Collaboration In Circular Supply Chains

Purpose:
To achieve business goals, the companies create business relationships with multiple business partners and they participate in multiple supply chains (Soosay and Hyland, 2015). Naturally, there is a variety of collaboration levels between a company and its suppliers and customers or other businesses (Ralston, Richey and Grawe, 2017). That is especially true in circular supply chains, which consists not only of forward and reverse flows, but also flows to alternative supply chains. Consideration of these flows is important as they 1) impact use of resources and costs in supply chains, and 2) impact environmental performances by increasing waste and pollution.
Circular flows can be created via suppliers or customers, within the same sector or they can span different sectors (i.e. cross-sector flows), (Weetman, 2017). Thus, both, vertical and horizontal collaboration along the supply chain has a potential to create efficient and environmentally effective logistics activities (Chen et al., 2017; Soysal et al., 2018), and consequently circular flows.
Though collaboration is one of the key pillars of the circular economy and circular supply chains (Batista et al., 2018), only studies on industrial-eco parks provide a glimpse on collaboration between supply chain members. Yet, most of the supply chains are located outside eco-industrial parks, and it is a surprisingly small number of papers that tackle the question: what types of collaboration result in the successful creation of circular supply chains? In other words, what types of collaborative relationships enable increased resource reduction and value recovery?
Research Approach:
To answer this question, we reviewed the literature on collaboration in the supply chains, with a special focus on reverse logistics, as well as collaboration in the context of the circular economy. In particular, we explored literature related to 1) horizontal as well as vertical collaboration, and 2) collaboration in relation to value added and value recovery activities in circular flows.
Agri-food industry is characterized by an extensive use of natural resources and its production and logistics activities result in the considerable environmental impact (Grekova et al., 2016). However, as Ellen MacArthur Foundation estimates that consumption of primary material in EU can be reduced 32% by 2030 and 53% by 2050 in the food industry (Ellen MacArthur Foundation, 2015), there is a significant potential for resource reduction and value recovery. Thus, we empirically investigate types of collaborative relationships on the case study of a food processor.
Findings and Originality:
Main founds of our study are: 1) Literature survey shows that despite a wide body of literature on collaboration, collaboration in the context of the reverse logistics and circular supply chains is in infancy; 2) there are country related specificities of agri-food industry with regards to collaboration; and 3) in circular supply chains collaboration occurs for both, resource reduction and value recovery activities – however, due to characteristics of material flows, there is a difference in collaboration types and intensity.
Research Impact:
Considering the emerging perspective of circular flows in the literature, our findings contribute to theory building on circular supply chains. Moreover, as our study considers the agri-food sector specifically, we contribute also to the knowledge on collaboration in the context of the agri-food supply chains and circular economy.
Practical Impact:
Our approach to studying collaborative practices that contribute to creation or improvement of circular flows in supply chains represent a systematic and comprehensive analysis of opportunities for a company to manage its resources and environmental impact in a more sustainable way.