PwC: How to Build Resilience in Procurement With Circularity
Circularity is increasingly becoming a key influencer of procurement strategies, with interest in the term having grown threefold between 2020 and 2025.
Though the idea of reuse might appear straightforward to the uninitiated, practical application and strategic delivery requires detailed planning and execution.
David Linich of PwC and Tensie Whelan from NYU Stern School of Business have discussed why procurement leaders need to reassess the business rationale for circularity.
"If you've looked at circularity before and it didn't pencil out, it's time to look again," David said on LinkedIn.
The impacts of tariffs
The tariffs introduced under the Trump administration in the US have added a level of unpredictability to global markets.
However, sustainability, particularly circularity, is increasingly becoming part of every company's procurement strategy.
Linich and Whelan suggest: "As a result, many businesses are taking a hard look at material sourcing, product design, manufacturing processes and where goods are sold."
"In turn, that is leading them to re-examine circular business models that focus on putting used products back into new goods, reducing purchases of virgin materials and decreasing waste."
These tariffs were intended to lessen dependence on imports and support domestic industries, revealing the fragility of global supply chains optimised for efficiency rather than resilience.
Implementing circular procurement practices could help mitigate these vulnerabilities by integrating sold products back into local supply chains and reducing risks linked with globalised networks.
What about customer concerns?
According to the PwC 2024 Voice of the Consumer Survey, over 80% of consumers express a willingness to pay a premium for products that are sustainably produced or procured.
Choosing goods that match environmental criteria, such as being made from recycled resources or produced with a lower carbon footprint, can allow businesses to meet these consumer expectations.
Millennials and Gen Z are leading this demand for sustainable goods, indicating a long-term shift in consumer values as these generations continue to mature.
For procurement leaders, adopting circular practices can align with these trends and potentially increase customer retention.
AI and robotics
The implementation of circularity, while historically challenging due to complexity and costs, is being transformed by technological innovations today.
"Now, though, shifting market forces are changing the equation," said Linich and Whelan.
They added: "AI, robotics and other technologies are transforming everything from product development and inventory control to the breakdown, sorting and recycling of used materials."
AI-powered robotics enhances waste sorting with precision and speed, improving the retrieval and quality of recyclable materials.
AI also supports the assessment of large data sets, aiding the design of products that are easier to reuse, repair and recycle, thereby optimising procurement processes and resource utilisation.
Integration of these technologies in procurement can enhance efficiency and contribute to establishing more resilient and sustainable supply chains.
Procurement leaders interested in sustainability are encouraged to review these shifts in circular economy practices, recognising the substantial procurement potential in technological innovation and consumer trends.
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