A recent report from Bain & Company, the World Economic Forum, and the University of Cambridge reveals that while 79% of manufacturing executives recognize the importance of circularity in their growth strategies, only 20% have successfully implemented circular supply chains at scale. The findings, based on a survey of 491 executives across ten industries, highlight a significant gap between recognition and execution.
The report, released on November 12, 2025, indicates that circularity is increasingly viewed as essential for long-term profitability. A striking 95% of executives anticipate that circularity will become critical for their organizations within the next three years. Furthermore, over two-thirds consider it “very important.” Many executives expect revenue growth from circular initiatives to surpass company averages, with 80% projecting higher revenue from circular activities and 70% anticipating increased margins compared to traditional linear approaches.
Xavier Houot, a partner in Bain & Company’s Sustainability & Responsibility practice, stated, “The question is no longer whether circularity matters but how it can be implemented at scale.” He stressed the need for business leaders to integrate circularity into their core strategies, operations, and customer engagement.
Recognizing the barriers to scaling circular supply chains, the report identifies five primary challenges:
1. **Operations and logistics**: Companies face difficulties with the availability of secondary materials, inconsistent product returns, and expensive reverse logistics.
2. **Business opportunity and profitability**: High upfront costs and uncertain demand can hinder profitability.
3. **Technology, data, and infrastructure**: Poor reverse logistics and data systems limit transparency and operational efficiency.
4. **Organization**: Internal skill gaps and resistance can stall progress.
5. **Regulation**: Conflicting product standards and cross-border restrictions create additional complexities.
To bridge the gap and enhance the scalability of circular supply chains, the report outlines three strategic steps:
**Set Clear Priorities**: Companies should focus on products with higher residual values and target customer segments that are receptive to circular offers.
**Design Hybrid Supply Chains**: A combination of linear and circular flows can create more integrated supply chains. The survey revealed that 56% of respondents reported mostly integrated supply chains, while only 5% operate entirely independently.
**Activate Key Enablers**: The report emphasizes four catalysts for scaling circularity:
– Implementing technology and data solutions, such as digital tracking and IoT, to manage unpredictable flows.
– Fostering a culture that incorporates circularity into governance, skills, and incentives.
– Securing financing to cover start-up costs and support long-term returns.
– Advocating for consistent policies and regulations to eliminate market bottlenecks.
Hernán Sáenz, senior partner and chairman of Bain’s Performance Improvement practice, concluded, “Businesses increasingly see the economic potential of circularity, but scaling their supply chains remains complex. Those that set clear priorities and build the right design can turn circularity into a source of growth and resilience.”
This report underscores the significant opportunity for manufacturing firms to embrace circularity and enhance their competitive advantage in an evolving marketplace.