4.4 Case Beta 63
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4.4.3 Challenges for the Implementation
The organization began its transformation towards circular economy ten years ago
during which time it has identified two main challenges of implementing the concept.
The first challenge is finding suppliers who are willing to invest the time andmoney in the development of required substitutes. Developing an environmentally
safe product which is biodegradable and not harmful to the health of the customer
requires new chemicals for dyes, yarns etc.. At present there are no substitutes
available and therefore research and development are highly necessary. As they
consume both time and money it is difficult for the organization to find reliable
suppliers who are willing to provide these resources. Low production volumes make
the manufacturing process expensive and therefore unattractive to most suppliers,
as the interviewee explained: “It took some time to find suppliers who were willing
to cooperate on this issue. Many suppliers weren’t willing due to low production
volumes” (see Appendix: German Quote 3).
The second challenge which the organization is facing is technological limita-tions. Currently, only very basic apparel can be produced due to the requirement
of biodegradability. Hence, features such as zippers, glitter print, special buttons
cannot be added to the product. The very basic look of the product means that it
only attracts a small group of customers. In order to increase the group of custom-
ers attracted to the product, technological innovations are necessary to enable the
organization to satisfy customer requirements. The interviewee stated that, “We
are currently not able to use zippers, glitter or other effects (...) there is definitely a
lot of development necessary” (see Appendix: German Quote 4).
4.4.4 Economic Impacts
The company identified higher costs due to required double production as an
economic impact of engaging in circular economy. The interviewee views the
situation as follows: “We are not interested in increasing our commitment because
currently we have double effort. Due to increased prices, it is necessary to have both
cradle-to-cradle certified and conventional products in our portfolio” (see Appendix:
German Quote 5). The price of circular products is higher than conventional ones
and therefore attracts a limited number of customers. Hence, the organization is
producing pieces from the circular product line as conventional products. This al-
lows the organization to offer these products at a cheaper price and ensures it meets
customer’s demands. However, the double production involved creates additional
effort for the organization and results in higher production costs.