Value Creation from Circular Economy led Closed Loop Supply Chains: A Case Study of Fast Moving Consumer Goods

Abstract

The role of closed loop supply chains (CLSC) for creating and recovering value is widely acknowledged in supply chain management and there are many examples, mainly in the business-to-business sector, of successful OEM remanufacturing. The integration of value creation and recovery activities into retail customer value propositions is, however, under researched and raises many challenges, especially in Fast Moving Consumer Goods (FMCG) retail where few real world examples have been published. The recent emergence of the term ‘circular economy’ has initiated further debate about closed loop value propositions and closed loop supply chain implications. This paper selects four circular economy-led closed loop product case examples from a major European FMCG company, and assesses, at a high level, how these cases created value, for whom value was created, and key challenges in their implementation. The findings highlight that each case is different. Closing loops and creating successful value propositions is complex and requires simultaneous reconfiguration of key building blocks to ensure customer acceptance and business viability. The paper proposes the term ‘circular supply chain’ for cases where circular economy principles are explicitly incorporated in CLSC for value creation.