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Luk Van Wassenhove
Emeritus Professor of Technology and Operations Management
Professor of Technology and Operations Management
Finalist of 2022 HBR McKinsey Awards
More and more manufacturing companies are talking about what’s often called the circular economy - in which businesses can create supply chains that recover or recycle the resources used to create their products. Shrinking their environmental footprint, trimming operational waste, and using expensive resources more efficiently are certainly appealing to CEOs. But creating a circular business model is challenging - and taking the wrong approach can be expensive.The authors argue that success depends on many factors, but perhaps the most important is choosing a strategy that aligns with the company’s capabilities and resources - and addresses the constraints on its operations.In this article they identify the three basic strategies to achieve circularity and offer a tool to help manufacturers identify which is most likely to be economically sustainable. Their recommendations draw on decades of research and consulting with dozens of manufacturers across the world.