Supply Chain Management and the Circular Economy: Towards the Circular Supply Chain

Abstract

Circular modes of production, known as the circular economy, are welcomed in political and business circles to overcome the shortcomings of traditional linear operating models. Academic literature on the circular economy is nascent however and little attention is given to supply chain management implications, regardless of the relevance of supply chain innovation towards a more resource efficient and circular economy. Based on a review of the literature, this article presents preliminary propositions concerning implications for the development of what we term ‘circular supply chains’, defined here as the embodiment of circular economy principles within supply chain management. Our propositions are based on the following arguments: a) a shift from product ownership to leasing and access in supply chain relationships; b) the relevance of structural flexibility and start-ups in regional/local loops; c) open and closed material loops in technical and biological cycles; d) closer collaboration within and beyond immediate industry boundaries; and e) public and private procurement in the service industry as a lever for the scaling up of circular business models. We discuss what these circular economy principles mean in terms of supply chain challenges and conclude with limitations and future research agenda.