Circular purchasing process

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More and more companies are working on sustainable solutions. In order to do so in a circular manner, closing loops and procuring appropriate circular solutions must become standard components of business operations.
However, the process of purchasing circular products is different from 'traditional' procurement processes. The main difference is that the meeting with suppliers and partners takes place at an earlier stage, often before a request for tender is issued. The starting point for a circular procurement process is an organisation's sustainability objectives. These objectives form the buyer's request to suppliers: “How does your solution ensure that our goal is achieved?”

What is circular procurement?

Circular procurement means that the facilities purchased to enable the company to function optimally are also used for circular applications. This is achieved by using different procurement criteria and different steps than in a 'traditional' procurement process.

The biggest difference is that a circular procurement process involves suppliers and partners at an earlier stage. By first asking for advice and doing research, you will be better able to determine what the possibilities are to achieve the circular objectives.

These insights will eventually be included in the request for tender - you search for parties that can best achieve your ambitions and objectives.

From product to solution

During the procurement process, it is important to keep in mind why you are buying something. What are the expectations and what is the goal? By focusing on a solution and not a specific product, you create new possibilities to add circularity. A circular solution is not always a physical product - it can also be a specific service.

How do you assess a circular solution?

In a traditional procurement process, the cost price is often the focus. This is not surprising when you consider that purchasers often have to focus on reducing costs. In the case of circular procurement, however, things are different. Solutions may be more expensive upon purchase, but can save you money in the long run. But how do you assess whether a circular solution is of value to your organisation?

The journey of the product

After shelf life, the origin and destination are important in the journey of a product. Important questions are: ‘Where do the raw materials come from?' and 'When it becomes waste for me, for whom will it become a raw material?'

From raw material to finished product

If you are able to convert waste streams into raw materials for new products, check how this production process is designed.

After use

Where does waste go once it becomes waste for you? And what monetary value does this have when it comes to your company’s image? Certain components can potentially be reused in other applications. If you don't think about it in advance, a product is more likely to end up as residual waste after use.

Can one of your product categories be used as a raw material for another?

Can your waste be converted into raw material? And can you, as an organisation, make use of the products that are made from it? Cardboard cups are a good example - these are used for the production of toilet and towel paper.

Circular collaboration

Numerous internal and external parties are often needed in order to arrive at a circular solution. Involve your colleagues, buyers and contract managers when talking to your suppliers. There is often ample flexibility within ongoing contracts.

Apply circularity in the organisation

Just as the circular economy differs from the linear economy, so too does the procurement process differ from circular solutions with a traditional procurement process. Whereas traditional procurement focuses primarily on physical products and cost reduction, the procurement of circular solutions is mainly focused on finding the right solution to achieve the set sustainability objectives.

But how do you set up a circular procurement process? We created this guide to help buyers understand circularity and how to find the best circular solutions for their organisation.

Circular

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