Circular Economies
Circular economy thinking has become one of the most important shifts in global supply chain strategy. It’s not just about sustainability—it’s about building smarter, more resilient, and more responsible operations that support long-term success.
As supply chain professionals, we're used to optimizing flows—from point A to point B. But in a circular economy, value doesn’t stop at the point of sale. Instead, products, parts, and materials are kept in use longer, reused, remanufactured, or responsibly recycled, creating a continuous value cycle rather than a linear path.
In short: less waste, more value.
What Is a Circular Supply Chain?
A circular supply chain is one that designs out waste and pollution, keeps products and materials in use, and regenerates natural systems—all while delivering economic value.
It contrasts with the traditional “take-make-dispose” linear model, where raw materials are extracted, transformed into products, consumed, and then discarded. Circularity reimagines this as a closed loop, where the end of a product's life becomes the beginning of a new cycle—through returns, refurbishment, recycling, or resale.
This idea is increasingly tied to the Triple Bottom Line framework:
People – ethical labor, community impact, inclusivity
Planet – resource stewardship, emissions reduction, waste minimization
Profit – financial health through efficiency, innovation, and long-term risk reduction
Historically, efficiency and cost were king in supply chain design. The post-war industrial boom optimized for mass production and speed, not environmental or social outcomes. In the 1980s and ’90s, lean and just-in-time principles further focused on cost, inventory reduction, and time to market.
But by the early 2000s, sustainability entered the conversation. Regulatory pressure, rising resource costs, and early signs of climate change prompted companies to examine the full lifecycle of their products. In parallel, consumer expectations began shifting—people wanted transparency, ethical sourcing, and responsible disposal.
Today, with ESG commitments accelerating, climate risk increasing, and supply chain disruptions highlighting fragility, the shift to circularity isn’t just idealistic—it’s increasingly essential to competitiveness.
One of the biggest opportunities for circularity lies in returns management, especially in the Consumer Packaged Goods (CPG) sector. In the United States, return rates—especially for e-commerce—are significantly higher than in most global markets. In some categories, returns can reach 20–30%, with much of that product ending up in landfills or liquidated at a loss. The scale of waste is both environmentally and financially unsustainable.
Contrast this with parts of Europe and Asia, where regulatory frameworks and consumer behavior have encouraged greater reuse, refurbishment, and re-commerce models. Take-back programs, resale platforms, and deposit return schemes are more normalized, helping to close the loop at scale. The U.S. market is catching up—driven by pressure from both regulators and younger, sustainability-conscious consumers—but there's still massive opportunity to shift from reactive returns to proactive circular models.
Turning Reverse Logistics Into a Competitive Advantage
For many businesses, reverse logistics has traditionally been a cost center—a necessary hassle. But for companies thinking circularly, it’s now a strategic differentiator.
By building intelligent, streamlined reverse logistics networks, companies can:
Recover value from returned or used goods
Optimize inventory through reconditioning and redistribution
Reduce landfill waste and associated environmental costs
Strengthen customer trust by making returns seamless and responsible
More importantly, circularity feeds resilience. When materials or products can be reused internally or through resale channels, it cushions against supply shocks and raw material shortages. It also enables faster replenishment, especially in high-turn, high-velocity categories.
My own journey into circularity deepened while working in Canada, where I partnered closely with our refurbishment workshop to optimize recovery and reduce waste. Together, we significantly reduced the scrap rate, ensuring that more returned products were given a second life—restored, repackaged, and resold. We also focused on sustainable packaging solutions, shifting to recyclable materials that aligned with our environmental goals without compromising on quality or customer experience.
Since returning to the U.S., I’ve taken on a new role focused on Aftersales operations—an area I’m deeply passionate about not only for its commercial potential, but for its environmental impact. It's in the aftermarket that we often find the most untapped opportunity to turn circularity into real, measurable business value.
When entering a new function or area of the Supply Chain I always look at who is doing it well and several companies are already leading the way:
IKEA is investing heavily in product take-back and re-commerce initiatives across Europe, with goals to become fully circular by 2030. Their pilot programs in Canada and Australia include buy-back services, furniture recycling, and spare parts access to encourage repair.
HP and Dell have long-standing closed-loop recycling programs, reclaiming used printers, cartridges, and laptops for parts reuse and material recovery—supporting both circularity and regulatory compliance.
Patagonia has built its Worn Wear program into a brand cornerstone, taking back used clothing for repair, resale, or recycling—extending product life and customer loyalty.
These aren’t niche initiatives—they’re core to their operating models, helping to drive brand equity, customer retention, and cost management simultaneously.
Circular supply chains represent the future of sustainable commerce. But making the leap requires more than good intentions—it demands investment in reverse logistics, visibility across product life cycles, and a cultural shift from “end-of-life” thinking to next-life planning.
Start by asking:
Where are we currently wasting value?
What percentage of our returns are recoverable?
What infrastructure or partnerships do we need to close the loop?
Because in tomorrow’s economy, waste isn’t just an environmental issue—it’s a strategic failure. And circularity isn’t a trade-off—it’s a pathway to supply chains that are more profitable, more responsible, and more resilient.
Be sure to make sure you close the loop, otherwise you’ll find yourself spiraling. Ok, I admit it, I didn’t have a great picture for circular economy that wasn’t just a Möbius loop (that’s the fancy name for the recycling symbol, which I found out while on the Sustainability Committee and saw everyone in the room bar one googling it).