How to Scale Circular Supply Chains
Circular supply chains are emerging as the next basis of competitive advantage, according to a recent article on the subject from Bain & Company.
And that’s probably the reason why a recent global survey of nearly 500 executives across manufacturing-centric industries, 95% said circularity will be important to their company within the next three years, and 71% called it “very important.” However, only 20% have a supply chain built to scale it.
The article explains:
The challenge lies in the architecture of circular supply chains. Circularity breaks the assumptions on which traditional supply chains were built—namely, predictable volumes, standardized inputs, and unit-based economics. Scaling it requires CEOs and chief operating officers to make clear choices about where to compete, how to redesign value chains for multiple life cycles and service flows, and which capabilities sit at the core of the operating model.
Circularity leaders confront the structural barriers that cause circular initiatives to stall long before they reach scale. This Bain Brief distills the core insight from our recent work with the World Economic Forum and industry leaders: Scaling circularity is not about doing more pilots; it’s about redesigning the supply chain to absorb variability, recover value, and perform reliably across multiple product lives.
The five biggest challenges that prevent companies from scaling circular initiatives? Survey found:
- Operations/logistics
- Business opportunity and profitability
- Technology, data and infrastructure
- Regulatory
- Organizational