Conceptualizing Circular Supply Chains: A Theory Building Approach

Integrating circular economy (CE) principles into supply chains and operations is generating a lively debate among scholars and practitioners. However, while this literature stream is becoming abundant, there are still ambiguities in the adopted terminologies. While the established terms in the supply chain management domain, such as closed-loop and open-loop supply chains, are frequently used in the CE context, the term “circular supply chains (CSCs)” is gaining prominence on its own. Hence, the purpose of this study is to provide clarity on this terminology while conceptualizing CSCs through a theoretical approach. We conceptualized CSCs as complex adaptive systems, with supply chain actors in physical and support supply chains who ensure the flow of products, End-of-Life products and materials, and, at the same time, considering the critiques on CE. We introduce three different CSC archetypes, closed-loop supply chains, open-loop supply chains, and CSCs – combining characteristics of both closed- and open-loop supply chains – aligning these archetypes to the current CE debate. The regenerative and restorative approaches and the application of value retention options – such as reduce, repurpose and recycle – in these archetypes are further illustrated through industrial examples. Other than traditional supply chain actors’ commitment to successfully managing CSCs, collaboration with stakeholders beyond the boundaries of supply chains is crucial. When designing and planning CSCs, it is essential to understand the compatibility among resource flows to ensure improved sustainability. Scholars and practitioners can benefit from this conceptualization by comprehending the potential and boundaries of CSCs. Further, future research and understanding can empirically validate this work.