A supply chain becomes circular when recovered material is routed back to become tomorrow's input instead of ending as waste.
loop_retention = circularity_rate * chain_connectivity
waste = 1 - retention
- Supply chain nodes — supplier, manufacturer, retailer and recycler nodes in the network.
- Chain connectivity — how well recyclers are linked back into upstream suppliers.
- Circularity rate — fraction of end-of-life material successfully re-entering the chain as feedstock.
- Demand pull — how strongly downstream demand pulls material through the network.
Circular supply chains cut virgin-material demand and exposure to commodity price shocks simultaneously — a double incentive driving corporate adoption.