The Rise of Circular Models and What It Means for Operations
Circularity is no longer a niche sustainability initiative, it’s becoming the new growth model for global brands. From fashion to homeware, companies are redesigning their systems to keep products and materials in use for as long as possible.
We know it’s good for the planet, reducing waste and limiting single-use materials, but it also unlocks financial and operational benefits. Circularity impacts supply chains, cash flow, and business resilience in ways that go far beyond sustainability targets.
In the past few months alone, we’ve seen major signals of this shift, from partnerships like eBay becoming the Pre-Loved Partner for Condé Nast, bringing resale into mainstream fashion, to Reformation launching its first fully recycled sweater collection. We’re also seeing the rise of circular business models, from manufacturing, with Batch.Works 3D-printing products on demand from recycled materials produced locally and only when needed, to repair and care, with The Seam helping people extend the life of what they already own.
And we’re seeing more of these announcements every week, proof that circularity is moving from intention to implementation.
These aren’t just sustainability milestones, they’re operational revolutions. Recent research from McKinsey & Company highlights how circular business models are transforming efficiency across industries.
Why Circularity Matters for Operations
Circularity changes how companies design, source, produce, and recover products. It requires a shift from linear models to systems that are regenerative by design, demanding new supply-chain architecture, data systems, and performance metrics. It also requires shift is ways of working, the operating model!
From an operations perspective, circularity isn’t just good for the planet, it’s good business. It helps to:
Reduce dependency on virgin materials, mitigating exposure to price volatility and supply disruptions.
Increase asset efficiency, keeping materials and products in circulation longer.
Create new revenue streams, such as resale, repair, and take-back programs.
Enhance brand resilience, as regulation and consumer expectations move toward accountability and transparency.
What It Entails Behind the Scenes
Redesigning the Supply Chain
Circular models introduce reverse logistics, collection, repair, recycling, and resale. This demands new processes, partnerships, and infrastructure.
Example: Patagonia’s Worn Wear program built dedicated repair facilities and a reverse-logistics system to process returns efficiently, now a core part of its operating model.
Data and Traceability Systems
To manage circular flows, companies need real-time visibility into what materials are used, where they come from, and how they’re reused. Digital product passports, material tagging, and ERP integration become essential.
Example: Stella McCartney uses blockchain-enabled traceability with partners like Provenance to track materials from farm to finished garment.
Partnership and Infrastructure Readiness
Circularity depends on an ecosystem of recyclers, logistics partners, and refurbishers. Building these networks early determines scalability.
Example: REI’s collaboration with Ambercycle integrates regenerated materials directly into production, cutting reliance on virgin inputs and future-proofing its supply base.
Operational Metrics and Margin Management
Circular operations add new costs, collection, sorting, refurbishment, that must be offset by efficiency gains. Successful operators model full-lifecycle economics, not just first-sale profit.
The New Role of Operations
As circularity scales, operations teams become the architects of resilience, sitting at the intersection of sustainability, finance, and supply chain. They turn circular ideas into measurable, profitable systems.
The message is clear: circularity starts in operations, not in marketing decks.
At The Engine Room, we unpack what operational excellence really looks like behind breakout brands, because growth isn’t magic, it’s method.