Sourcing and procurement of raw materials in a circular economy business model. Puti Sinansari*, Jaroslaw Korpysa
Institute of Management and Quality
Doctoral School of University of Szczecin
Cukrowa 6, Szczecin 71-004, Poland
Abstract
In order to address the environmental concerns, it is essential that we adopt a transformative approach towards a sustainable circular economy. This entails prioritizing resource efficiency, minimizing waste, and optimizing the length and utilization of material loops. Circular economy (CE) necessitates a cooperative effort among enterprises, with stakeholders playing a crucial role in the implementation of CE-based business models. One component of CE is material procurement, which involves prioritizing materials that utilize renewable energy during the production process. Conducting a life cycle assessment involves measuring the environmental impact of a product from the extraction of raw materials to its usage by consumers, with the aim of prolonging the product^s lifespan. Maximizing the efficiency of material substitution and process sector linking to avoid excessive usage of materials. The utilization of primary resources and recycled materials remains a quandary for enterprises, as each possess distinct merits and drawbacks, particularly in the context of the CE. Therefore, this study aims to analyze how the correlation between raw material variables and the company^s business mode with the concept of circular economy. Measurements were carried out quantitatively on 100 companies in Indonesia that have a circular economy vision in their business model. The results of this study are that the source and procurement of raw materials support the company^s efforts in implementing a circular economy, but this is still constrained in terms of finance, availability of resources and people^s purchasing power for products.
Keywords: Raw Material, Circular Economy, Business Model
