Transition towards circular economy through a multi-readiness level model : An explorative study in the construction equipment industry

University essay from Mälardalens högskola/Akademin för innovation, design och teknik

Abstract: Circular economy is considered one of the most viable approaches to sustainability and it has gained a lot of traction in recent years. It challenges the linear approach to production and consumption that generates waste and is unsustainable for the planet and future generations. It is crucial to counteract the negative impacts of production on the environment by implementing new and effective business strategies that are compatible with circular economy. Nowadays, manufacturing industries are struggling to make the transition towards circularity because of the intrinsic complexity of adapting new business models, product development, production processes and supply chain management to a non-linear approach. The literature on the transition towards circular economy extensively covers the aspects connected to either one of the above-mentioned domain-specific areas, developing different tools such as roadmaps and frameworks to support companies in the transition for a specific area. Yet, there is a lack of a systematic tool that can give support in each stage of the process based on the different business areas that need to be adapted to circularity. The purpose of this study is to explore the existing state-of-the-art knowledge with a systematic and holistic approach to factors that are connected to circular economy, so to create a practical tool for facilitating the process of transitioning towards circularity in a step- by-step manner, in connection to activities and strategies that can be implemented in different business domains. An explorative case study in a manufacturing company in the construction equipment industry was carried out, with a twofold purpose: firstly, to gather, analyse and frame the existing state-of-the-art knowledge on the implementation of circular economy. Secondly, to explore the suggested multi readiness level model with the case study company in order to validate it. In order to do so, a set of ten semi-structured interviews with senior managers and experts in the field was carried out to gather valuable insights and practical knowledge. The outcome of this study is a multi-readiness level model for transitioning towards circular economy that explores the most important strategies and activities that should be implemented by a manufacturing company in four different areas of intervention, namely Ecosystem of External Partners, Customer and Business model, Company’s Culture and Internal Capabilities and Design and Product Development. Each area of intervention will be presented in connection to identified strategies and activities that must be implemented to reach circularity.

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