How the circular economy can reduce manufacturing waste

Researchers at Monash University have found that manufacturing businesses that adopt circular economy strategies and practices could reduce manufacturing waste by 65 per cent.

Australia’s manufacturing sector contributes significantly to national waste generation, producing nearly 13 million tonnes of waste per year. In Victoria, the manufacturing sector generates an average of 4,350 kilograms of waste per full-time-equivalent employee annually – making up approximately 39 per cent of the state’s total waste.

What goes around

Monash Business School’s Department of Management has been working with industry to develop strategies to implement circular economy principles and practices, minimise waste and enhance resource efficiency.

Primary Chief Investigator Professor Amrik Sohal from the Department of Management at Monash led a three-year project that involved manufacturers in plastics, textiles, general engineering and food. The researchers interviewed 25 leading circular economy businesses to learn about the most successful practices and then developed workshops and seminars for the manufacturing industry.

Waste not, want not

One example of a company that was interviewed is Jardan, a family-owned high-end furniture business. The business strives to make products sustainable throughout the entire lifecycle and has reduced its manufacturing waste by 65 per cent. The retailer sources over 75 per cent of its materials from Australian suppliers, designs products for longevity, and has reduced energy consumption by 17 per cent.

Sohal says circular economy principles focus on optimising resource use, grounded in the belief that the economic system already possesses sufficient resources.

“By enhancing resource efficiency, the goal is to decouple the economic system from resource extraction and waste generation, while extending the lifespan of resources to their maximum potential,” he says.

Looking ahead

Based on the study, the research suggests the following practices can help organisations incorporate circular economy principles into their business:

• Build circularity into the design of the product, including using alternative/recycled materials 
• Take a “systems” approach and build circularity into the whole supply chain
• Ensure the financial viability of the business model 
• Be transparent about circular economy practices
• Help people understand the value of what they are contributing to 
• Create networks of like-minded communities by collaborating with others and sharing best-practice knowledge.