1. Formulate ambitions and question

1.1 Circular ambition and strategies

Want to get maximum performance in circular procurement? It starts with setting a clear ambition for your procurement process. When doing this, build on your organisation’s ambition and specify according to the product group that you intend to purchase. For example, are you committed to reducing resource consumption, do you want to maximise the value of your residual streams, or both?

CircularIQ has developed a model to support you in this. This model – summarised in the figure below – provides five possible circular objectives for procurement processes (A to E). By choosing one or several objectives, different strategies (example: A1 to A5) will then be possible. Choose an objective and strategy that fits with the product group you want to procure. Then, once awarded, you can measure the impact of your procurement against these objectives.

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Five possible circular objectives, including possible associated strategies
Source: Vlaanderen Circulair (2018)

More options for measurement and monitoring can be found in the Ministry of Infrastructure and Water Management’s (IenW) Monitoring and Contractual Assurance CSR Guide:

1.2 Question: from technical to functional

Many procurement questions are quite technical – as the client, you determine the specifications of the products you want to be supplied. With a functional question, you are marketing a need, rather than a solution.

A functional specification is possible at two levels:

  1. You only express a need, with some boundary conditions. This is the purest form of functional specification.
    An example is a tender that includes the need for comfort. Such as a building with an indoor temperature of 21 degrees, with a margin of 2 degrees up and down. Or a connection between river bank A and river bank B, where a tunnel, bridge or ferry are all possible.
  2. You prescribe a type of solution, but the requirements are functional.
    Think of a bridge railing, with a minimum height and certain requirements for maintenance. The other requirements are open – suppliers can choose a material, for example – provided that the proposed solution meets the functional requirements.

A functional question can contribute to a circular solution in three ways:

  • You give market players the flexibility to meet the demand in the best possible way (qualitatively). So long as that interpretation meets the functional need.
  • You offer market players more opportunities to use product innovations. This creates more room for distinctiveness.
  • With a more functional question, you avoid setting (technical) requirements that conflict with your circular ambitions.

Keep in mind that the maturity of the market (when it comes to circularity) and the complexity of the product group affect the extent to which you can make your question functional:

  • With a more mature market, it is more feasible to opt for a functional specification. In a less mature market, it is sometimes wiser for the client to provide solution directions.
  • For a more complex product, such as a laptop, the difference in knowledge between client and supplier is greater. In that case, functional specification can help to realise sustainability ambitions. For simpler products, such as printing paper, a functional specification is less necessary.

More on functional tenders can be found under step 1 of the Procurement process: Formulate ambitions and question.

1.3 Strategy by product group

Many industries are currently working on the transition to a circular economy. An ever increasing number of market parties have some initial experience and have already made a start. The central government is increasingly drawing up strategies that give direction to help make a particular product group more circular. You should find out what is happening in the product groups your organisation will soon need.

Examples of strategies for a particular product group:

Points for action

  • Formulate a circular ambition that fits both the product group and your organisation’s policy.
  • Determine your organisation’s deeper circular ambition at the outset of the procurement process, rather than the derived product demand. 
  • Examine whether you can functionally specify the demand for your procurement process: map out the need in the market, rather than the solution.
  • But: functional specification is by no means sacrosanct! In an immature market or with a complex product, a more technical specification can actually provide direction.

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