BSOM046 Managing operations and the supply chain
This paper is based on the discussion of circular economy. Circular economy is such a system that builds an overall healthy system at all levels. Through the circular economy, the economic picture in small, medium and global business becomes healthy and works effectively at all levels in a business unit (Stahel, 2016). To move to the circular economy does not mean reduction of the negative impact of economy, but to generate business, economic, social and environmental benefits. Circular economy is related to restoration, reuse and recycling of products. The major benefit of circular economy is that it protects the business, customers and suppliers. More value and output is derived from resources through the circulation process. This process builds loyalty and creates new customers. The employees are retained and many scope of innovation emerges in the business units. Finally, more return is achieved through this process. In this project, the example of the company ‘London Legacy Development Corporation’ has been taken to discuss the subject. This company was established in the year 2012. The company has its headquarter in London. In this chapter, it has been shown how the company utilizes circular economy in its business operation to create economic, social and environmental benefits. In this part of the paper, the reader can have an idea how business organizations are benefitted by the circulation economy and how economic, social and environmental benefits are achieved through this process.
Concepts and characteristics of the circular economy
Circular economy is a subject that has gained a great deal of popularity over the past few years in the business world. A circular economy is a process through which the money is regenerated with a new and more profitable value in a business organization through various recycling process. Sustainability in a business unit, social and environmental benefits are derived from circular economy. The following are the features of this circular economy:
Through the process of circular economy, materials are used and recycled in a continuous high value as far as possible (Gregsonet al., 2015). In this process, materials are not mixed and can be used only when necessary.
In this process,all energies are used efficiently and effectively without any compromise in the quality of products. Storage technology and energy generation are required for this process.
As human cultures and social consistency is necessary to maintain in both the business world and society, the organization reflects on its stakeholders. Through this process, the well-being of the human society is done.
Energy and materials are not available in infinite measure and hence, their use should be prudent so that the materials can contribute to the society and economy at the highest level. The choice of use to resources maximize the generation of value through as many categories as possible.
The main drivers of the circular economy,
There are many key drivers of the circular economy (Govindan, and Hasanagic, 2018). They are the following:
Firstly, efficiency is one of the key drivers of the circular economy. Where business models work successfully and efficiently, there will be a lasting and positive effect on the economy through a framework. Various service-oriented business models create economic benefits with return system and it is also helpful for customer retention. From the customer perspective, they produce transparency in the cost of products and help to produce lifelong products.
Secondly, financial models are the second elements that are the also the key drivers in circular economy. In the early stage of development, similar models of concepts of economy were used. Frequent problems have made the innovative start up difficult to gain in the capital market. The new green bond market has come up to support those earlier models in the economic market (Witjes and Lozano, 2016).
The technical innovation can also play the role of a crucial driver in the circular economy. The products should be of various designs, long-lived and recyclable. Through technical innovation, such live-lived, designed and recyclable products can be achieved to face the challenges of switching the entire economic system of a country. Design, products, waste management and others have to work together for such innovation. To gain repairable products, the users should have necessary skills (Wilts, 2017).
Significance of circular economy regarding business
Profitability is the main goal of every business organization. The circular economy provides benefits to all the business organizations from various aspects. The benefits are the following:
Innovations: Circular economy provides extra facilities for the business organization to fetch new ideas at the new business and thus, open new channels through innovation. Thus, a business organization can have better energy effectiveness, better technological use and better opportunities (Gurko, 2017).
Unemployment: In many countries, unemployment is a problem. As per the report of the study, circular economy can bring the job opportunities and thus, it will be positive aspect in future. The logistics can be developed and jobs can be created in small and medium sectors through the application of new technologies. The new technologies can be developed in the field of services. With the innovation of new services by new organizations, the market will be filled by the implementation of circular economy and jobs will be created.
Optimization of resources: Resource can be optimized through the use of circular economy by the circulation of materials and products through their highest usefulness. The business units should regenerate the systems for supporting the resource circulation in the economy.
Significance of circular economy regarding society
There are various social benefits of circular economy (Cullen, 2018, p.171). The benefits are the following:
Through the technological development, circular economy the logistics in small and medium sectors are developed and thus, scope for new jobs are created in the country benefitting the people of the country. Thus, the entire society is benefitted.
Waste management is maintained and the products are reused and recycled. Through recycling of products, the pollution in the environment is reduced and people can lead a healthy life.
With the innovation through circular economy, new products are developed in the market and people get chance to consume new and different types of products and services. The innovative products and services help the people of the country to lead a better and healthy life. The culture in the society is also developed for such new innovation of products and services. These all lead to the development of society.
The business units serves in the society through providing different types of products and services. As new products and services are innovated, the consumers’ tastes change and develop. This impacts on the consumers’ behaviour and lead to social development.
Significance of circular economy regarding environment
Apart from the economical and social benefits, circular economy generates some benefits for the environment. The environmental benefits are the following:
The circular economy generated possibilities for the improvement of the environment. The carbon -di-oxide emission is expected to be reduced by the circular economy by about 50% within the year 2050 in the entire Europe (Yuan et al., 2006, p.5). The greenhouse gas is expected to be reduced by about 5 million tonnes by circular economy. The consumption of primary materials like synthetic fertilizer, pesticides, water from agricultural land, fuels, and electricity can be reduced by about 35% within the year 2030 through circular economy. The organic waste through the use of circular economy, the soil can be regenerated and thus, the use of fertilizer can be reduced to a great extent. As the circular economy controls air pollution, water pollution, climatic change, soil erosion and some others, the households may reduce the cost by about 20% within the year 2030. Apart from the above points, innovations can come through new products and services, the natural resources can be utilized in advanced manner, and thus, the negative effects will be mitigated (Yong, 2007,p.125).
The role of circular supply chains in supporting restorative processes advocated by the circular economy
The supply chain process plays a key role to gain a competitive market. This process brings the products close to buyers and creates customer satisfaction. The supply chain process relates to the manufacturing, operations, transportation, purchase and the delivery of the products to the customers. In the following ways, the circular economy develops the supply chain procedures through restorative processes and thus, fetches progress in the business:
By following a good logistic system, the products can be produced, processed and transported to the customers in a methodological way,. Thus, the cost of the production reduces and the productivity increases through supply chain method.
Logistics is a critical process in any business unit. Products are moved from one place to other through the supply chain system in logistic department. At the time of this implementation, business organizations faces with various challenges and thus, innovative ways are discovered (Winans et al., 2017, p.830).
Application of concepts
Company background and why the company has been selected
In this chapter, the London Legacy Development Corporation has been taken as an example to explain its activities related to circular economy. It is a government body and is headquartered in London and is related to development activities in urban and suburban areas through its development activities. The company was established in the year 2012. The company has its own presence in the United Kingdom, India, Denmark, Australia and in some other countries in the World. The company has made many development works in the above and some other countries in the world. As the company has made many positive contributions in the above countriesthrough its development works, it has been selected in this chapter to cite as an example (Zelizer, 2017).
Company’s operations in terms of circular economy
The London Legacy Development Corporation has innovated its activities related to circular economy from time to time (Pauliuk,2018). The Corporation has approached with new innovative activities in Olympic structures and has regenerated the projects in the following ways:
The LLDC was created after the 2012 London games and the corporation was told to transform the Queen Elizabeth Olympic part into a new tourist attraction and also to regenerate the same as a most attractive part of London. In the year, 2012 the London Olympic games was very expensive one and in the past four years, the LLDC has converted the Olympic games into a profitable one. The Corporation has reconstructed thousands of new homes, has transformed the park into a new cultural destination, and has created new jobs. The neighbourhood around the Olympic area has been changed and has been more famous for its attraction. The Cloud systems were introduced and was the ultimate solution(Tackling the Olympic Legacy Challenge, 2018).
The main purpose of London Legacy Development Corporation is to regenerate and find new ways of getting returns from the London’s Olympic investment. The swimmer in London who saves his time each day or a cyclist who spends hours in a day, the LLDC is under fa pressure to do more with less effects through its innovation. The new transportation infrastructure rebuilt for the tourists are the isolated part of Rio. A new sports centres will be opened in the former Olympic buildings. This large gymnasium will be opened for the children and they will be allowed to play Olympic sports. The above all were the work of renovation of London Legacy Development Corporation.
How the company’s supply chain supports the business operations
The London Legacy Development Corporation has maintained a well-planned supply chain method for the benefit of its operations. The supply-chain policy of the company have been discussed under (Genovese et al., 2017, p. 350).
To match the supply with demand:There is a storage place not far from the Olympic park and this is a facility for the corporation from the aspect of transportation. All the assets are held in that park and they are reused The London Legacy Development Corporation has thus, matched the supply with demand (The EMIL GREINER Co., 1958).
Reuse in community:With the appropriate networks, it is very hard to reach the people and it is a challenging work. The London Legacy Development Corporation has developed the ways of communicating withthe local community through websites. The websites have links with various business channels, arts, culture and others and those groups have been supported by those channels. Thus, the entire business operations are supported by the supply-chain procedures of LLDC.
Collection of assets: As the corporation collects various assets, this work helps in the administrative work of the LLDC.
How the circular economy practices of the company provides the economic, social and environmental benefits
There are various economic, social and environmental benefits for the circular economy practices of London Legacy Development Corporation (Murray et al., 2017, p. 370). They are the following:
To conclude this paper, it can be mentioned that circular economy is such a process through which economic, social and environmental benefits have been derived with the help of recycling, reuse of products and then value of money is economically regenerated. Thus, through the circular economy, benefits from all aspects are derived. There are various types of processes through which circular economy is followed. To example here, the name of London Legacy Development Corporation has been cited here. It has beenhighlighted here how through circular economy, the organization is following its strategies of circular economy and how the economy, society and environment of London have been benefitted by the circular economy policies of LLDC.
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