Why supply chain management is the linchpin of circularity in consumer goods

Every year, the European retail and wholesale sector emits around 1.6 gigatons of CO₂e – nearly one-third of Europe’s total footprint. What is even more striking is that approximately 98% of these emissions stem from Scope 3 activities across the supply chain. Reducing this footprint is not just a matter of optimizing operations; it requires rethinking how products are designed, used and ultimately returned to the value chain. This is where the circular economy comes into play. By shifting from linear “take-make-dispose” models to circular strategies such as circular sourcing, reuse, redistribution and recycling, companies can tackle emissions at their source while unlocking new business opportunities. And at the center of this transformation is supply chain management – with logistics as a critical enabler of circularity in practice.

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Download and explore the full infographic here: “The key role of logistics and the circular economy in the consumer goods industry“

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Circularity as a business driver

The case for circularity is not only environmental but also economic. In 2022, circular economy transactions in the consumer goods sector totaled USD 20 billion, with forecasts predicting growth to USD 32 billion by 2026. More broadly, global circular transactions are expected to more than double in the same period, rising from USD 339 billion to USD 713 billion. This growth signals a clear message: companies that embed circularity into their supply chains can achieve competitive advantage, improve brand reputation and build resilience against disruptions.

Supply chain management as the digital backbone

For the consumer goods industry, supply chain management is the linchpin of circularity. Beyond delivering products, modern supply chains must now coordinate returns, refurbishment, recycling and redistribution – tasks that require advanced digital capabilities.

• End-to-end visibility: Digital platforms provide transparency across the value chain, enabling scenario planning and proactive risk mitigation.
• Optimization at scale: Simulation-based routing, production planning and packaging optimization reduce costs while cutting emissions.
• Reverse flows integration: Capturing end-of-life products and materials and returning them to the cycle is key to closing the loop.
• Collaborative ecosystems: Cloud-based solutions, digital twins and control towers allow supply chain partners to coordinate efficiently and manage complexity.

Designing for circularity

True sustainability starts with design. With only 6.9% of materials entering today’s economy being recycled, the importance of rethinking product and packaging design cannot be overstated. Supply chain management ties these efforts together, ensuring that renewable inputs, sustainable production methods and reverse flows are integrated into one seamless system.

A well-rounded solution

The circular economy reframes supply chain management from a supporting function to a strategic enabler. By digitalizing planning, execution and monitoring processes, companies in the consumer goods sector can lower emissions, increase resource efficiency and capture new value streams.

As our infographic “The key role of logistics and the circular economy in the consumer goods industry“ shows, supply chains are no longer just about moving goods from A to B – they are the infrastructure that makes circularity possible.

For deeper insights, read our white paper “The Circular Economy: How Digital Technology Is Transforming the Supply Chain into an Ecosystem“.