Towards the circular supply chain: a literature review of challenges

The notion of Circular Economy (CE) has been arisen as a promising approach to promote sustainability
without compromising economic growth. However, companies who are going to redesign their supply chain to
adopt the CE paradigm face several challenges. Despite their relevance in such an early stage of CE practices
adoption by companies, literature still lacks a systemic and holistic identification of this set of challenges. In fact,
previous research either focused on a particular industrial sector, on a geographical context, on a specific firm
category or by limiting the analysis to only some CE aspect. Therefore, this paper carries out a literature review to
identify the main challenges that companies have to face when they want to redesign their supply chain according to
CE principles, i.e. to implement a circular supply chain. As much as 24 challenges have been identified and classified
in accordance with the life cycle phase(s) affected and the CE lever(s) touched as recognized in literature, i.e. product
redesign, servitised business models, reverse logistics and system enablers (e.g. legislation or digital 4.0 technologies).
Findings highlight the multidisciplinary character of CE, and show that the challenges are quite distributed among
the different life cycle phases, implying that companies who desire to implement a circular supply chain should be
prepared to face challenges related to both the direct and the reverse flows of materials, despite the common
thinking that CE is only related to reverse logistics. Moreover, findings show that a non-negligible number of
challenges arises within each CE lever, thus confirming the need for a systemic and holistic approach. Managers may
use the set of challenges to prevent likely barriers that arise in the transition towards CE.