Circular Supply Chain

The circular economy serves industrial companies as a framework for sustainable management. It provides the essential criteria for influencing the use of resources, the generation of waste, and the consumption of emissions and energy, and for minimizing these by closing energy and material loops. An applied circular economy is thus one of the central building blocks of a company's sustainability strategy.

Driver and touchstone of the circular economy is the supply chain management. After all, it is not only a matter of achieving ecological advantages for companies, for example by reusing end-of-life products, but also of opening new markets. At the same time, integrating the circular economy can strengthen resilience against failures in the supply chain and open up solutions for dealing with resource scarcity. In this case, the supply chain becomes a "Circular Supply Chain".

Focal points and tasks in Circular Supply Chain projects of ROI-EFESO include:

Circular Supply Chain: Actors and Return Strategies

Establishing and managing circular supply chains

In contrast to supply chains with a linear structure, circular supply chains take into account an extended life cycle of a physical product, from its manufacture and use through several reuse stages to disposal. The industry, the market environment and company- or product-specific initial conditions therefore determine the path to successful realization of circular supply chains. The following points illustrate the design framework.

Motivation for the development of circular supply chains

Companies are increasingly establishing new supply chain structures that inherently take the aspect of recycling into account. The motivation for this is multi-faceted:

  • Resilience and securing access to raw materials and components by reducing risks of supply shortages, natural disasters, or geopolitical tensions.
  • Developing new markets with lower-cost products through reuse.
  • Securing established customer access and keeping out new competitors.
  • Saving energy and material costs compared to new production.
  • Reduction of total costs over the entire product life cycle (total lifecycle cost management).
  • Contribution to sustainability through economical use of scarce resources (energy, waste, wastewater and other environmental impacts).
  • Positive brand image.

Ultimately, the design of a circular supply chain must be financially attractive and economically viable. From a cost perspective, the reclaimed, recycled product should not become more expensive in the long term than a newly produced, comparable product.

Variants for the product cycle

An essential prerequisite for implementing a circular supply chain is that the products retain their value at the end of their life cycle. These can be recyclable components or raw materials that are bound in the product. Meaningful recycling requires that efficient processes make it possible to extract components or raw materials at the end of the primary product life cycle and reuse them.

The type of product recycling and reuse depends on the products as well as the condition of the respective end-of-life product. These can be the company's own products as well as those of competitors. In addition to suitability, an assessment must be carried out in each case from the point of view of costs and sustainability.

The following circuit variants are common. Which variants and cycle intensity a company implements depends on the product and business model.

Implement Circular Supply Chains with ROI-EFESO

Unlock the potential of your supply chains with the consultants of ROI-EFESO. Together we develop and implement processes, structures and systems for a circular supply chain that fit your company and business model.

As a starting point, we use our proven approach to identify areas of action and opportunities for your company in the following phases:

  1. Inventory based on our Circular Supply Chain Assessment.
  2. Definition of the target picture and initial potential assessment.
  3. Determination of the need for change and assessment of benefits.
  4. Creation of an implementation roadmap.


Dr. Jörn Grosse-Wilde

Dr. Jörn Grosse-Wilde
Infanteriestraße 11
D-80797 München
Tel.: +49 89 1215 90-0

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