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

1 Key takeaways –Operational complexity is the biggest barrier: Companies struggle most with getting products back from customers, dealing with unpredictable quality and quantities and managing reverse logistics. –Profitability remains elusive: Many circular business models face structural cost challenges from reverse logistics, inspection and refurbishment that hurt margins. –Infrastructure and skills gaps limit scale: Most companies lack the reverse logistics networks, repair facilities, digital tracking systems and specialized expertise needed for circular supply chains, while inconsistent regulation creates additional barriers across different markets. While businesses increasingly see the economic potential of circularity, scaling supply chains remains difficult. Building circular businesses requires a complete shift in thinking, and survey results show that supply chain issues consistently emerge as the most pressing barrier. These challenges are not the same everywhere but vary by industry and region. For instance, collection is the hardest step for recycling packaging, while remanufacturing is the most complex yet essential step in the automotive industry. Overall, barriers can be grouped into five categories: operations and logistics, business opportunity and profitability, technology and infrastructure, organization, and regulation – the last being the only external factor.Key challenges: unpredictability, volatility and linear thinking While businesses now see clear economic potential in circularity, many struggle to set up and scale circular supply chains. Five barriers hindering the transition to circular supply chains FIGURE 3 Figure 4 maps the July 2025 survey results. It positions the challenges to circular business models in terms of their frequency and difficulty, identifying which hurdles are most widespread across industries and which pose the greatest threat to scaling. Operational bottlenecks, such as the low availability of secondary materials or used products, varying return quality and complex reverse logistics, are the most common problems. This confirms that day-to- day operational issues are the main obstacle to circular supply chains.Operations/ logisticsBusiness opportunity and profitabilityTechnology, data and infrastructureOrganization Regulation Source: CTI initiative and panel sessions. Building circular businesses requires a complete shift in thinking, and survey results show that supply chain issues consistently emerge as the most pressing barrier. Circular Transformation of Industries 7