Circularity measurement of external resource flows in companies: The circular flow tool

Unlike the linear model “take-make-use-dispose”, the circular economy model “grow-make-use-restore” intends
to potentiate material and energy flows within a system with the premise of increasing environmental gains.
Moreover, circular economy practices can be alternatives for closing loops in companies from different sectors,
with material-, waste-, and energy-related initiatives towards promoting greater internal value-adding. However,
the lack of consistent tools for measuring circularity of processes and companies is a gap yet to be covered. To
tackle this gap, this paper’s aims are: (i) to build a new tool, called Circular Flow, for generating greater internal
value and competitive advantage in organizations and identify potential circular economy-related opportunities
for closing loops based on external flows, (ii) to apply the tool in a case study, an organization that presents
material and energy (electricity) flows and exchanges with other organizations, and (iii) to discuss the integration
and potential opportunities for the tool in organizations. The novel, Circular Flow, tool is based on a set
of circular graph visualizations, and quantitative circularity indicators. For the graphical visualization, the
software tool R (using the Circlize package) was used. The graphs aid the visualization of several interconnected
pieces of information, allowing to show all quantitative flows of inputs and outputs, intuitively showing the paths
(origin and destination of each flow) within the boundaries of the system under study. The quantitative indicators,
e.g. Circularity of the organization (Circ p) and Circularity of each process (Circ o), show a circularity
index ranging from 0% to 100%, which can be assessed at different levels. The criteria to select these indicators
are based on quantities of inputs and outputs regarding mass and electricity. The tool has been applied in a case
study of a rural property in southern Brazil, which region holds a tradition for milk and pig farming. The use of
the tool showed the involvement of the rural property with its neighbors and with an agroindustrial cooperative.
Keeping these flows within the system may increase environmental gains by reducing transportation, using
renewable sources of energy, reducing costs, and boosting the generation of jobs and income in the region due to
new market opportunities and business models.