Master Thesis - Executive Summary:

In the past, academia and managers focused on managing flows of goods that run from producer to the final customer. Nowadays attention is raised for goods flowing in the opposite direction. This partly happens because of a growing concern for the environment and the preservation of the world we live in. Consequently, companies need a viable business model that marries good business sense with environmental sustainability and that allows companies to realize value out of returned products (Guide, Harrison & Wassenhove 2003). However, often industry and nature are seen as two opposing concepts. Cradle to Cradle is the solution to this issue, as founded by McDonough and Braungart (2002) and states that, when designers employ the intelligence of natural systems — the effectiveness of nutrient cycling and the abundance of the sun's energy — they can create products, industrial systems, buildings, even regional plans that allow nature and commerce to fruitfully co-exist. This is opposed to the Cradle to Grave model around which most operations are currently organized. Current ways of recycling do not solve the Cradle to Grave problem because in the end products still end their life as waste. Practices of downcycling are only slowing down the process of depletion of natural resources and come with their own problems like quality issues because material quality decreases with recycling.
This loss of value is a result of:
1. a lack of the reusability of materials, and
2. a lack of adequate systems to retrieve them (McDonough, Braungart 2002b)
Closed-loop supply chain management plays a crucial role within this holistic view and aims to deal with the second point mentioned; adequate systems to retrieve valuable products. By renewing the way of making and, more important, designing products and materials, the lack of reusability of materials can be removed. The two concepts central to this research, closed-loop supply chain management and Cradle to Cradle, should in an ideal situation be optimally integrated. The question is whether this holds true and if this is feasible in practical situations.

Accordingly, the general research question is:
To what extent is Closed-Loop Supply Chain Management integrated with the Cradle to Cradle concept?

Given limited research in this area the research conducted is classified as exploratory.
By analyzing cases on closed-loop supply chain management in theory and subsequently investigating the bottlenecks that companies, implementing Cradle to Cradle, face in practice, it is verified if the two concepts are optimally integrated.
This research takes a holistic view on closed-loop supply chain management and shows that a strategic rethink on business is needed to include the design phase of a product in thinking about environmental and healthy operations, rather than using it as an afterthought.

In the first part of this research, the basic criteria for a real Cradle to Cradle solution in practice are described and these are subsequently applied to several cases concerning closed-loop supply chain management. Hereby the aim is to check whether companies that involve in closed-loop supply chain management are heading in the right direction when it comes to complete Cradle to Cradle solutions. The second part takes a more practical perspective and is based on interviews with several companies that are currently applying, or aiming to apply, Cradle to Cradle in practice. The aim of this part of the research is to enrich the findings from the first, theoretical, part and to obtain advises and useful information from current practices, thereby adding value to the findings of the theoretical framework in part one. Investigated companies include Herman Miller, Ahrend, Desso and InterfaceFLOR. The latter does not associate itself with the Cradle to Cradle concept but is very much involved with sustainability and closing the supply chain loop.

The analysis of cases found in literature shows that in most occasions the quality of materials cannot be maintained in the recovery process simply because products are not designed to be recycled and Cradle to Cradle is not integrated in the company’s strategy and mission. What is also concluded is that even if important Cradle to Cradle criteria, like design for recycling, substitution of hazardous materials and chemicals that stay in the closed technosphere are met, it is still a challenging task to actually get all potential nutrients returned for recovery. Although it is often technically feasible to close the loop, this does constitute the main bottleneck in creating a cyclical system in which valuable nutrients are constantly reused. The success of take back programs remains very much customer dependent; unwillingness to cooperate or a lack of awareness among customers, often results in low return rates. In addition, this makes it hard to make a closed loop system profitable and furthermore often results in practices of downcycling. Also suppliers and intermediate companies in the chain need to be committed to the sustainability goals in order to make implementation a success.
In order to solve these issues, an integrated supply chain perspective is necessary in which all stages of the chain are seen as interrelated. This requires supply chain collaboration between all players in the chain which will ensure proper alignment of incentives.
The findings in this research show that closed-loop supply chain management and Cradle to Cradle in practice are not properly integrated, yet. A company that aims for successful implementation of Cradle to Cradle and/or closed-loop supply chain management needs to ensure that this is reflected upon in its companywide strategy and vision and that this is embedded throughout the whole organization and the entire supply chain. This requires open discussions, information sharing, and intensive relations with all chain partners.

The author declares that the text and work presented in this master thesis is original and that no sources other than those mentioned in the text and its references have been used in creating the Master thesis.
The copyright of the Master thesis rests with the author (jolienypma@gmail.com)