Supply Chain Leaders Expect Circular Economy to Increase Profits Through 2025

Close to 74% of supply chain leaders expect profits to increase between now and 2025 as a result of applying circular economy principles, according to a Gartner survey. On average, supply chain organizations have been applying circular economy principles for three years to approximately 16% of their product portfolio.

“There is still such a great deal of untapped potential in the circular economy. Supply chain leaders can use the inflationary environment as a catalyst to reshape their relationship with materials. Instead of losing materials out of the economy in the form of waste, the circular economy helps capture value,” says Sarah Watt, VP analyst with the Gartner Supply Chain practice.

From Gartner:

•  According to the survey, the Top 3 circular economy benefits that have been realized in the previous years are the minimization of negative environmental impacts, shorter and compact supply chains and enhanced customer insights.
• The survey showed that respondents are making changes to the supply chain, including integrating circular economy products into the planning process (54%), adding new capabilities to existing manufacturing sites (42%) and adding new locations for repair/remanufacturing and waste management that are company owned (36%).
• Looking out over the next three years, the focus will increase on procurement, with buyers being incentivized to purchase circular materials (41%).