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The role of redundancy in industrial symbiotic business development: A theoretical framework explored by agent-based simulation

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  • Fraccascia, Luca
  • Yazan, Devrim Murat
  • Albino, Vito
  • Zijm, Henk

Abstract

Sustainability of Industrial Symbiosis (IS) businesses plays a key role in supporting the circular economy. Industrial symbiosis networks (ISNs) can survive in the long run if they have high resilience to perturbations that lead to operational uncertainties. The literature highlights that the resilience of ISNs can be enhanced by ensuring high redundancy of IS relationships: accordingly, firms should exchange the same waste with more symbiotic partners. However, the impact of increasing redundancy on economic and environmental performance of IS has not been investigated so far. This paper proposes a theoretical framework to understand the effect of the redundancy strategy on the performance of companies involved in IS. Accordingly, the optimal redundancy strategy refers to an optimal number of partners to (from) which waste producers (users) should send (receive) wastes to maximize the IS performance. An agent-based model is designed to explore the proposed framework and an agent-based simulation is applied to a marble-concrete IS case. The analysis shows that the optimal redundancy strategy is influenced by the combined effect of waste market dynamicity and transaction costs, and is usually different when viewed from an economic versus an environmental perspective. The paper provides a theoretical contribution based upon the integration of operational aspects of IS with the redundancy concept in IS-based businesses. The adopted methodology is innovative as it integrates willingness to cooperate, bargaining power, and inter-company trust development into the business decision-making process. Finally, how to overcome trade-off challenges between environmental and economic performance is discussed from managerial and practical perspectives.

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  • Fraccascia, Luca & Yazan, Devrim Murat & Albino, Vito & Zijm, Henk, 2020. "The role of redundancy in industrial symbiotic business development: A theoretical framework explored by agent-based simulation," International Journal of Production Economics, Elsevier, vol. 221(C).
    • Handle: RePEc:eee:proeco:v:221:y:2020:i:c:s0925527319302816
    DOI: 10.1016/j.ijpe.2019.08.006
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