# A Multiple Case Study on Collaboration for a Circular Economy: A Focus on the Italian Textile Supply Chain

Beatrice Colombo, Albachiara Boffelli, Paolo Gaiardelli, Matteo Kalchschmidt, Alice Madonna, Tommaso Sangalli

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Beatrice Colombo, Albachiara Boffelli, Paolo Gaiardelli, Matteo Kalchschmidt, Alice Madonna, et al. A Multiple Case Study on Collaboration for a Circular Economy: A Focus on the Italian Textile Supply Chain. IFIP International Conference on Advances in Production Management Systems (APMS), Sep 2022, Gyeongju, South Korea. pp.408-415, 10.1007/978-3-031-16407-1_48. hal-05386102

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# A Multiple Case Study on Collaboration for a Circular Economy: A Focus on the Italian Textile Supply Chain

Beatrice Colombo<fnref n="1" />,<fnref n="2" />✉, Albachiara Boffelli<fnref n="1" />✉, Paolo Gaiardelli<fnref n="1" />✉, Matteo Kalchschmidt<fnref n="1" />✉, Alice Madonna<fnref n="1" />✉, and Tommaso Sangalli<fnref n="1" />

**Abstract.** The establishment of valuable collaborations among supply chain partners is essential for the success of a circular economy. However, there are still many doubts about the most helpful collaboration practices that could support sustainable development. The analysis deals with deepening links between the circular economy and supply chain collaborations that could favor its development. Specifically, the study focuses on recognizing the most diffused collaboration practices among the actors that successfully implemented circular systems. A multiple case study from the Italian textile industry is the methodology chosen to carry out the research. The analysis of five selected companies confirms the creation of valuable collaborations is essential to successfully implement circular practices, highlighting that a holistic approach is needed to establish this new economic paradigm effectively.

**Keywords:** Circular economy · Supply chain collaboration · Multiple case study

## 1 Introduction

The textile industry poses one of the biggest environmental challenges, as its overproduction and overconsumption are incredibly impactful in terms of water consumption, use of chemicals, greenhouse gas emissions, land use, and waste production [1, 2]. This system is not sustainable anymore and needs substantial restructuring. Organizations need to address these issues considering environmental and social concerns, whose importance should be equivalent to the economic performance of the business [3]. One feasible solution to improve the situation and reduce the damaging impact of the current system on the environment without shadowing economic viability is the Circular Economy

<footnote n="1">¹ Department of Management, Information and Production Engineering, University of Bergamo, Via Pasubio 7/B, 24044 Dalmine, BG, Italy</footnote>

<footnote>{beatrice.colombo, albachiara.boffelli, paolo.gaiardelli, matteo.kalchschmidt,alice.madonna}@unibg.it,
t.sangalli@studenti.unibg.it</footnote>

<footnote n="2">² ENEA – Italian National Agency for New Technologies, Energy and Sustainable Economic Development, Division for Sustainable Materials, Brindisi Research Centre, SS7 Appia Km 706,00, 72100 Brindisi, BR, Italy</footnote>
(CE). Circular business models would reduce the need for primary resources as input and waste production as output [4]; consequently, there would be a relief in the environmental impact of resource extraction, production, and disposal [2]. Nonetheless, the industry's structure does not facilitate such business models as these extensively rely on the cooperation between the different actors. Being these actors particularly numerous and geographically dispersed, there is a noteworthy barrier to the development of CE. Several authors have identified the main collaboration practices that should be developed in the supply chain (SC) to achieve satisfying performance levels; thus, it has been sought to understand the value and effectiveness thereof in the CE context.

This work aims to expand the knowledge around SC collaboration's role in developing successful CE practices, focusing on the textile industry, one of the world's most polluting sectors [2]. This objective has been pursued by attempting to answer the following research question:

> "What are the collaboration practices along the SC that foster the successful implementation of CE in the textile industry?"

The present work contributes to the extant literature by proposing insights from five Italian textile companies. This empirical approach differs from what is available in the scientific literature. Indeed, to the best of authors' knowledge, there is scant work and mainly of a conceptual nature about SC collaboration to foster the CE.

The case studies confirm that solid collaborative practices are needed to establish an effective CE business model. Finally, these practices are prioritized, differentiating between primary and subordinate ones.

The work is structured as follows: Sect. 2 reviews the literature on the related concepts, Sect. 3 explains the methodology according to which the case studies have been performed, Sects. 4 and 5 respectively outline the results and critically discuss them against the notions already available in the literature, and finally, Sect. 6 concludes the work by examining its contributions and limitations.

# 2 Related Literature

## 2.1 Circular Economy

The most comprehensive definition for CE is the one provided by the Ellen MacArthur Foundation, which refers to it as "an industrial system that is restorative or regenerative by intention and design. It replaces the 'end-of-life' concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impairs reuse, and aims for the elimination of waste through the superior design of materials, products, systems and, within this, business models" [1]. This description highlights the main features of CE, namely the importance of a regenerative design, the elimination of the concept of waste, and the use of more sustainable resources, generating as few harmful effects as possible for the environment. These objectives align with those proposed by [5] within the 9R framework that summarizes the ten principles of CE: Refuse (R0), Rethink (R1), Reduce (R2), Reuse (R3), Repair (R4), Refurbish (R5), Remanufacture (R6), Repurpose (R7), Recycle (R8), Recover (R9).
## 2.2 Collaboration Practices Along the Supply Chain

Different actors along the SC carry out various phases, and thus different stages could have objectives that conflict with each other. For this reason, each member could have only a local consideration of its activities and lose its interdependencies to partners' operations, resulting in a lower amount of total benefit for the whole SC [6]. To overcome these problems, [6] identified seven practices that can help improve the collaboration among SC members and, consequently, create sustainable advantages for the value chain, facilitating the development of a collaborative culture inside the business [7]. These seven practices are defined as follows:

1. Information sharing: ideas, plans, procedures, and strategies that a company shares with supply chain members with openness and honesty.

2. Goal congruence: compatibility between partners' objectives and overall supply chain objectives.

3. Decision synchronization: the extent to which partners make decisions by mutual agreement to benefit the entire supply chain.

4. Incentive alignment: shared risks, costs, and gains among supply chain actors by enhancing motivations to act consistently towards common goals.

5. Resource sharing: mutual exchanges and uses of partners' capabilities and assets (e.g., time, capital, know-how, experience, technologies, assets).

6. Collaborative communication: interactions among supply chain members in terms of information flow direction, frequency, mode, and influence potential.

7. Joint knowledge creation: the extent to which supply chain members jointly work to improve the awareness of consumers' needs and recognize the competitive environment characteristics and commit themselves to find solutions to adapt to the identified market conditions.

## 3 Methodology

Qualitative case study is suitable and necessary when theory does not exist, or it is unlikely to apply, when theory exists, but the context considered is different from a more traditional one, or when cause and effect are not well defined [8]. There are various types of qualitative studies. The one applied with the highest frequency regarding CE implementation in the textile context is the single case study [9]. Nevertheless, this approach could present some limitations regarding the conclusions' generalizability [10]. Therefore, multiple case studies approach has been identified as the most suitable methodology to ensure a reasonable level of external validity and reduce the risk of relying on biased information [10]. To obtain an exhaustive overview of CE implementation and the enabling role of SC partnerships for its success in the Italian textile industry, five cases (Table 1) were selected through a purposive sampling technique [8]. The research focused on four start-ups that have been recently founded and on an incumbent actor engaged in the textile sector over the last 150 years. This diversity in size among the analyzed companies should increase the generalizability of the research findings. Primary sources of information about the cases are interviews that lasted, on average, 60 min. Each interview was recorded and then transcribed for accuracy. All the respondents
are co-founders or managers. This aspect was essential to gain insightful and comprehensive notions about the development process of circular SC. All the interviews were semi-structured, and were based on a defined case study protocol sent to the respondents in advance to allow a consistent comparison between the different answers and improve the reliability of the analysis [8]. Questions were open-ended to permit interviewees to freely discuss their experiences and explore some of the considered issues. Data gained from the interviews were triangulated with multiple secondary sources to contextualize and validate the findings [11]. Lastly, data analysis was structured in two distinct phases: the within-case and the cross-case analysis. The results of the cross-case analysis are presented in the next section.

<table><caption>**Table 1.** Overview of the five cases selected for the investigation.</caption><thead><tr><td>Company</td><td>Year of foundation</td><td>Type of company</td><td>Role of respondent</td></tr></thead><tbody><tr><td>A</td><td>2017</td><td>Start-up</td><td>Co-founder</td></tr><tr><td>B</td><td>2018</td><td>Start-up</td><td>Co-founder</td></tr><tr><td>C</td><td>2020</td><td>Start-up</td><td>Co-founder</td></tr><tr><td>D</td><td>2020</td><td>Start-up</td><td>Co-founder</td></tr><tr><td>E</td><td>1876</td><td>Incumbent</td><td>Manager</td></tr></tbody></table>

## 4 Main Results

All the companies have confirmed the basic notion found in the literature that it is almost impossible to implement circular projects in a completely autonomous way. Indeed, none of the analyzed companies has developed CE solutions without the establishment of functional collaborations with their suppliers. A sentence from Company A's founder conveys this concept: "*What I can say with a high degree of certainty is that it is impossible to create circular systems without the proper development of a set of partnerships, establishing dynamics of a symbiotic economy and creating win-win relationships. [...] It is essential moving from SCs that work individually to SCs that work together circularly*". Furthermore, the findings outlined that it is also essential to expand the collaborations to actors from different fields, such as universities, non-governmental organizations, and customers or organizations that are not primarily engaged in the industrial field, to effectively obtain the variety of resources and competences needed to manage CE systems.

The results of the cross-case analysis are reported in Table 2. Information sharing and resource sharing are the practices that characterize the collaborations of all the five selected companies. Collaborative communication is found in all cases too. However, as this last practice is strongly related to information sharing, it was expected to be encountered in the same number of cases. Therefore, it can be claimed that the collaboration practices identified in the literature are essential for the successful development
of CE systems. In particular, information sharing and resource sharing seem to play a primary role, especially when sectors that previously had no contact points start to create synergies for implementing sustainable solutions. The other collaboration practices identified by [6], namely decision synchronization, incentive alignment, collaborative communication, and joint knowledge creation, are still crucial for actors operating in the CE field, even though they were less frequently mentioned during the interviews.

<table><caption>**Table 2.** Collaboration practices discussed during the interviews.</caption><thead><tr><th rowspan="2">Practice</th><th colspan="5">Company</th></tr><tr><th>A</th><th>B</th><th>C</th><th>D</th><th>E</th></tr></thead><tbody><tr><td>Information sharing</td><td>✓</td><td>✓</td><td>✓</td><td>✓</td><td>✓</td></tr><tr><td>Decision synchronization</td><td>✓</td><td>✓</td><td>✓</td><td></td><td>✓</td></tr><tr><td>Incentive alignment</td><td>✓</td><td></td><td>✓</td><td></td><td>✓</td></tr><tr><td>Resource sharing</td><td>✓</td><td>✓</td><td>✓</td><td>✓</td><td>✓</td></tr><tr><td>Collaborative communication</td><td>✓</td><td>✓</td><td>✓</td><td>✓</td><td>✓</td></tr><tr><td>Joint knowledge creation</td><td>✓</td><td>✓</td><td></td><td>✓</td><td>✓</td></tr></tbody></table>

“✓” = Mentioned.

# 5 Discussion

Over the last decade, the relationship between CE and SC collaboration has been discussed in academia. However, although it is evident that a functional development of partnerships along the SC is essential for the success of CE [1, 12, 13], there are still many doubts about the most valuable collaboration practices that could support sustainable development.

The case study analysis undoubtedly strengthens the importance of the collaboration between companies to foster CE developments. The respondents cited all the collaboration practices described by [5], which can be considered appropriate in dealing with CE. However, considering the analysis of the cases, goal congruence should be regarded as a prerequisite for this type of partnership rather than a collaboration practice. After this premise, it is essential to specify that information sharing and resource sharing are critical for CE development. The former is defined as the bonding agent that improves the business structure of SC partners and allows SCs to become more agile and reach competitive advantage [14]. The flow of information could be inherent to various aspects of the business, including transactional data, production processes, customer feedback, and research and development issues [6]. As suggested by [15], a high level of trust among partners is essential to share valuable information through the SC effectively. The importance of functional information sharing processes was continuously mentioned during the interviews. Indeed, different cases repeatedly pointed out that frequent visits to partners' production plants or offices are vital for firms to be
constantly updated and notified as soon as critical issues emerge, thus preventing the achievement of the desired performance levels. The latter, instead, implies leveraging capabilities and assets through joint investments and commitment by business partners [6]. Joint investments usually refer to both financial and non-financial aspects, including time, money, training, knowledge exchange, experience and technology updates [6]. [16] outlined how time and mutual effort needed to create valuable collaborative partnerships should not be undervalued. Considering the context in which CE systems develop, sharing financial and non-financial resources seems to be a crucial factor for the success of these projects. Indeed, the availability of stable production plants and processes guaranteed by large companies has been fundamental for some of the start-ups in the sample to manufacture their products. On the other hand, the possibility to interact with CE experts and actors available to share their experience and precious tacit knowledge, namely non-financial resources, has been a significant driver for the growth of some of the analyzed companies. Indeed, this aspect allowed them to overcome several issues of both technical and bureaucratic nature. The other collaboration practices cited in the literature were mentioned during the interviews, but they seem not as critical as the two described. However, it would be a misjudgment to consider them unnecessary for the proper establishment of SC collaborations to develop CE practices. For example, joint knowledge creation can be regarded as a beneficial collaboration practice, according to [6], both in terms of knowledge exploration (i.e., the research, acquisition, and application of new knowledge) and knowledge exploitation (i.e., the assimilation and the application of existing knowledge). Naturally, proper coordination of critical decisions affecting business activities and, consequently, partnerships' effectiveness, influences the performance of the parties involved in the collaboration [6]. Furthermore, decision synchronization among business partners is vital as joint planning supports companies on how to best invest their resources to succeed in a determined set of aligned goals [17]. Ultimately, incentive alignment between partners could help act in a coherent way with respect to the defined objectives [17]. Several examples of joint investments, such as specific machineries necessary for processing waste materials, were mentioned during the interviews and they represent a case in point of this collaboration practice. Certainly, some of the cited collaboration practices are linked to each other. In particular, collaborative communication affects the efficacy of the information sharing process. During almost all the interviews, some aspects related to this practice were addressed, but it is more appropriate to consider it as a factor that influences the information sharing process rather than one of the indispensable practices.

All SC collaboration practices are relevant for CE development, albeit with different intensities, and need to be grounded in goal congruence.

# 6 Conclusions

This paper aims to expand the knowledge about the relationships between CE development and SC collaboration. Specifically, the main objective of the work was to clarify further how SC collaboration affects the establishment of this new economic paradigm. The research question is addressed through a multiple case study approach, that was identified as the most appropriate methodology considering the novelty of the context
[18, 19]. Five companies operating in the Italian textile industry were analyzed. The evaluation of the selected cases clearly outlined the importance of establishing valuable SC collaborations to favor CE development. In particular, it emphasized that information sharing and resource sharing are the two most relevant collaborative practices to advance in the SC. In contrast, decision synchronization, incentive alignment, collaborative communication, and joint knowledge creation play an important but subordinate role.

The results of the analysis provide theoretical as well as practical insights. Concerning the theoretical implications, the study gives empirical evidence of the importance of SC collaboration for the establishment of a CE, highlighting the most crucial collaboration practices. In doing so, the study contributes to the literature on Sustainable Supply Chain Management. Indeed, the obtained results could support practitioners in managing SC collaborations. Moreover, managers and entrepreneurs should encourage collaborations beyond the traditional sector's boundaries to expand the potential synergies among industries that do not have contact points. Indeed, this aspect is fundamental in the CE context, where resources ought to be continuously maintained in the economic cycle. The waste generated by some actors could be considered valuable input for some others. Future developments of this study could address the challenges that these firms face before and after the establishment of the collaboration and the factors affecting the supplier selection process. Lastly, it is essential to highlight that this study has limitations that could be overcome in future works. First, the findings are related to the analysis of five Italian companies operating in the textile industry. The assessment of other firms that have implemented circular solutions and belong to different sectors would increase generalizability. Second, the study of cases located outside Italy and a focus on larger textile industry players would improve the consistency of the findings.

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