Supply network collaborations in a circular economy: A case study of Swedish steel recycling

Abstract

Supply network collaboration has been recognised as a vital enabler in the transition to a circular economy. Even so, the existing literature has directed limited attention to the nature of these relationships and the motivation behind them. Hence, there is a need to understand the actual activities of actors engaged in collaboration to address this knowledge gap. The steel industry presents an interesting example. Given that more than one-third of the world's steel production originates from scrap, its supply is essential to the survival of the steel industry. Based on an explorative case study, this paper investigates collaboration of steel producers, a procurement intermediary and scrap dealers to facilitate steel recycling. These actors deal with the practical challenge of variation in the quantity and quality of steel scrap by engaging in various types of collaboration. This paper seeks to analyse the nature of these collaborations and answer the question of why actors engage in supply network collaboration. The paper identifies a complex web of relationships and outlines differing motives for and against collaboration, with specific focus on three types. While quality control is the main motive in dyadic vertical collaboration between a buyer and a supplier, efficiency is the main motive for both horizontal collaboration between buyers and lateral collaboration amongst all actors in the supply network. Thus, this paper adds to the conventional wisdom of sequential, dyadic, linear and vertical relationships, providing a deeper understanding of the types of supply network collaboration from the underexplored context of steel recycling.