Circular procurement
What is circular procurement
Circular procurement is the consideration of a product from design stage through to disposal. Often in procurement, our concerns are focused on sourcing new products to meet customer demands, however, there’s not always visibility to what happens to the product once it reaches its ends of life stage.
The main priorities of circular procurement are:
- Product longevity
- Sustainability of materials and resources
- Reduction of waste
- Restoration of products
- Optimising value and life cycle costs
There are three elements of procurement that you would need to change and focus on to promote the circular motion and they are:
- Focus on service instead of products:
Think about whether you can rent or lease through product service systems. This will give the manufacturer greater control and boost their interest in providing a product that lasts. - Focus on the product’s design and end of life:
There are three models that can manage the end of life of a product these are, buy-sell back, buy-re-sell and products service systems. It’s important to note that the products need to be designed in a reusable and recyclable way for these models to work. - Focus on market dialogue:
Circular procurement demands greater transparency to learn and benefit from each other. The dialogue should be extended to cover suppliers, recycle operators, products, designs and more.
Circular procurement models
There are many ways to apply a more circular solution to your procurement process. However, it does depend on the conditions and options that are available within the supply chain. Take a look at the three procurement models below, which can be used interchangeably and will help make your procurement more circular.
- System level:
This can include supplier take-back systems, rent/lead, cooperation with other organisations on sharing and reusing, public private partnerships and product service systems - Supplier level:
This includes internal reuse of products, buy, and sell, reparability of standard products, design to disassembly, supplier take-back systems - Product level:
This includes recycled materials, resource efficiency, recyclable materials, products can be disassembled after use, materials in the product can be identified
Benefits of circular procurement
Circular procurement will help to bring both short and long-term benefits to your organisation. Some of the benefits are:
- Reduces costs in the short and long term
- Lifts some of the burden from your organisation
- Counters the depletion of scarce raw materials and environmental problems
- Greater transparency in the supply chain
- Your organisation becomes future proof. This is due to lower costs and greater security of supply
- More robust supply chain
- Enhances your reputation and gives your brand greater distinction in the market
- Helps to modernise your business models
- Frequency of buying will be lowered due to the extended life of products
How to apply sustainable procurement
We share some hints and tips about applying sustainable procurement within your organisation.
Find out more about How To Apply Sustainable Procurement
Sustainability key themes
Listen on demand and get the latest practical insights from our panel of procurement and supply experts.
Become a CIPS member
Achieve your potential by becoming a member today. Whether you want to become a studying member or want to upgrade your membership to MCIPS, you’ll receive support and guidance whatever career level you’re at.