How Does a Circular Supply Chain Improve Sustainability?

Circular Supply Chain

As the world fights against climate change and global warming, the concept of circularity is gaining momentum owing to its holistic and sustainable principles.

A product, service, or resource is renewed rather than wasted, so circularity is about maintaining value. If more people supported the circular economy, the struggling planet would be in better shape – we’re losing green spaces, animals, and plants.

Something has to change in the real world (and quickly).

There’s a growing consensus online that the answer to all our problems is circularity, which decouples economic activity from consuming materials and energy by creating closed-loop cycles. 

The integration of the notion of circularity within the supply chain is referred to as a circular supply chain. Despite the fact that many companies have adopted sustainability and supply strategies, there are still shortcomings in their applications, yet the good news is that the circular supply chain helps overcome these gaps.

It definitely helps businesses make the transition from a linear supply chain to a circular one, as companies can save money and become more appealing to consumers. Nevertheless, there are difficulties when it comes to realizing this vision of an economic system where environmental and economic aspects are integrated, such as technology, market structure, and organizational leadership, to name a few. 

Supply Chain Sustainability Takes on A Lot of Forms 

The normal supply chains of material use are inefficient and damaging to the environment. As a result, consumers and policymakers have become interested in the circular supply chain, which focuses on reusing waste materials and transforming them into new or refurbished products.

Companies build sustainable cross-industry networks that enable the inception of interconnected supply chains that use resources according to the 3 Rs – Reduce, Reuse, and Recycle. Adopting circular economy practices along the supply chain entails acquiring, elaborating, and deploying adequate information and knowledge to obtain the desired outcomes in terms of business efficiency.

An ever-increasing number of companies are examining how they can use sustainable development goals to improve sustainability practices. 

Companies that are willing to adopt a circular model focus their attention on technologies, and business practices have a superior competitive advantage because they’re able to redesign and reorganize their operations to minimize resource inputs, waste, and emissions leakage.

Middle East brands prove that circularity is achievable, so it’s not just a quarterly initiative. Only Ethikal, for instance, curates ethically-made sustainable products so that customers can shop for upcycled, natural fabrics. Fashion isn’t grim at all. Clothing (and personal belongings) are produced via a more considerate model, in which the production of an item and its end of life are just as important. 

By Embracing The Reverse Logistics Process, Goods Can Be Given New Life 

At its present level of consumption, we’ll exhaust numerous natural resources in the near future if there’s no change in the way products are sourced, delivered, used, reclaimed, and regenerated.

Companies should use reverse logistics to ensure goods come back to recapture value. With unprecedented global shortages of raw materials, reverse logistics has never been more important, as it boosts recycling rates and keeps invaluable resources out of landfills and incinerators.

Companies are struggling to carry out various strategies, implement new organizational practices, and work together with other companies as regards their supply chains. Millennials will pay more for sustainable products, which means they’re more interested in the “why” than the “what”. 

Adopting a circular business model is expensive, indeed, but many technological developments are underway that could support the transition. For example, waste management and recycling solutions are swiftly advancing in performance and price, allowing the creation of a healthy and balanced living environment.

As the technologies become more widely adopted, decentralization in supply chains will become more economical. Companies can use a combination of forward and reverse logistics and manage waste and end-of-life products. Waste management practices improve circular supply chain management to achieve zero waste.

By way of illustration, Miltek in the Middle East helps companies minimize waste and emissions and maximize product output through technology infusion. 

The Middle East Isn’t Immune to The Challenges of Sustainability And ESG

To reshape every element of the take-make-waste system, it’s necessary to have meaningful collaborations to encourage new ways of using products. The Middle East is rapidly emerging as a leader by implementing policies that create a fertile ground for sustainable innovation. To be more precise, governments are enforcing policies to discard traditional hydrocarbons, which contributes to atmospheric pollution and climate change.

In addition, local regulators and stock exchanges offer sustainability report guidance and, at times, mandate sustainability reporting. The changing environment requires key adaptations, such as identifying opportunities and risks associated with sustainability or building engagement with stakeholders.  

The loss of reputational credibility could lead to a dramatic impact on profits and losses, so it doesn’t come as a surprise that companies in the Middle East are seizing new opportunities and leveraging chances to increase their competitiveness so as to move forward successfully.

Waste generation and management are important contributors to the economy’s carbon footprint, so continuous efforts are made to improve waste recovery. The UAE’s Circular Economy Council, following the meeting for 2023, concentrates on the implementation of the circular economy in the sectors of manufacturing, food, infrastructure, and transport. The development of a plan is an important milestone in the shift towards sustainability and development. 


All things considered, turning more linear supply chains into more circular ones will require that companies give up some of their large-scale manufacturing plants and let go of the specialization, not to mention the feature performance of parts.

Even if customers get less sophisticated products, they’re willing to forego performance for the sake of sustainability. Big data can support the implementation of a circular economy, enhancing the realization of new products, promoting effective decision-making, and enhancing operational and financial supply chain outcomes.

Beyond the benefits of addressing pressing environmental changes, a circular supply chain provides multiple advantages for businesses, such as localization opportunities, a good brand reputation, and attracting direct investments. 

Article and permission to publish here provided by Mary Hall. Originally written for Supply Chain Game Changer and published on June 23, 2023.