Building Exploitation Routines in the Circular Supply Chain to Obtain Radical Innovations

Abstract

The adaptation of the supply chain makes it an effective tool in the management of a circular economy, as it allows aspects of sustainability and regeneration to be incorporated into production. However, empirical evidence is still insufficient. In addition, the use of absorptive capacity theory provides a convenient context model that is adapted to the knowledge management required for the application of circularity principles. To study in depth the functioning of the circular supply chain, we use the dimension of exploitation of absorptive capacity, distinguishing between routines that allow adaptation to new production needs (technological knowledge) and new commercial needs (market knowledge). The empirical study was conducted on a sample of 9612 companies, divided into three levels of technology intensity manufacturing, from the PITEC panel using multivariate models. The results show that the operating routines associated with the use of production and logistics technologies developed in a circular fashion favor the development of new products. Similarly, a bidirectional knowledge flow is necessary. The first flow is toward the company with practices that allow a better understanding of the customer and their needs in the framework of the circular economy. The second flow would be toward customers, who need to be informed and educated through various marketing and communication activities to adapt their behavior to the principles of circularity.