Public procurement of resource-efficient, circular, and sustainable solutions: challenges and findings.
May 17, 2021 at 1.00-3.00 pm
Virtual workshop. Registration required.
Margo Enthoven, Stockholm School of Economics
Sarah Jack, Stockholm School of Economics
Eleonor Kristoffersson, University of Örebro
Jan Kellgren, University of Linköping
Herbert Jacobson, University of Linköping
Mattias Lindahl, University of Linköping
This interactive workshop offers the opportunity to further your knowledge about how the circular economy might be integrated into procurement projects. There is a view that procurement needs to move away from its traditional approach of buying products, and embrace more sustainable, resource efficient and innovative ways of doing business. Procurement, when done right, is a tool for innovation, sustainability and circularity. Especially functional procurement is promising, because it presents a more resource efficient and sustainable way to procure by shifting the focus from procuring products to procuring functions. Functional procurement can help organizations to include the circular economy into their way of working and to buying circular solutions that are more resource-efficient and less polluting.
Society faces the key challenges of climate change, resource restraints and ecosystem deterioration. The circular economy proposes new ways of organizing to address these issues, for instance by reducing the amount of resource used, by giving products a longer life, and by improving efficiency of resources. The key idea behind the circular economy is the idea of a loop, in which products are never thrown away, but always provide new value as resources or inputs into the economy. In the circular economy, raw material use, waste, and energy leakage are minimized. Circular procurement therefore focuses on long-lasting design, maintenance, reuse, recycling, refurbishing and remanufacturing.
Functional procurement is a game changer for the circular economy, because it helps organizations to shift from buying products with a short lifetime, to buying the functions they really need instead. It helps procurers to focus on what they really need, while putting the incentive to be more efficient at the supplier. For instance, a function can refer to ‘transportation from A to B’ instead of ‘a car’, which is based on a specific product. By buying ‘transportation’ instead of ‘a car’, it is up to the supplier to offer the most efficient mode of transportation. This shifts the supplier’s focus from selling as many cars as possible, to making sure that a car lasts as long as possible, can be easily repaired and has the lowest fuel costs possible. Because of this shift of focus from the procurer to the supplier, functional procurement can radically reduce emissions and the amount of material used.
While promising, functional procurement is also challenging. Procurers struggle to make the change to functional procurement, and suppliers struggle to change their business models. On 17 May, the University of Örebro, University of Linköping and Stockholm School of Economics are hosting an interactive workshop on functional procurement and the circular economy. This interactive workshop centers around the struggles of functional procurement and aims to answer questions of circularity, innovation, and strategy. In this workshop we will map key challenges of circular public procurement and engage in process redesign practice, based on four topics: 1) structure and culture of the public organization, 2) business models and business structure, 3) public-private communication and collaboration, and 4) legal challenges and interpretation of the legal system.
This workshop first provides a background on the circular economy, circular business models and circular procurement. After this, we will enter discussion groups on different topics, starting from the challenges of functional procurement. We will close with findings and take-aways about functional procurement and circularity.