Report Circular Supply Chain

ABOUT LSC 2
Logistics Studying
Studying Club
Club takes pride in being the sole pioneer
club of Foreign Trade University in motivating and
supporting students who share the same passion for
Logistics and Supply Chain. Since its foundation in August
2014, Logistics Studying Club, along with its mission to
become the professional organization specializing in
Logistics and Supply Chain, has greatly taken the lead in
holding programs on specialized talents access the most
updated knowledge of the field. Together with the slogan
your dream"
"Ship your dream" , Logistics Studying Club is the place to
take wings for the passion of young students and help
Vietnam become part of top human resources suppliers.
VISION MISSION
Oriented towards External Orientation:
Orientation:
developing Logistics Increasing the cognition of
Studying Club into a the Logistics Studying Club
leading organization, in the same industry and
student community in universities in Ho Chi Minh
Logistics & Supply City.
Chain Management in
Ho Chi Minh City.
Internal Orientation:
Towards "Standardization"
and "Adaption" culture of
Logistics Studying.
lscftu2.com
https://www.facebook.com/lscftu2
ABOUT SCMISSION 3
SCMission Contest,
Contest, which is a contest about analyzing and
solving business cases, is organized for nationwide students
(who have a passion for Logistics and Supply Chain
Management).
Coming back with Season 6, the competition will bring

practical business cases (related to Supply Chain) which
requires the participants to apply the knowledge and skills to
have outstanding solutions.
Therefore, bringing both overall and detailed views the major

as well as being well-equipped with the necessary knowledge
and skills related to the major for the students.
With careful research and preparation, SCMission Contest

season 6 will be back with a promise to be outstanding as
well as impressive.
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https://www.facebook.com/lscftu2
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TABLE OF
CONTENTS
Chapter 1: Executive Summary 5
I. COVID - 19 ............................................................................................. 7
II. Russia - Ukraine war ................................................................... 11
Chapter 2: Key Circular Supply Chains terms
and concepts 13
I. Technical and biological materials in CSC ............. 15
II. Key Circular Supply Chains concepts .......................... 17
III. Key Circular Supply Chains terms .................................. 19
IV. Circular Supply Chains framework ............................... 22
V. Example .............................................................................................. 26
VI. Socio-economic relevance ................................................... 27
Chapter 3: Supply Chain Management in the era
of Circular Economy 29
I. Circular Economy ....................................................................... 30

II. Supply Chain Management in Circular
Economy ............................................................................................ 33
Chapter 4: Building Circular Supply Chain for a
Circular Economy 35
Chapter 5: Circular Supply Chain & Other
Concepts 42
I. Circular Economy and Sustainability ........................ 43
II. Circular Economy and Reverse Logistics .............. 47
CHAPTER 1
Executive Summary
Executive CSC - terms SCM in the Other
Building CSC
Summary and concepts era of CE concepts
In 2022, the world will not only continue to suffer the

impacts of COVID-19 but also a year where the world will
continue to witness political shifts in each region and
globally towards complex and difficult to predict. This
entails many consequences, negatively impacting in
many directions on the traditional linear supply chain.
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I. COVID-19
IMF:
In the "age" of COVID-19, seaport congestion, increased time

for cargo control and disinfection caused long delays in the
transportation of goods.
COVID-19 has prevented the flow of goods and services from

production centers to consumption centers, and even from
one region to another within countries. Up to now, the efforts
of national governments in mass vaccination of the community
have created an opportunity for most of the countries to
reopen, the restrictive measures are gradually lifted.
However, in some other areas of the world, the Covid-19

pandemic continued to break out in some countries such as
China, Japan, and Korea... especially, China with the Zero-
COVID policy. The global manufacturing industry is already
heavily dependent on sourcing from China, which is a
drawback of the global supply chain.
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Over the past 3 years, we have been hearing about the strong
negative impacts of COVID-19 on Global supply chains.
However, when humanity around the world has almost passed
the peak of the pandemic, its after-effects still cannot be
reduced. Along the upstream of the global supply chain, the
disruption of production activities still comes from anti-
epidemic measures such as blockade, social distancing,
stopping production and business activities, tourism, festivals,
etc. In this situation, serious supply shortages for some
industries have spread from industry to industry, from country
to country, especially the electronics industry. By industry and
sector, the Covid-19 epidemic has made the semiconductor
chip supply situation significantly worse.
More than 169

Manufacturing industries were affected
mobile phones
cars
home appliances
personal computers
…
Although chip shortages and supply bottlenecks have begun to

show signs of abating in 2022, semiconductor and supply chain
issues have yet to be fully resolved and will continue to affect
production in 2023.
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On the downstream side, although the strong development of

the e-commerce industry has stimulated shopping and
consumption during the epidemic, it still cannot offset the
damage caused by the blockade and distance. In addition, the
decline in consumer income has created a delay in
consumption due to concerns about the unpredictable
developments of the Covid-19 epidemic, causing people's
consumption demand to decrease accordingly. However, the
magnitude of the impact depends heavily on the structure of
each economy as well as its links to the rest of the world. In the
United States, right after the end of the large-scale blockade,
the epidemic situation tends to decrease and businesses start
to operate again, along with the effect of strong economic
stimulus measures of the United States. Besides, the rapid
increase in consumer demand thanks to the support packages
from the government creates a gap with the supply due to the
limitation of current production capacity.
Especially, the rapid spread of

of
the new Covid variant
ta ge
r
Sho or, raw worldwide is still exacerbating
..
Lab erial,..
m at labor shortages, shortages of
raw materials for production in
SUPPLY
the US and many countries.
DEMAND
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The United States is a country that is relatively dependent on

imports. Each year, the United States imports more than $1
trillion in goods from Asia, with a wide range of items ranging
from toys, clothing, electronics, furniture, medical equipment,
semiconductors, etc. Meanwhile, transporting goods from Asia
to the United States in the context of the Covid-19 pandemic
faced many difficulties and increased transportation costs,
making many distributors unable to maintain product supply.
While the chip export restrictions implemented by the United
States are exacerbating shortages that cannot be completely
resolved in the short term, plunging the supply chain into
unprecedented chaos and hindering the recovery of the global
economy.
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II. Russia - Ukraine war

In Europe, a serious energy shortage started when the gas
reserves in the region were low, but gas supplies from some
countries such as Russia, and Norway... were limited. In
particular, due to the impact of the Russia-Ukraine conflict,
Russia has sharply reduced gas supplies to Europe after the
West imposed sanctions on this country, causing gas prices to
rise sharply. In China, the widespread lack of energy and the
implementation of policies to cut carbon emissions and limit
energy consumption have led to electricity shortages in many
localities, disrupting people's lives, affecting the production
process at factories. This has slowed down the country's
economy and made global supply chain disruptions more
severe. The power shortage in China - the world's largest
exporter will negatively affect production activities, directly
impacting the global supply chain. Chinese manufacturers
warn that control measures to cut electricity consumption will
lead to a decline in manufacturing output in the leading
localities in this sector.
Monthly prices for natural
gas in the United States
and Europe from January
2014 to December 2022
Source: Statista
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Russia and Ukraine are two major suppliers of metals (copper,

nickel) and are also two of the world's main wheat exporters.
Russia leads the world in terms of exports and is third in wheat
production, while Ukraine also ranks third in the world in terms
of exports of this commodity to Europe, the Middle East, and
Africa. In addition, Russia cut gas supplies to Europe when the
West imposed sanctions on Russia to support Ukraine,
disrupting energy supplies. Therefore, the conflict between
Russia and Ukraine is forecasted to greatly affect the food
supply chain, greatly affecting the prices of many commodities
on the world market soon. In the medium and long term, the
disruption of the global supply chain will be overcome by
reshaping the distribution of supply chains in the direction of
reducing the concentration on one geographical region or one
country such as China. This is happening especially for key
supply chains such as semiconductor and chip production and
supply, pharmaceuticals, and medical devices.
The issues unfolding today raise a lot of thought: is the current

linear supply chain sustainable or are there still concepts we
can still exploit.
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CHAPTER 2
Key Circular Supply
Chains terms and
concepts
Building CSC
A circular supply chain is a closed-loop system where waste

and emissions are minimized, and resources are kept in use for
as long as possible through recycling, repair, refurbishment,
and remanufacturing.
From linear to circular supply chain
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I. Technical materials and

biological material
Biological materials Technical materials
Definition
Materials used in the

Materials of biological origin such as
fields of engineering and
tissues, cells, proteins, and DNA
technology
Example
Metals, plastics,
Cotton, timber,... ceramics, composites,
and electronics,..
Can be regenerated or grown from Finite and cannot be

the earth. regenerated.
Can be kept in use for longer Once the material
periods by allowing the materials can no longer serve a
themselves to cascade — function, the
repurposing from a high-value biochemical
product to a low-value product... feedstock of that
Cascading keeps biological materials material can be
in use for longer periods, it also acts extracted as heat or
Characteristics
as a strategy to maximize the value energy, and the

of the biological materials extracted remaining organic
from the earth. For example, rather material can be
than cut down a tree and process utilized as nutrients
the fiber to become a piece of paper to fuel the growth of
(low-value product), the tree should more biological
be made into something of high- materials
value first, such as a building There is always the
structure, after it no longer can embodied value of a
serve as a building structure, it can material.
cascade into a lower-value product,
such as a table or plywood.
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Biological materials Technical materials
The circular economy focuses on The circular economy

closed-loop systems that mimic aims to reduce waste by
natural processes. This involves designing products and
harnessing the natural ability of living processes that allow for
organisms to break down and reuse the recovery and reuse of
materials, such as through materials. For example,
composting and biodegradation. recycling and upcycling of
Additionally, the development of new metals, plastics, and
technologies such as bioplastics, electronics can help to
which are made from renewable reduce the amount of
resources and can be composted at waste generated and
the end of their life cycle, can help to conserve finite resources.
reduce the environmental impact of
products and packaging.
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II. Key Circular Supply

Chains concepts
Cradle-to-Cradle: a design
Cradle-to-Cradle:
concept and framework
that proposes a shift from
the traditional linear
"cradle-to-grave" model of
resource use (where
resources are extracted,
used, and eventually
disposed of) to a circular
model where materials are
continuously cycled.
Extended Producer Responsibility (EPR) means that recycling,

disposal and end-of-life responsibility for products and packaging
lies with those who design, market and profit from them—the
producers. . According to Environmental Packaging International:
Producers take responsibility for their packaging at the
postconsumer stage.
EPR shifts responsibility for recycling and waste disposal from
local government to private industry, e.g., ‘producers’.
The idea behind EPR programs usually is to increase recycling;
programs often contain mandated recycling targets.
EPR also impacts how companies design and choose materials
for their products. If producers are responsible for
postconsumer waste created by their products, it creates an
incentive for them to make products that are less wasteful.
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Building CSC
Comet Circle
Comet Circle concept:
concept: Each circle in the chart below represents
our partners that can help develop a sustainable society. The
new resources harvested by the materials supplier from the
natural environment (upper right) will be turned into a product
through moving from right to left along the upper route, finally
reaching the users (customers). The used products will follow
the route below from left to right.
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III. Key Circular Supply

Chains terms
Product stewardship: a principle and a set of practices that
aims to ensure that the production, use, disposal, and recycling
of a product are managed in a way that minimizes its negative
impacts on human health and the environment. The goal is to
encourage manufacturers and consumers to take
responsibility for the products they create and use, and to
minimize waste and pollution throughout the product's
lifecycle. Product stewardship programs can include initiatives
such as extended producer responsibility, product labeling and
certification, take-back and recycling programs, and education
and awareness-raising campaigns.
Product-as-a-Service: A business model where a company

provides a product as a service, rather than selling it, allowing
for more efficient use and management of resources. Through
this setup, companies simply lease out products that were
once sold directly to the customer. By way of this transition of
ownership, companies maintain revenue by offering
maintenance and repair services and are encouraged to
develop resilient products rather than cheap, single-use
products. The customers, then, receive access to products at a
fraction of the cost and don’t need to worry about the time and
expense associated with maintaining, insuring, and replacing
the product.
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Circular Metrics: measure the success of a circular supply

chain, such as the amount of waste diverted from landfills, the
amount of energy saved through recycling. Some common
circular metrics include:
Material Circularity Index (MCI): Measures the extent to

which a company's products and services are made from
recycled or renewable materials and can be recovered,
reused, or recycled at the end of their life.
Product Lifetime Extension (PLE): Measures the extent to

which products are being used for longer periods, reducing
the need for new resource inputs and waste generation.
Recycling and Recovery Rates: Measures the amount of
waste that is being recovered and recycled, rather than being
sent to landfill.
Renewable Energy consumption: Measures the proportion

of energy used by a company that comes from renewable
sources. Carbon Footprint: Measures the amount of
greenhouse gases emitted by a company or supply chain,
including emissions from production, transportation, and
disposal.
In addition, there are tools and standards to give you an overview of the various options currently available to
anyone interested in measuring an organization's progress towards a circular economy business model like
Circle assessment, Circularity Gap Metric (launched by Circular Economy, 2017, 2020 respectively), Circular
Transition Indicators (CTI) (launched by WBCSD supported by KPMG, 2020), Circulytics (launched by Ellen
MacArthur Foundation, 2020), CIRCelligence (launched by Boston Consulting Group, 2020), …
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Upcycling refers to the process of

converting waste materials or
discarded products into new,
higher-quality products. The aim
of upcycling is to extend the
lifespan of a product and to create
new value from waste material.
The result of upcycling is a product
that has a higher value or utility
than the original waste material.
Upcycling is seen as a more
sustainable practice because it
helps to reduce waste, conserve
resources, and create new value
from discarded products.
Downcycling, on the other hand,

refers to the process of converting
waste materials into new products
of lower quality and value. The
result of downcycling is a product
with a shorter lifespan and less
value or utility than the original
waste material. The process of
downcycling is less sustainable
because it generates more waste
and contributes to the depletion
of natural resources. Downcycling
is seen as less sustainable because
it leads to the further degradation
of resources and the generation of
more waste.
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IV. Circular Supply Chains

framework
Life Cycle Assessment (LCA): Life Cycle Assessment (LCA) is used to
measure and interpret the environmental flows to and from the
environment (including air emissions, water effluents, solid waste,
and the consumption/ depletion of energy and other resources),
over the lifecycle of a product or process. (Source: www.IMOA.info).
LCA divides the world into a technosphere and an ecosphere.
The technosphere can be understood as everything that is

intentionally “manmade” and also includes processes that are
natural in origin, but manipulated by humans, such as
photosynthesis when part of an agricultural system. All unit
processes of an LCI model belong to the technosphere.
The ecosphere is
sometimes referred
to as “the
environment” or
“nature” in layman’s
terms and can be
understood as
everything which is
not intentionally
“man-made”.
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BUSINESS MODELS and RELATIONSHIPS
Sharing and Contracts and Recover,

exchange services recycle, reuse
Circular Product Process Circular

inputs design design flows
Recycled Use less Use less Reuse

Renewable Use it more Waste = food Remanufacture
Safe and secure Use it again Renewables Recycle
Enablers and accelerators
Biomimicry Product stewardship Technology

Green chemistry Collaboration and digital
Systems thinking Certification
SOURCE: © Catherine Weetman
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This means designing the product to use sustainable

resources in its bill of materials. These should be safe, non-
toxic, renewable and preferably recycled. Specifying
Circular inputs
potential substitute materials could reduce the risk of future

supply shortages, improving security of supply.
Major companies are rethinking material inputs, seeing the
benefits of securing key resources, improving brand
perception, and reducing supply chain risk. A focus on ‘safe’
inputs is important – eliminating pollution and toxins along
the supply chain, improving conditions for processors,
communities, users, recyclers and, of course, living systems.
Good design should aim for durability, enabling the product

to last longer for its first and subsequent ‘lives’ (or use cycles)
and so that it can be used again, easily repaired and
effectively end-of-use disassembled for remanufacture and
recycling. Design should enable and encourage circular flows
to keep the product, parts and materials circulating at the
highest value, for the longest period. Design should simplify
disassembly at the end of each use cycle to enable easy
Product design
access to future resources.

Many strategies have been incorporated into product design
and use to ensure that waste is inevitable, such as planned
obsolescence, limited access to tools for repairs, and use of
cheap materials. All these strategies ensure that the
consumer will have limited access to the product in use and
will eventually require a replacement.
The manufacturing process should include planning circular
flows to safeguard ‘nutrients’ for future use. Processes should
minimize resource use, both for materials and for process
inputs including energy, water and other process aids that
become embedded resources in the product.
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We can benefit from ‘enablers’ and ‘accelerators’,

along the entire value chain. Enablers include ‘green
chemistry’ to improve material choice or help
Enablers and
accelerators
develop by-products, biomimicry approaches for

product design and material selection, open sourcing
and systems-thinking approaches. Technology
includes cloud computing, the internet of things and
sensor technologies, big data, 3D printing, mobile
apps and sharing platforms, and mobile internet.
Product stewardship approaches are helping to

accelerate the transition. Examples include product
Product design
life-cycle assessments, ethical standards and

certifications, and better understanding of resource
footprints and sustainable material sources.

Collaborative industry sector initiatives such as the
Round Policy and legislation is useful too, with
governments introducing product stewardship or
extended producer responsibility rules and taxes, and
finding ways to make businesses pay for externalized
costs such as pollution.
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V. Example
Kalundborg is a city of around 20,000 inhabitants located in a
Danish fjord at about one hundred kilometers from Copenhagen. It
is an important harbor for Northern Europe. It is often considered as
a model by the academic world, and has become a major reference
point in the implementation of circular supply chain.
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VI. Socio - economic

relevance
1. The market potential of the trend
There has been an equally noticeable increase in the development
of circular economy policy strategies and initiatives across all tiers
of government — examples include the European Commission’s
Circular Economy Action Plan, the African Circular Economy
Alliance, and the Latin America and the Caribbean Circular
Economy Coalition.
These four clear and overwhelming trends demonstrate this

growing demand for the circular economy:
Reuse is on the rise, a surge in popularity of reusable bags,
bottles, and containers. Clothing resellers such as The Real Real
(www.therealreal.com) and reusable packaging such as Loop
(www.terracycle.com) have investors placing big bets on
customers’ interest in reusable goods.
Handmade is making waves. The maker and craft movements
shown on sites like Etsy (www.etsy.com) and Uncommon Goods
(www.uncommongoods.com) demonstrate the increasing
popularity of handmade and salvaged materials.
Piles of plastic proliferate. Municipalities are up to their eyeballs
in plastic waste and are finally taking steps to mandate its
reduction. From plastic bag bans to plastic packaging
elimination, they are regulating manufacturers in new ways to
limit the amount of plastic waste and expand materials
management.
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2. Companies active within the inner loop of the

circular supply chain.
Companies active within the inner loop of the circular supply chain
are those that focus on creating closed-loop systems for the
production and consumption of goods. This loop refers to the
circulation of products, materials, and resources within the supply
chain without generating waste. Companies active in the inner loop
of the circular supply chain prioritize recycling, remanufacturing,
and refurbishment to minimize the extraction of new raw materials
and to reduce waste.
3. The creation of new markets and jobs

New markets can be created through the development of
innovative products and services that are based on the principles of
circularity, such as product-as-a-service models, closed-loop supply
chains, and refurbished products. These new markets can provide
opportunities for businesses to differentiate themselves and to
increase their competitiveness.
Additionally, the circular supply chain can create new jobs in areas
such as recycling and waste management, remanufacturing, and
refurbishment. These jobs can range from manual labor positions
to highly skilled technical roles. The circular supply chain can also
create jobs in the development and deployment of new
technologies, such as those related to the circular use of materials,
the closed-loop management of waste, and the circular design of
products.
Overall, the circular supply chain has the potential to create new
markets and jobs, drive economic growth, and promote a more
sustainable and circular economy.
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CHAPTER 3
Supply Chain
Management in
the era of Circular
Economy
Building CSC
I. Circular Economy
The Earth on which we live has only a finite number of
resources. Advances in technology and professions have now
ensured that we use these resources in all aspects of our daily
lives. The process of exploitation and use does not stop, it
happens continuously and more and more in parallel with our
increasing needs in both life and production. These resources
are gradually being depleted and at some point will no longer
exist.
Consumption and disposal of

raw materials is increasing
worldwide, despite the
comments of researchers and
governments about the
unsustainability of the "take-
make-waste” model of linear
economic expansion. The
unsustainability is not only in
terms of the environment, but
also in terms of economic
security and inclusion. To
achieve better sustainable
development, much attention
Circular Economy
and research has been
devoted to the circular
economy, which allows to
reduce resource extraction and
waste generation.
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Nowaday Linear supply chains of all manufacturing sectors

(agriculture, industry) are depleting the world's finite resources.
>100 million tons

raw materials are mined,
every year
Industrial production wastes

3 times more resources
than in 1970 (IRP)
Estimated that by 2025
2/3 of the world's population

will be a shortage of clean water
Linear Economy
The circular economy encourages the continuous reuse of

materials to reduce waste. It can be said that the circular
economy creates new value based on what was previously
considered waste. Although the circular economy or the loop
economy is a concept originally developed in 1976 by Walter
Stahel (Geneva), the possibility of fully applying this concept is
still being constantly researched to be put into practice.
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There are not many

countries in the world
that seriously pursue and
achieve achievements in
the Circular economy,
such as Sweden, the
Netherlands, France,
Germany, Canada, the
US, China, Japan, Korea
and Singapore…
However, in fact, in recent years, major economies such as China

and the European Union have implemented The Circular Economy
(CE) to solve resource scarcity and environmental problems related
to economic development. According to the World Bank (WB), the
countries of the European Union have been the global leaders in
accelerating the transition to a Circular Economy.
Total material usage

has decreased by 9.4% in two decades
The share of resources obtained from recycled waste
has increased by nearly 50%
Looking at the developing countries of the world, where the
economy is heavily focused on exporting raw materials to
industrialized countries, the transition to a circular economy creates
many risks related to trade for these countries. One of the
important reasons may be that the economic costs arising from the
decoupling between economic growth and raw material use can
hardly be offset.
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II. SCM in CE
1. Overview
At first glance, there is no noticeable
difference between a traditional
supply chain and a circular supply
chain (CSC) because they are both a
linear chain from the supplier,
manufacturers and distributors to
end users. However, in research and
practice, there are two fundamental
differences between them: Product
design and Collection.
Collection Product design

In terms of the collection of various While most products on the
used and recycled technical and market today do not have
biological goods, the usual linear specific regulations on how
structure of the supply chain is long they will last, in a circular
transformed into a web as complex economy, products are
as a spider's web. Traditional, linear expected to last longer by
supply chains move the typical flow redesigning it. Along with that,
of goods: starting with suppliers, after the product's life cycle is
flowing to manufacturers, complete they will be
distributors, and consumers. But reprocessed in some way. The
more complicated than that, the circular economy also allows
circular supply chain has many routes most goods to be shared
between each of these. For example, (especially capital goods),
consumers and suppliers can contact which increases their usage.
each other directly to return That is, to provide the same
packaging for recycling or any other level of service, the media
party in the supply chain. So here, the economy will have to demand
circular view of the supply chain more goods than the circular
emphasizes the role of reverse economy.
logistics in maintenance, reuse,
remanufacturing, recycling.economy.
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2. Example of Supply Chain in CE: Patagonia

Fashion is the second most polluting
industry in the world after the oil industry.
The operating structure of the fashion
industry has created its own serious
problem for the environment: the
continued growth and planned
obsolescence of products. In contrast to
fashion industry,
the fast fashion industry, where
where their
their business is based on the
taste of cheap prices and fashion trends change 52 seasons of the
year, there are businesses that pursue slow fashion, responsible
fashion and still make money. Among them, Patagonia is known as
the only major player in the fashion industry that lives and
breathes in circularity.
Sourcing in a responsible way in today's sustainable economy is not

simply about having a line of 'ethically sourced cotton' each year -
it's about true sustainability and even circularity. Patagonia
generally innovates incrementally on recycled materials in-house,
and screens the market for radical new materials that they can
employ. Patagonia applies its own principles in the selection of
production materials so that the products can last longer and the
recycling is not limited. Since its founding in 1973, Patagonia has
used a variety of materials entirely. Among them, lyocell yarn, which
is made from wood from responsibly-managed forests and recycled
cotton, is rated the best for not only reducing but also redirecting
waste out of the waste. stream. Not only that, but it seems that any
material can become an inspiration for Patagonia to turn them into
a sustainable fashion piece: Synchilla fleece from recycled plastic
bottles, apparel material from discarded fishing nets or recycled
material from the customer on their Worn Web.
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CHAPTER 4
Building Circular
Supply Chain for a
Circular Economy
Building CSC
Building a circular supply chain for a circular economy requires

the following steps:
Step 1: Assess the Step 8: Continuously

Current Supply Chain Monitor and Improve
Step 2: Set Goals Step 7: Foster

and Objectives Collaboration
Step 3: Engage Step 6: Develop

Stakeholders Circular Metrics
Step 4: Adopt Circular Step 5: Implement

Design Principles Product-Service Systems
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Building CSC
Step 1: Assess the Current SC

The first step is to conduct a thorough, in-depth assessment of the
supply chain to identify areas for improvement and areas where circular
principles can be applied. There are a number of keys areas of supply
chain assessment:
Data Every supply chain assessment should firstly begin with a
detailed examination of the existing data practices. A
successful circular supply chain is heavily dependent on the
organization collecting and producing the most relevant
data.
Analytics Once you’ve collected and stored your data, the next thing
you’ll want to do is analyse it. This requires your company to
have the right analytical capabilities. Ultimately, it’s no good
merely having data if you’re unable to extract the valuable
insights needed from it.
Decision Supply chain management teams are faced with a number of
making decisions on a daily basis. Certain situations arise – whether
it’s a scheduling issue related to new customer orders or a
change in material planning – and good decision making is
required.
Automation Moreover, it’s also worthwhile considering the possibilities of
automation whilst carrying out your supply chain assessment.
Quite simply, supply chain processes can be greatly
streamlined with the introduction of automation. Automation
– when successfully implemented – will mean that less time is
spent doing simple, everyday tasks; instead, the most
valuable work will receive the time it requires.
Develop a With all of these elements of supply chain assessment in
road map mind, the last step is creating a road map. A road map is a
strategic plan that comprises all the major steps or
milestones needed to reach the defined business goals.
Developing a road map will enable you to clearly visualize the
direction in which your company intends to travel, with
regards to its supply chain.
37
Building CSC
Step 2: Set Goals

and Objectives
Establish clear goals and objectives for the circular supply chain,
such as reducing waste, increasing resource efficiency, and
reducing greenhouse gas emissions.
Step 3: Engage stakeholder

Engage all stakeholders, including suppliers, producers, retailers,
and consumers, to create a collaborative and supportive
environment for the circular supply chain. Stakeholder
engagement helps organizations to proactively consider the needs
and desires of anyone who has a stake in their organization, which
can foster connections, trust, confidence, and buy-in for your
organization's key initiatives.
Step 4: Adopt Circular

Design Principles
Design products with circular principles in mind, such as cradle-to-
cradle design, using sustainable materials, and designing for
disassembly and recycling.
Step 5: Implement
Product-Service Systems
Implement product-service systems, where a product is provided as
a service rather than sold, allowing for more efficient use and
management of resources.
38
Building CSC
Step 6: Develop circular

metrics
Develop metrics to measure the success of the circular supply
chain, such as the amount of waste diverted from landfills, the
amount of energy saved through recycling, and the reduction in
greenhouse gas emissions.
There is no exact number of circular metrics as new metrics are
continuously being developed and old ones are refined. However,
some commonly used circular metrics include:
1. Circularity Index 6. Material Utilization Rate
2. Material Recycling Rate 7. Renewable Energy Use
3. Carbon Footprint of Products 8. Water Footprint
4. Waste Reduction Rate 9. Life Cycle Assessment (LCA)
5. Resource Efficiency Rate 10. Ecological Footprint.
These metrics can be used to evaluate various aspects of a circular

economy, such as resource use, waste generation, and
environmental impact. The choice of metric will depend on the
specific sustainability goals of an organization or community and
the data that is available.
39
Building CSC
Step 7: Foster Collaboration

Foster collaboration between all players in the supply chain,
encouraging the sharing of information and best practices.
Encourage data sharing:

In the current age, data has become important for the survival of
any business. Even the supply chain of an SME generates and
manages a large amount of data. Data-sharing is a fundamental
element of strong supply chain collaboration since it provides
end-to-end supply chain visibility. However, data-sharing in
supply chains is challenging.
Manage your supplier network:

Improving the sup-
plier network is an Foster mutual understanding
important part of
effective supply chain Be proactive
collaboration:
Measure and No effort is successful until its success is

improve: measured. To ensure successful collaboration,
supply chain managers need to work together
with their internal and external stakeholders
to set relevant KPIs.
40
Building CSC
Step 8: Continuously Monitor

and Improve
Continuously monitor and improve the circular supply chain,
incorporating feedback from stakeholders and adapting to
changing circumstances.
By following these steps, companies can build a circular supply

chain that minimizes waste, maximizes resource efficiency,
and creates a more sustainable future for our planet.
41
CHAPTER 5
Circular Supply
Chain & Other
Concepts
Building CSC
Circular Economy and

Sustainability
In time past, the research domains of sustainable supply chain
management and circular economy were regarded as separate fields
without distinct interrelationships and correlations. This trend has
changed in recent times with the popularity of scholarly articles that
integrate circular economy principles into sustainable supply chain
management.
1. Similarity
Even though there are certain differences between these two
approaches, circular economy and sustainability in the supply chain
still share some common characteristics. Circularity contributes to a
more sustainable world, but not all sustainability initiatives
contribute to circularity. Circularity focuses on resource cycles,
while sustainability is more broadly related to people, the planet
and the economy. Circularity and sustainability stand in a long
tradition of related visions, models and theories.
2. Differences
A crucial difference between the two concepts that is often
reported or implied in the literature is that CE does not take into
account the social dimension, which is, however, one of the main
components of sustainability.
Moreover, research scholars opine that sustainable supply chain
management can result in an incremental shift toward “weak
sustainability” since it solely concentrates on resource efficiency.
Contrarily, the circular economy emphasizes a radical shift to
“strong sustainability” through reducing the rate (reuse, repair and
remanufacture) and closing (recovery and recycling) resource loops
with the purpose of preserving raw materials and product
components at their maximum value and utility.
43
Building CSC
3. The overlap between Circular Economy and

Sustainability
Sustainable supply
Context Circular economy
chain management
Sustainability
Weak sustainability Strong sustainability
Paradigsm
Levels of change-
organizational Incremental Radical
and societal
Cleaner production Industrial symbiosis

and resource and shared
efficiency consumption patterns
Principles Closed loop supply Circular business
chains models
Open loop supply Open loop supply
chains chains
Increased sustainability orientation
The overlap between sustainable supply chain

management and circular economy.
44
Building CSC
4. Methodological Framework of Analysis

Many frameworks have been used in order to analyze existing
literature for CE and S.
a. Research Framework
This hybrid methodology was designed based on techniques such
as bibliometric, narrative literature review, and typology in order to
analyze the existing literature of CE and S with the intention to
identify and describe new directions for future research.
The methodology consisted of four main steps (Fig. 1). The first step
emphasizes on gathering and selecting the necessary literature by
setting specific and useful criteria to choose scientifically accepted
databases. The second step provides a concrete framework to
present and analyze the selected articles and the next step makes
efforts to examine the existing trends and the contribution of this
literature to CE and S issues. The final step provides the
opportunities for future research in the field of CE and S.
Criteria selection
Step 1
Literature selection Databases
selection
Micro-level
Meso-level
Macro-level
Step 2
Framework analysis
Engineering/Natural-
based Science
Management/Economic-
based Science
Step 3 Step 4
Existing trends Future trends
45
Building CSC
b. Data collection
Context of analysis: The analysis of the selected articles is based on a
triple-level context and two academic fields. In particular, the triple-
level context consists in the micro, meso, and macro levels of analysis
and the academic fields are associated with economic/management
sciences (e.g., economic, management, and social fields) and
engineering/natural sciences. Additionally, this analysis tries to
provide a common and different ground of analysis regarding CES.
Existing trends and future opportunities:

This section highlights some of the most important developments in
the present CE and S literature. It is divided into two parts. The first
section evaluates existing patterns in the current literature using the
hybrid technique. First, the engineering/natural sciences and
economic/management sciences journals with the most published
papers in CE are highlighted. Second, a bibliometric study of the
three levels of CW (micro, meso, and macro dimensions) was
performed, and third, visual typologies were proposed to examine
the key points of CE for each level. Finally, a table of major study
findings is provided.
46
Building CSC
Circular Economy and

Reverse Logistics
The circular economy is presently an important issue in the
manufacturing sector, and its interest has grown in recent years among
industries and academic scholars alike. The emerging markets that are
economically considered as developed are constantly promoting the
implementation of a circular economy in their companies. For instance,
it has been proposed in a prior published study that transforming the
linear model of the value chain (i.e., take-make-dispose) process to the
circular supply chain is carried out by integrating reuse,
remanufacturing, and recycling processes.
Nevertheless, to effectively manage the circular economy-oriented value
chains, the organization needs to enhance the management of the
recovery and remarketing operations that are supported by the “Reverse
Logistics” program.
1. Similarity
The circular economy and reverse logistics concepts have a similar
orientation, for example, both concepts are concerned about
environmental and economic improvements. Nevertheless, the circular
economy concept is more broadened than the reverse logistics concept
since it not only concentrates on the reverse aspects but also on the
forward aspects of the supply chain, which involves the newer materials.
2. Relationship
Reverse logistics in the circular economy is the process of collecting and
aggregating products, components or materials at the end-of-life for
reuse, recycling and returns. Reverse logistics, also referred to as
“aftermarket supply chain”, closes the loop. Take-back programs,
warranties and product defect returns all require reverse logistics to get
the product from the consumer back to the manufacturer. In conclusion,
reverse logistics is a strategic tool for implementing the circular
economy’s strategic vision.
47
Building CSC
3. Importance of Reverse SC to an effective CE

Reverse supply chains play an important role in a circular economy
especially in "closing material loops" for recycling, reuse, repair,
refurbishment and remanufacturing. They are necessary to collect end-
of-life products, to channel them to recovery facilities for sorting and
processing, and to redistribute products and materials for a second life.
Furthermore, upstream efforts to "extend material resource loops" such
as eco-design to make products last longer and phase out hazardous
substances are also conducive in establishing reverse supply chains to
close the loop.
Schematic of cross-border reverse supply chains

for a resource efficient and circular economy
A question arises on the extent to which international trade in end-of-life

products would contribute to a resource efficient and circular economy
transition. Some studies point to a possible contribution of international
trade in end-of-life value chains for better use of material resources.
Businesses have suggested that trade is necessary to scale up circular
business models that involve reverse logistics of end-of-life products
across borders. The OECD workshop on international trade and circular
economy in 2020 highlighted that trade is essential to accumulate
sufficient end-of-life products and materials and to help achieve
economies of scale and make circular business activities viable (OECD,
2020; Business at OECD, 2020). For example, this may include circular
business models such as processes to achieve high quality material
recycling or remanufacturing operations that can involve reverse
logistics in end-of-life products.
48
Building CSC
4. Methodological Framework
The ReSOLVE conceptual framework is characterized by the
circular economy-based business model and development
strategies. The ReSOLVE conceptual framework comprises six
strategies namely (i) Regenerate, (ii) Share, (iii) Optimize, (iv) Loop,
(v) Virtualize and (vi) Exchange.
The management of end of life products is critical to addressing the
principles of circular economy. Several methods have been
recommended to determine how introducing end of life products
into a closed-loop production system could result in benefits to
manufacturers. The most cost-effective practice is the product's
reuse, followed by refurbishing, recycling and remanufacturing.
Products disposal is the least beneficial of all the options since no
value is recovered when materials/products are landfilled. While
remanufacturing and reuse operations prevail in closed-loop supply
chains, recycling operations operate in open-loop systems where
end of life products are delivered to different organizations from
those that are developed originally.
49
Building CSC
5. Conclusion
Within this context, reverse logistics has become one of the
significant competencies of the modern supply chain, where
products not only flow from producers to customers (downstream)
but also from customers to producers (upstream). Unlike traditional
linear logistics from producer to customer, reverse logistics refers to
the reverse flow that-combined with linear logistics – determines a
closed-loop supply chain. Indeed, reverse logistics is regarded as a
major issue for enterprises due to the necessity of managing every
single stage in which products are handled and distributed toward
producers, with multiple recovery options, which has led to a
considerable number of uncertainties for companies. Reverse
logistics is considered a key component of the circular economy
since the circular economy would not be possible without the
reverse flow-enabled by reverse logistics of end of life products and
components essential for their recycling or regeneration.
50
51
REFERENCE
https://www.researchgate.net/publication/236681100_Supply_Chain_M
anagement_in_the_Global_Context
https://www.econstor.eu/bitstream/10419/59779/1/329895168.pdf
https://www.researchgate.net/publication/306344847_Circular_Econo
my_Industrial_Ecology_and_Short_Supply_Chain
https://www.forbes.com/sites/connieguglielmo/2013/08/07/used-
smartphone-market-poised-to-explode-apple-iphone-holding-up-
better-than-samsung-galaxy/#1948ccb4ccd9
http://bmktcn.com/index.php?
option=com_content&task=view&id=8145&Itemid=154
https://www.sciencedirect.com/science/article/pii/S1366554522002885
https://news.ewmfg.com/blog/building-a-circular-supply-chain-for-a-
circular-economy
https://www.researchgate.net/publication/350569755_Circular_Econo
my_and_Sustainability_the_Past_the_Present_and_the_Directions
https://www.circulareconomyasia.org/reverse-logistics/
https://www.oecd-ilibrary.org/docserver/6ab6bb39-en.pdf?
expires=1675435783&id=id&accname=guest&checksum=55A6A4989F6
D558C85F5C9CEFCC84157
Weetman, C. A Circular Economy Handbook for Business and Supply Chains: Repair,
Remake, Redesign, Rethink; Kogan Page: London, UK, 2017.
Kyle J. Ritchie, Eric Corey Freed - Circular Economy For Dummies-For Dummies (2021)
Circular economy, industrial ecology and short supply chain-Wiley-ISTE
Life Cycle Assessment Theory and Practice-Hauschild, Michael, Olsen, Stig Irving,
Rosenbaum, Ralph, Springer Verlag (2017)
Stansbury, Susan - Extended Producer Responsibility-iSmithers Rapra Publishing (2012-
04-04)

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ABOUT LSC 2

Coming back with Season 6, the competition will bring

Therefore, bringing both overall and detailed views the major

With careful research and preparation, SCMission Contest

I. Circular Economy ....................................................................... 30

In 2022, the world will not only continue to suffer the

In the "age" of COVID-19, seaport congestion, increased time

COVID-19 has prevented the flow of goods and services from

However, in some other areas of the world, the Covid-19

More than 169

Although chip shortages and supply bottlenecks have begun to

On the downstream side, although the strong development of

Especially, the rapid spread of

The United States is a country that is relatively dependent on

II. Russia - Ukraine war

Russia and Ukraine are two major suppliers of metals (copper,

The issues unfolding today raise a lot of thought: is the current

A circular supply chain is a closed-loop system where waste

From linear to circular supply chain

I. Technical materials and

Materials used in the

Can be regenerated or grown from Finite and cannot be

as a strategy to maximize the value energy, and the

Biological materials Technical materials

The circular economy focuses on The circular economy

II. Key Circular Supply

Extended Producer Responsibility (EPR) means that recycling,

III. Key Circular Supply

Product-as-a-Service: A business model where a company

Circular Metrics: measure the success of a circular supply

Material Circularity Index (MCI): Measures the extent to

Product Lifetime Extension (PLE): Measures the extent to

Renewable Energy consumption: Measures the proportion

Upcycling refers to the process of

Downcycling, on the other hand,

IV. Circular Supply Chains

The technosphere can be understood as everything that is

BUSINESS MODELS and RELATIONSHIPS

Sharing and Contracts and Recover,

Circular Product Process Circular

Recycled Use less Use less Reuse

Enablers and accelerators

Biomimicry Product stewardship Technology

SOURCE: © Catherine Weetman

This means designing the product to use sustainable

potential substitute materials could reduce the risk of future

Good design should aim for durability, enabling the product

access to future resources.

We can benefit from ‘enablers’ and ‘accelerators’,

develop by-products, biomimicry approaches for

Product stewardship approaches are helping to

life-cycle assessments, ethical standards and

VI. Socio - economic

These four clear and overwhelming trends demonstrate this

2. Companies active within the inner loop of the

3. The creation of new markets and jobs

Consumption and disposal of

Nowaday Linear supply chains of all manufacturing sectors

>100 million tons

Industrial production wastes

Estimated that by 2025

2/3 of the world's population

The circular economy encourages the continuous reuse of

There are not many