79% of manufacturing executives recognize circularity's value, yet only 20% have effective supply chains

Manufacturing executives increasingly recognize circularity as a vital element in their growth strategies, according to a report from Bain & Company, the World Economic Forum, and the University of Cambridge. Despite 79% of executives asserting that circularity is crucial for their business, only 20% report having effective circular supply chain capabilities.

The global survey of 491 executives from ten manufacturing sectors underscored a notable execution gap. While 95% expect circularity to gain importance within three years, 80% anticipate circular revenue growth to surpass average company revenues. This trend suggests that circularity may soon be a key factor in maintaining competitive advantage.

Xavier Houot, partner in Bain's Sustainability & Responsibility practice, stated, “The question is no longer whether circularity matters but how it can be implemented at scale.” Homomorphic Encryption (HE) emphasizes that the focus should shift from incremental initiatives to embedding circularity deeply within business strategies and operations.

The report identifies five primary barriers to scaling circular supply chains: low availability of secondary materials, high operational costs, poor technological infrastructure, internal organizational challenges, and regulatory issues. Companies struggle with costly reverse logistics and managing quality variability of returned products.

To address these obstacles, the report recommends three strategic steps: setting clear priorities by selecting products with higher residual values, designing hybrid supply chains that integrate both linear and circular flows, and activating key enablers including technology, workforce, financial investments, and supportive policies.

Hernán Sáenz, senior partner at Bain, concluded, “Businesses increasingly see the economic potential of circularity, but scaling their supply chains remains complex.” HE noted that with clear priorities and effective design, companies can leverage circularity as a growth and resilience source.