1. Introduction

The United Nations (UN) World Commission on Environment and Development defines sustainable development as a trajectory where future generations are secured the same level of welfare as present living generations (1). The economic implication of this approach is a requirement for constant and regenerative utility (2). The global middle class is estimated to double in size to nearly five billion by the year 2030 (3). As the number of middle-class consumers increases, natural resources required to support population expansion are rapidly decreasing (4). In addition, the waste generated by first world economies is estimated to be 3.5 million tonnes per day; the amount of waste generated will grow proportionately with the number of middle-class consumers throughout the world (5), approximately 2 billion tonnes of solid waste are produced each year by the world’s cities, roughly half of which is organic waste (6). Thus, strategies that support sustainable industrial initiatives to emphasise the reclamation and retransformation of resources need to become more ubiquitous in order to support global population growth and subsequent increases in consumption.

The European Union (EU) recently set a strategy to transition towards a CE by adopting a ‘closing the loop’ approach to industrial production systems. One of the goals of this strategy is to maintain the value of products, materials and resources in the economy for the longest time possible, in consideration of waste minimisation (7).

CE is a regenerative approach to sustaining consumption requirements while preserving natural resources (8) and can be defined as “a regenerative system in which resource input and waste, emission, and energy leakage are minimised by slowing, closing, and narrowing material and energy loops. This can be achieved through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling” (9). For any given organisation, adopting a CE approach entails incorporating strategies, policies and processes that consider environmental performance, waste reduction and efficient consumption across the entire supply chain network (10).

The proper leveraging of technology is already proving to be a necessary condition for developing and sustaining both large and small CE initiatives alike. However, not only is the idea of CE new and somewhat daunting, but the emerging technologies upon which these CE networks will be operated are not well understood even by those who manage today’s linear supply chains. This article introduces CE from a supply chain management perspective and introduces two supporting technologies for the purpose of informing current and future stakeholders about CE technology management.

2. Circular Economy as a Closed-Loop Supply Chain

As the interest surrounding CE continues to grow, supporting supply chain practices are also gaining more attention. From a supply chain perspective, CE is based on many of the same concepts used to employ business-to-business closed-loop systems. These systems are typically in place to support the lifecycle of large or expensive assets such as aircraft and large machinery. Conversely, business-to-consumer models historically employ more linear concepts, where products are delivered to consumers, who then chose if, and if so, how to maintain and dispose of them. In essence, CE is the operationalisation of a business-to-consumer closed-loop supply chain system. As such, there is a lot that can be learned from business-to-business closed-loop supply chain best practices. Such practices include increasing resource reuse throughout the supply chain, increasing resource efficiency, dematerialising waste through resource conversion and slowing the amount of new resources introduced into the system via product life cycle extension (11).

Managers and policy makers are promoting CE as a means of sustainable resource consumption (12). However, the transition from a linear economy to a circular one requires fundamental changes in the way businesses are currently operated (13). While change in itself is often a difficult process to manage, making these changes might be worth the effort in that it can leverage opportunities to introduce new, more sustainable business models.

For example, HP Inc, USA, closed-loop printer ink programmes have reduced waste associated with consumer printing by 67% (14). In addition, Italian fashion brand company Calzedonia Group promotes a recycling campaign that incentivises in-store drop-off of all types of used garments via store credit. These garments are then recycled and, to date, the company has collected over 2 million kg of clothing that has been subsequently recycled (15). In another example, Nestlé, Switzerland, estimates that it produced about 1.5 million tonnes of plastic in 2018. Recognising the negative ramifications of this production, the company announced that it strives to make 100% of its packaging reusable or recyclable by 2025 and has recently begun an initiative to eliminate all plastic straws in its products (16). Those are some of many examples where CE can be implemented to produce a win-win for all stakeholders (i.e. consumers via lower prices; environment via lower resource usage; producer via lower production costs).

Perhaps other organisations can adopt similar programmes that have the opportunity to improve both environmental and economic performance. In today’s technology driven supply chains, the importance of leveraging existing and emerging technologies that help to enable CE cannot be understated. In the next section, two supporting technologies are described as a means to demonstrate the role of technology in making CE a reality.

3. Circular Economy Technologies

Many of today’s CE challenges are driving technological advancements as a means to close the loop and reuse resources. Although there are indeed many challenges to implementation such as motivating new consumption behaviours, redesigning supply chains and revamping regulation, governments and managers alike continue to build and leverage technology to support their CE initiatives. In fact, Korhonen et al. (17) suggest that, when CE processes are effectively combined with appropriate technological innovations, the result has significant positive impacts on several echelons and levels of contemporary value chains. This pairing is proposed to lead to transformation in favour of both the environment and economic growth (18). As such, CE participants require a robust strategy to plan and manage increasing complexity across their supply chain processes that support CE (19).

New technologies will play a prevalent role in CE development (20) and help to shape fundamental strategies for organisations seeking to participate in CE (21). These technological advancements will not only help improve industrial processes and operations, but also help to integrate the critical role of the consumer (22). Two major categories of technological innovation deal with the multidisciplinary problem of plastic manufacturing and recycling and the employment of big data analytics (BDA). The following subsections describe these technologies.

4. The Road Ahead

Here is a summary of key takeaways for managers and policy makers who are new to CE or charged with implementing its concepts:

5. Conclusion

This article introduced CE and discussed two areas of technological innovation that are helping to initiate and support CE initiatives: plastics innovation and big data analytics. Of course, there are several other technologies that are being used to close the supply chain loop and make CE a reality, as also discussed. However, we submit that the technologies discussed herein are representative of extant CE technology management problems in that they both require and facilitate multidisciplinary collaboration, information sharing and the inclusion of relevant stakeholders (especially consumers who are becoming important nodes in the supply chain, rather than the end point of a linear production process).