What are the circular economy opportunities and risks in your supply chain and value network?

1 Assess your material flows

The first step to identify circular opportunities and risks is to map and analyze your material flows across your supply chain and value network. This includes the inputs, outputs, and impacts of your products and services, from raw materials to end-of-life. You can use tools such as life cycle assessment, material flow analysis, or circularity indicators to measure and compare the environmental and social performance of your current and alternative scenarios. This will help you to spot the hotspots, gaps, and trade-offs in your material flows, and to prioritize the areas where you can reduce waste, increase efficiency, and create value.

2 Design for circularity

The next step is to redesign your products and services to make them more durable, reusable, repairable, recyclable, or biodegradable. This means applying the principles of circular design, such as modularity, standardization, adaptability, or biomimicry. You can also use digital technologies, such as sensors, blockchain, or artificial intelligence, to enable smart tracking, tracing, and optimization of your products and materials. By designing for circularity, you can extend the lifespan and utility of your products and materials, and reduce the need for virgin resources and energy.

3 Engage your stakeholders

The third step is to engage your stakeholders, such as suppliers, customers, partners, regulators, or investors, in your circular transition. This means communicating your circular vision and strategy, aligning your goals and incentives, and collaborating on solutions and innovations. You can also leverage platforms, networks, or associations that facilitate the exchange of best practices, knowledge, and resources among circular actors. By engaging your stakeholders, you can build trust, loyalty, and synergies in your supply chain and value network, and overcome barriers and bottlenecks.

4 Manage your risks

The fourth step is to manage the risks and uncertainties that may arise from your circular transition. This means identifying and assessing the potential legal, financial, operational, reputational, or social risks that may affect your business performance or compliance. You can use tools such as risk matrices, scenarios, or audits to evaluate and mitigate your risks. You can also monitor and report on your circular progress and impact, using indicators, standards, or frameworks that are relevant and credible. By managing your risks, you can ensure that your circular transition is viable, safe, and responsible.

5 Innovate your business model

The fifth step is to innovate your business model to capture the value of your circular products and services. This means shifting from a linear model that relies on selling more products to a circular model that focuses on delivering more value. You can explore different circular business models, such as product-as-a-service, sharing, leasing, or performance-based contracting. You can also diversify your revenue streams, such as by selling or using your by-products, waste, or data. By innovating your business model, you can increase your customer satisfaction, loyalty, and retention, and create new sources of competitive advantage.

6 Learn and improve

The sixth and final step is to learn and improve from your circular experience and feedback. This means collecting and analyzing data and information on your circular performance and impact, using tools such as surveys, interviews, or dashboards. You can also benchmark and learn from other circular leaders and best practices in your industry or sector. You can use the insights and lessons learned to refine and optimize your circular strategies, processes, and solutions. By learning and improving, you can foster a culture of continuous improvement and innovation in your supply chain and value network.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?