Understanding circular economy implementation in the agri-food supply chain: the case of an Indonesian organic fertiliser producer

Abstract

Abstract Background One of the most important issues in the agri-food industry and its supply chain is the existence of by-products, treated as wastes and discarded immediately to waste disposal. This treatment might lead to loss of possibility in gaining economic value from them. Implementation of a circular economy could prevent the economic value loss, since the circular economy utilises said wastes as resources for other processes. However, the enforcement has obstacles and a lack of explanation in the literature, particularly in the case of an organic fertiliser producer. Results and conclusions This research develops a conceptual model of an organic fertiliser producer through the soft systems methodology approach. The results shed light on the ongoing literature by identifying the overall system and relevant components. Further, this study highlights several issues, the most important of which is the lack of interaction between the company and the farmers, which decrease the farmers’ desire to purchase the organic fertiliser. For better implementation of circular economy in this particular supply chain, it is suggested that the company establish better communication with their customers, the farmers, especially to gain better understanding of their wants and needs.