards business uncertainty and disruptions that can derail economic and social growth. The need for an alternative business model is becoming paramount, compelling organizations to find solutions to advance resource performance by reusing, remanufacturing, refurbishing and recycling products and parts to restore non-renewable resources, essentially 'closing the loop'. The management thinking behind creating this circular or 'cradle-to-cradle' supply chain rather than a linear or 'cradle-to-grave' model addresses the various aspects of revamping a business model from product design to recycling methods. This thesis focuses on overcoming challenges of product design in achieving that end. The paper is structured around four chapters. Chapter I opens the paper with an analysis of the circular supply chain model as compared with the linear consumption model, its impact on sustainability and management practices, the emergence and necessity of closing the loops, and the progress so far and limitations of the model. The role of product design in creating circular supply chains, and the variables associated with the challenges are explored in Chapter II. Based on these variables we analyze two case studies to check how our findings apply to two important product life cycle strategies. We also analyze the impact of these strategies on competitiveness and sustainability to demonstrate the business case for circular supply chains. This allows us to demonstrate important links between these variables to highlight overarching criteria to satisfy effective product design in Chapter III.