Understanding barriers to circular economy: cases from the manufacturing industry

Abstract

Purpose

Most companies include a commitment for sustainable growth involving a switch towards the circular economy (CE) model. The purpose of this paper is to present barriers to CE adoption identified by a literature review. The paper also addresses the particular challenges faced by manufacturers by answering the research question: What are the dominant barriers faced by the manufacturing industry in moving towards a CE?

Design/methodology/approach

This paper presents a literature review of research identifying barriers for adopting to CE in the manufacturing sector. The literature review is followed by a case study identifying barriers to CE as seen by ten companies within manufacturing, including the GS1 global information standardisation agency used by all manufacturers.

Findings

The manufacturers investigated focus mostly on recycling and waste reduction. These policies have low or very low CE effect. High CE effect policies like maintenance and reuse targeting the CE ideal of no waste, are nearly non-existent. The results identified seven main barriers to the CE: (1) high start-up costs, (2) complex supply chains, (3) challenging business-to-business (B2B) cooperation, (4) lack of information on product design and production, (5) lack of technical skills, (6) quality compromise and (7) disassembly of products is time-consuming and expensive.

Research limitations/implications

The data come from participants in a single country, Norway, although the manufacturers are multinational companies adhering to enterprise policies.

Practical implications

This research shows that all the companies interviewed are well aware of the growing need for their company to move towards more sustainable operations involving CE concepts. The barriers identified are explored, and the findings could guide such companies in their efforts to move to maintenance, reuse, remanufacture and recycle (M+3R) operational model.

Social implications

The study has found that the major barriers for implementation of CE are quality issues in recycled materials, supply chain complexities, coordination problems between companies, design and production of the product, disassembly of products and high start-up/ investment costs.

Originality/value

The research shows how the transition towards a CE takes place in manufacturing industries by studying the manufacturing sector.

Citation

Jaeger, B. and Upadhyay, A. (2020), "Understanding barriers to circular economy: cases from the manufacturing industry", Journal of Enterprise Information Management, Vol. 33 No. 4, pp. 729-745. https://doi.org/10.1108/JEIM-02-2019-0047