Circular Transformation of Industries The Art of Scaling Circular Supply Chains 2025

Supportive measures like EPR schemes, repair bonuses and recycled content mandates create market pull, while fragmented standards or waste shipment restrictions raise costs.Product fit: Certain products align naturally with specific circular approaches – e.g. copiers or cars with refurbishment, and packaging with recycling. Matching product characteristics (like durability or modularity) with process requirements improves operational success. For example, automotive equipment, particularly equipment with durable cores (e.g. gears, alternators), is well-suited for remanufacturing. Standardized designs, high material value and predictable wear make disassembly and remanufacturing feasible and economically viable. Value creation: Circular models generate value through cost savings, recurring revenues and reduced exposure to volatile raw materials. They open new markets with price-sensitive or sustainability-oriented segments, strengthen customer relationships and enhance brand equity. Capturing residual value from components also improves supply security and resilience. For example, remanufacturing enables a leading equipment manufacturer to capture residual value from returned parts, reduces raw material costs and buffers against supply volatility. Sustainability strategy: Certain circular processes are essential for achieving long- term goals such as carbon reduction or resource efficiency. For example, many car manufacturers demand low-carbon equipment from suppliers, with a key approach being high- recycled-content materials. Emissions, waste and resource impact across the full product life cycle are deciding factors. For example, by reusing parts and minimizing virgin material input, remanufacturing sharply reduces a leading equipment manufacturer’s carbon dioxide (CO2) emissions and resource extraction. This directly supports the original equipment manufacturer’s (OEM) decarbonization targets and their clients’ constraints on life cycle impact reduction. Customer demand: Customer openness to refurbished goods, leasing or take-back programmes, as well as familiarity with circular models, supports uptake and retention. Recurring service models also enhance customer relationships and lifetime value. In particular, customers accept remanufactured automotive parts when backed by warranty and OEM standards. Regulations: Policies can accelerate or constrain circularity. Supportive measures like EPR schemes, repair bonuses and recycled content mandates create market pull, while fragmented standards or waste shipment restrictions raise costs. Staying ahead of evolving rules on repairability, recyclability and product passports enables compliance and first-mover advantage. For example, EU policies promoting waste prevention, repairability and circularity (e.g. the End-of-Life Vehicle Directive) support remanufacturing. Compliance readiness offers early-mover advantages in navigating emerging product passport and recycled content requirements. Competitors: Monitoring competitors helps identify market trends and gaps. Successful repair, leasing or remanufacturing models signal both feasibility and shifting customer expectations. Companies can then imitate or differentiate to sharpen positioning and accelerate capability building. In automotive, for example, remanufacturing is already practiced by key OEMs and tier 1 suppliers, validating market viability. Circular Transformation of Industries 15