Developing a Circularity Cost Approach for the Wood Products Industry

Abstract

The paper approaches the topic of costs when transitioning from a classical manufacturing approach to a circular model in the wood products industry. The purpose of the endeavor is to investigate the main cost categories and to establish their relations and connections, for establishing the basis needed for a detailed quantitative model. The methodology employed starts from a brief literature review, completed by the industry experience of the authors, leading to a theoretical framework that address the costs before and after the aforementioned transition. Our main findings consist in identifying four principal groups of cost items, which are then detailed for the wood products industry and related to the usual accounting practices. The understanding of these connections is important for defining in the future mathematical relations and creating formulas that can be easily applied to any manufacturing company, including from other sectors. The ultimate goals towards which we are working is to facilitate the transition to the circular economy, by reinforcing its environmental benefits and gains with clear arguments pertaining to the efficiency of operating within this paradigm.