67% of companies plan to increase their investment in circularity within the next three years
Paris, January 13, 2025 -In an ever-changing world, France Supply Chain by Aslog and Citwell - a consultancy firm specializing in operations and supply chain transformation - are highlighting the crucial challenges of the circular supply chain and its solutions in a methodological guide. This summary is based on discussions held during collaborative workshops with some twenty companies from various sectors. It is based on practices such as functionality, repair, reconditioning and recycling, with a clear objective: to extend the life of resources while reducing their environmental impact.
The circular supply chain: an essential strategic lever
According to NF ISO 59004, the circular economy adopts a systemic approach aimed at maintaining a continuous flow of resources in the economy. This model supports sustainable development by reducing the extraction of virgin raw materials. ADEME estimates that in France, the consumption of these resources will have to be halved by 2050, from 20 to 10 tonnes per year per inhabitant. In this context, the circular supply chain is an essential strategic lever.
"French and European laws and regulations are increasingly prompting players in a variety of sectors to take concrete steps to extend the life of their products, giving priority to reuse, repair and remanufacturing, far beyond the simple recycling of waste. The Circular Supply Chain thus represents a major evolution in corporate resource management, offering a unique opportunity to reconcile economic performance with environmental responsibility." says Yann de Feraudy, President of France Supply Chain.
A 6-point methodology for a successful transition to a circular supply chain
1 - Model and share value, based on usage
The circular economy redefines the value of products beyond their first use. For users, the aim is to get the most out of products by adopting sustainable solutions such as sharing, proactive maintenance and extending the life of objects. For example, systems such as Vélib' enable optimal use, with some bikes used up to 19 times a day, promoting collaborative and efficient consumption. Our work shows that sharing usage value, including economic value, within the eco-system is key to maximizing usage possibilities over time, by mobilizing the right know-how over time.
2 - Multi-location dimensioning
Designing a master plan for a circular economy requires in-depth analysis of multiple criteria: circularity typology (rental, repair, etc.), business model, volumes, target markets and territories. These factors help to determine the required capacities (production, renovation, storage, distribution). The decision to centralize or decentralize operations will depend on the nature of the products (weight, value, ease of processing) and the regulatory context. Identifying profitability thresholds will help determine the most appropriate locations for each activity.
3 - Managing circularity
Managing a circular supply chain requires new indicators focused on intensity of use:
- Number of cycles: measures the use of a product (e.g. Internet box users) in models based on functionality or rental.
- Return rate: reflects the efficiency of circular flows and their viability, over and above customer satisfaction.
- Quality of returns: evaluate (e.g. Gold/Silver grade) to improve remarketing and optimize processes.
- Cost of refurbishment: a decisive factor for comparing with potential prices and ensuring profitability.
- Size of resource pool: key indicator of available material/semi-finished/product capital, impacting on finance and the environment.
- Impact indicators: include CO2eq, material savings, material footprint, recycling rate, in addition to the classic Service/Stock/Costs.
4 - Forecasts and expenses
Managing a circular supply chain requires planning tools (S&OP, PDP) to integrate multidirectional flows and the uncertainties associated with product returns. The new parameters to be managed include forecasting the pool of returns, managing capacities (machines, skills), and projecting used or reconditioned stocks, which can have a significant impact on the business in terms of costs and logistics.
5 - Operational management, continuous improvement & data
Circularity is based on rigorous traceability, essential for optimizing flows and deposits, and maximizing profitability. Precise tracking of a product's cost and lifespan enables us to adjust strategies, loops and prices. Detailed tracking by product (via a unique identifier) provides key data on usage, reconditioning and breakdowns, helping to optimize product life and positioning. Some models even integrate remote monitoring to collect information in real time. To get started, low-tech solutions can at least initially meet the need to simulate different scenarios.
6 - Organization
Setting up a specific organization dedicated to circular supply chain management is essential, and requires a more flexible and collaborative approach than a linear one. This structure makes it easier to manage the tools, processes and rituals needed to make circularity a success. Coordination between the various stakeholders is also essential to ensure efficient operations, particularly when activities are shared between linear and circular circuits.
Dedicated organization or shared with linear
The question of pooling Supply Chain skills between circular and linear activities arises. Most major circular operations show that circular teams, although often drawn from linear teams, generally belong to a dedicated entity or BU in order to manage specific tools, objectives and rituals. Nevertheless, pooling should be explored to optimize logistics space, production and transport flows.
Centralized or localized organization
Multi-locality is essential, on a regional, national or continental scale. Some activities can be centralized, while others are delegated to localities with greater decision-making autonomy, especially when there are several loops to manage (not on a single loop, like rental).
Pioneers in action with inspiring testimonials
Initiatives by leaders such as Michelin, Rev Mobilités, Orange and Valused demonstrate the tangible benefits of a circular model. Rev Mobilités and Michelin have relied on collaborative models, entrusting local partners with activities such as electrical retrofitting or retreading, while ensuring a fair redistribution of the value generated. Orange, for its part, optimizes the reconditioning of its equipment through continuous improvement of its boxes and ingenious solutions, such as adding stickers to its boxes to reduce repair costs. Epalia encourages pallet reuse with an innovative deposit system that simplifies logistics flows while encouraging sustainable practices. Valused works closely with car dismantlers to align supply and demand by sharing data on market trends and forecasts. In addition, Valused leverages its sourcing, production and customer data to develop environmental, financial andCO2eqindicators.
By placing sustainability at the heart of their strategy, companies are building a resilient and competitive supply chain. This model, a true vector of innovation, meets societal expectations while reducing environmental and economic pressures. "The circular supply chain is not only a lever for environmental and social sustainability, it also represents an opportunity for strategic innovation for companies, by making new business models sustainable. It creates value through optimized use of resources and inter-company collaboration, thanks to the specific know-how of supply chain specialists", emphasizes Anaïs LEBLANC, Executive Partner at Citwell.
About France Supply Chain
The FRANCE SUPPLY CHAIN BY Aslog community works to strengthen the impact of the Supply Chain on corporate competitiveness, and to make it a lever for a more sustainable world. The association brings together 450 French and international companies of all sizes and in all business sectors, as well as Grandes Ecoles and training organizations. This 5,000-strong network of professionals, lecturers and students pools ideas and experience to deliver concrete solutions to supply chain players.
Press contact: Marie-Laure Laville - MLD Consulting - Tel: +33 (0)6 18 14 85 36 - mllaville@mldconsulting.fr
Founded in 2004, Citwell is a multi-specialist consulting firm specializing in operations and supply chain transformation. As a company with a mission and driven by our raison d'être, we aim to have a positive impact on the world. With over 140 certified consultants based in France (Paris, Lyon, Nantes, Lille) and abroad (UK, USA), Citwell supports a wide range of sectors, including pharmaceuticals, healthcare, aeronautics, luxury goods and agri-food. The group currently works with 150 customers, including 10 CAC 40 companies (Airbus Group, Air Liquide, Carrefour, Essilor, a major player in the luxury goods sector, Legrand, LVMH, Michelin, Safran, Sanofi). Citwell's missions focus on accelerating the transformation of corporate value chains, from purchasing or product design to customer delivery. We intervene at both strategic and operational levels, addressing business challenges as well as cross-functional issues such as information systems, digitization of business processes or CSR challenges. Citwell, accelerating transformation
Press contact: Sandrine Arnaud - Agence HL - Tel: +33 (0)6 34 04 52 58 - sarnaud@agencelavarde.com
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