Circular economy supply network management: A complex adaptive system

Abstract

The circular economy is gaining momentum in political and academic agendas. However, little is empirically known about circular economy supply network configurations, dynamics and coordination mechanisms. In aiming to fill this theoretical and practical gap, this study employs a multiple case study of seven circular supply networks from different industries using coding, within- and cross-case analysis. As the study's main theoretical contribution, an innovative framework is proposed, characterizing circular economy supply network management as a complex adaptive system leading to three different configurations: a closed loop supply network, an open loop supply network and a combination of both, adding new industries' supply chains and nonlinear connections and resulting in a hybrid loop supply network. This framework is composed of three key elements, management mechanisms, the internal and external environment, and emergent properties, and three sets of propositions, which relate each of these key elements to different circular economy supply network management configurations that dynamically adapt to internal and external environment changes. The framework also introduces two types of leverage points, one upstream and another downstream, in that agents with different roles and positions might be responsible for coordinating or initiating the postconsumption product or byproduct physical reverse flow, merging sourcing and customer strategy. Managers and policy-makers could benefit from this framework, as it could help them make decisions on how to foster circular economy implementation, even amid lacking government incentives and regulation complexity.