Organic Compost Supply Chain Analysis: A TCE Perspective

With the growing attention to Circular Economy (CE), there is a need to develop a waste management strategy to coordinate waste and recycling infrastructure across regional South Australia. The transition into CE needs a clear understanding of appropriate input and output opportunities while aligning the whole supply chain for value creation from waste. The development of the organic recovery industry in South Australia is severely constrained by the lack of suitable processing plants, which are currently operating at their limit. Amidst the challenges of CE adoption, a supply chain for organic compost needs a thorough analysis for capacity expansion. Using transaction cost economics (TCE), this exploratory study investigated the contractual difficulties and logistical challenges of the proposed organic compost supply chain connecting regional organic waste sources with processors and organic compost users. Interviews of organic waste suppliers, processors, and users revealed that while processing appeared to be viable for organic compost, the cost of organising its supply chain might be prohibitively high. Building more processing plants might face supply chain and logistical challenges without support from multi-stakeholders. Practical implications of CE are drawn for the benefits of all