Industrial Networks and Industrial Symbioses

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					Industrial Networks and Industrial Symbioses

     Specificities in the Construction Sector

                 by Suhita Osório-Peters
                      (April 2010)
Introduction ......................................................................................3
Types of IS........................................................................................6
IN and IS in the construction sector ......................................................7
Literature ........................................................................................ 10
In the project COOPWEM we have set the work hypothesis that, in the
framework of market economies, cooperation and competition are the two
sides of the same coin. In their contacts with other enterprises, each
enterprise must find the optimal balance between these two forms of
relationships that seem to be opposite, but are, in fact, complementary, as
cooperation can be an important factor for competitiveness.
A second assumption of this project says that cooperation may be a powerful
instrument to promote a better management of natural resources, too. We
have been exploring forms of cooperation between manufacturing industries
in the framework of other projects – In particular the ZeroWIN project. Among
these, two cooperation forms deserve especial attention, namely:
   Industrial Network - can be defined as a group of units, which carry out,
   or contribute to, industrial activity, and are connected by material and
   energy flows, but also capital and information exchanges. In practice we
   observe that IN are systems of actors mainly consisting of enterprises that
   build a cluster around a clustering element (e.g. a region, a product);
   Industrial Symbiosis - can be defined as an industrial network “(…)
   engaging traditionally separate entities in a collective approach to
   competitive advantage involving physical exchange of materials, energy,
   water, and by-products.” (Chertow, 2007:12). In practice we observe that:
          Industrial symbioses (IS) normally occur on the basis of regional
          enterprises involved belong to different industrial sectors; the
          emergence of symbiotic relationships requests coordination;
Industrial Network is a overwhelming designation for a great variety of
systems. Literature shows that industries have created a great variety of
cooperative arrangements. To uncover the main factors that characterize the
diversity and the specificities of IN, it is interesting to define the patters that
help to distinguish certain types of IN.
To set up a typology of industrial networks (IN), it is helpful to recall that the
actors involved in an IN are related by the following types of links:
       Physical links (materials, products and energy flows that are
       Intangible links (services, information, know-how flow exchange)
       Economic links (monetary flows, value-chain)
Besides of actors and links, an industrial network must also have a few
structural elements that make its “network” character cognizable (see
Fig. 1). Structural elements build the framework for networking and
influence the type and strength of links among the actors, e.g.:
      Proximity (may be decisive for the exchange of materials within the
      Institutional structures (legislation, capital ownership, other formal or
      informal inter-dependences between the participants)
      Decision-making structures (decision-power distribution patterns)

              Industrial Networks

                    Structural framework that confer the network a certain stability

                    Convergence object (all efforts of network elements converge to its performance)

    Figura 1: Industrial Network with clustering elements: structural framworks and
                                  convergence object

Clustering elements may be recognized by the actors spontaneously, so they
start to exchange information and find ways to cooperate; but in practice,
most success stories show that the intervention of an external agent that
pushes the discovery of the “clustering elements” and the potential gains of
cooperation is needed.
Most common IN that emerge spontaneously are the so called value-chain (or
supply-chain) networks and the outsourcing networks. Usually companies
are inserted in such networks, mainly consisting of providers and clients. In
these IN each enterprise contributes - directly or indirectly – to:
      the creation of a product/service or
      the solution of problems associated with the production and
      commercialization of that specific product / service.
The physical linkages between the different actors are the products and
services they exchange, and the information and financial flows related with
them. Cooperation contributes to the achievement of the business goals of
each of the participating organizations. However, in most cases, in these IN
there is neither a common strategy linking the individual enterprises, nor a
framework for articulated decision-making processes. In fact the main
clustering element is the product or service itself; depending on the market
situation the actors involved may change frequently.
In some cases, however, communication among the enterprises promotes the
convergence of individual interests around a common object. In these cases
value-chain networks may evolve towards industrial networks striving for goals
that go beyond the simple exchange of goods and services. This happens, for
example, when a “main” enterprise that wants to promote the quality of its
products with a life-cycle approach binds its suppliers in its own strategy; in
this case an IN will emerge, with collective goals and cooperation
management structures. In construction we find this type of IN when a group
of actors works together in order to achieve a building certification, for
The objects around which enterprises find a convergence of interests
determine the scope and goals of cooperation. When an IN strives for a
collective improvement of environmental standards as, for example, the
promotion of zero-waste strategies within the network, industrial symbioses
(IS) become the driving force of cooperation.
Our understanding of IS builds upon the following assumptions:
      Industrial symbiosis engages traditionally separate industries in a
      collective approach to competitive advantage involving physical
      exchange of materials, energy, water, and/or by-products;
      The keys to industrial symbiosis are collaboration and the synergistic
      possibilities offered by geographic proximity;
      Such a system collectively optimizes material and energy use at
      efficiencies beyond those achievable by any individual process alone;
      IS systems, such as the web of materials and energy exchanges among
      companies, spontaneously evolve from a series of micro innovations
      over a long time scale.
IS research shows that the identification and exploitation of IS potentials
often requests the intervention of a facilitator who is able to get insights at
the processes of each of the involved enterprises and has got, on that basis,
an overview about the inputs and outputs of the whole network (see
Deliverable 5.1). The facilitator’s role is often decisive for the success of SI,
as he concentrates and can make available knowledge about produced and
demanded by-products. Although the engineered design and implementation
of such systems from a macro planner’s perspective, on a relatively short time
scale, proves challenging, the facilitator’s role is very important, especially
when firms of different sectors are involved.

Types of IS
Since there is a great diversity of IN, several attempts have been made in
order to determine the main types of IN that explore symbiotic potentials.
Chertow (2000) proposes a taxonomy of materials exchange types to consider
spatial and organizational elements (see also Deliverable 5.1):
      Type 1: through waste exchanges
      Type 2: within a facility, firm, or organization
      Type 3: among firms seated in a defined eco-industrial park
      Type 4: among local firms (not collocated in an industrial park)
      Type 5: among firms organized ‘‘virtually’’ across a broader region
Going deeper into the details of the exchanges, van Berkel (in: Regional
Resource Synergies for Sustainable Development, 2006) argues that
distinctions should be made about the sharing of utilities, by-product
exchanges as well as planning and management:
       a) Byproduct synergies,
       b) utility synergies and
       c) supply synergies
Concerning their management structure, networks may be (Grant et al, 2009):
      1. Autocratic networks: The autocratic model is characterized by
         topdown management and flows of information through a central
         node (e.g. a main firm that cooperates with its suppliers and
         subcontractors but keeps the leadership of the network). This is a
         well spread IN-model all over the world. The process was often
         referred to as “planning,” “engineering,” “optimization,”
         “architecture,” or “design.
      2. Facilitators’ networks: The facilitator model resembles the
         autocratic model in that there is a single person or small group (e.g.
         a researchers’ team) that collects information from the
         participants, processes the data, and then relays results back to the
         participants. The facilitator role is an ongoing process of continual
         iteration with the network participants. This model is less focused
         on an optimum or centrally planned network, but more so on making
         knowledge accessible to and between the members, and
         encouraging cooperation through a participatory process.
      3. Participants’ networks The participant model builds upon
         communication      directly    between    networked     participants.
         Participants are the main agents, identifying potential
         opportunities, establishing dialogue with complementary users,
         posting successful synergies, reviewing and vetting information, and
         implementing management structures to keep the network active.
         Although many IN certainly emerged in this form, we have not yet
         found examples of participant’s networks in literature.

IN and IS in the construction sector
In strict sense the construction sector only includes construction enterprises
and services providers that are directly or indirectly involved in construction
or demolition works (Fig. 2).

                         Material inputs                     Waste outputs

                                           Construction /

                                                            Closing loops

                                                                            Downstream cluster
            Upstream cluster

                                             Other Sectors

                     Figura 2: Construction / Demolition Networks
Main clustering element for the emergence of such IN of is the construction
product itself. The building works as a “natural clustering element”, as
enterprises from different specialities have to provide materials and labour
for the achievement the end product.

                C&DW-related Networks

           Upstream cluster:                Downstream cluster:
           Providers of specialised         Providers of specialised
           services, materials and          services for the treatment
           components for                   of C&D waste (re-users,
           construction (architects,        recyclers, operators for
           manufacturer of                  the disposal of C&DW)
           construction materials, etc.)

             Other Sectors:
             Providers of services, materials and components not
             exclusive for construction (these industries can be
             part of the upstream or the downstream cluster)

                Figura 3: Actors involved in a Construction Network

Networking has a long tradition in the construction sector, but such networks
have some specific characteristics:
       Networks of enterprises involved in a construction/demolition work
       often have ad hoc character; that means that they are created just for
       executing that specific construction or demolition project;
       Consequently, such networks often have temporary character; when
       the works at the site are finished, the relationships between the actors
       disappear (besides of contractual liabilities that may persist for a
       longer period);
       The main contractor, responsible for the execution of a
       construction/demolition project, usually builds an ad hoc network by
       outsourcing some specific tasks to other enterprises. Outsourcing
       networks are very popular in all industrial sectors, but in
       construction/demolition they probably play a particularly important
       Proximity may be an important factor for outsourcing networks,
       especially for tasks downstream the site (recyclers, waste treatment
       enterprises); upstream, proximity may play a less important role, as
       the owner/architect may request the use of materials that are
       produced in other places (including import of special stones,
       equipments, etc.);
       In many cases the actors responsible for the design phase of a
       construction product (owner, architect) do not work together with the
       actors that execute their project; considering the decisive importance
       of the design phase of a product for the implementation of zero-waste
       strategies, the lack of interaction between the actors makes the
       creation of SI difficult.
       Although the ad-hoc character of construction/demolition networks
       still is a reality (especially for SME), there is also a trend to more
       stable networks in this field. Large construction companies often
       enlarge the scope of their activities with additional capacities,
       avoiding outsourcing; today, big construction enterprises often have
       developed own capacities on architecture, construction/demolition
       works, waste management, etc.. Probably it is easier to identify and
       explore the IS potentials between the different units inside the same
       company or economic group than among different enterprises.
The existence of IN does not mean that IS potentials are automatically
recognized and properly exploited by the actors. Normally there must be also
a strong stimulus that makes enterprises to strive for an overall improvement
of environmental standards in the IN.
Apart from enterprises that have the capacities to execute all construction /
demolition works, the identification of IS potentials in construction/
demolition sites and their exploitation normally requires the intervention of
an external catalyst. By setting high re-use and recycling requirements for
C&DW, European legislation has played an important role in this sense,
making actors sensitive to that question.
However, due to the independent character of the different enterprises
involved, the intervention of a network’s facilitator reveals decisive for the
success of IS in construction/demolition sites. In fact, enterprises working on
a construction site normally have no idea about either the needs of other
enterprises working on the same site, or the waste they produce. Proximity
alone is not enough to make IS work; they also need a goal-oriented
coordination (see Literature).
The drivers for the network, the network environment, and the network
itself, such as its technologies or its facilities, are likely to change during the
life-time of the network. Therefore networks have to adapt to internal as well
as external changes, and show dynamic behaviour. In many cases described in
literature, this is the task of the network’s facilitator.
In the ZeroWIN case-studies the network’s facilitator role has been played – to
a certain extent - by the research team.


Chertow, Marian R. (2007) “Uncovering” Industrial Symbiosis in: Journal of Industrial
Ecology, Volume 11, Issue 1, pages 11–30, January 2007
Grant, G. B., Seager, T. P., Massard, G. and Nies, L.(2009): Information and
Communication Technology for Industrial Symbiosis in Journal of Industrial Ecology
Volume 14, Number 5, 740-753,
Jen Gristock (2003): Understanding the Emergence of Industrial Networks
Lombardi, Rachel and Laybourn, Peter (Eds) (2007): Industrial Symbiosis in Action.
Rob Dekkers (2009): Dispersed Manufacturing Networks: Challenges for Research and
Rob Dekkers: Industrial Networks of the Future: Review of Research and Practice
Martin, M.*, Ivner, J., Svensson, N. and Eklund, M. (????):Classification of Industrial
Symbiosis Synergies: Application in the Biofuels Industry. Source:
Cherkow, M. (2000): "Industrial Symbiosis: Literature and Taxonomy," Annual
Review of Energy and Environment, Vol. 25, 2000
Centre of Excellence in Clean Production (2007) : Regional Resource Synergies for
Sustainable Development in Heavy Industrial                 Areas:    an   overview    of
opporunities and experiences. Source:


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