PwC: How Can Circularity Enhance Manufacturing Resilience?
Circularity has gained momentum in the manufacturing industry, with Google searches for the term increasing substantially between 2020 and 2025.
This shift towards circular practices is driving manufacturers to rethink their traditional processes.
The challenge, however, lies in implementing these circular principles across manufacturing operations.
David Linich, Partner at PwC and Tensie Whelan, Distinguished Professor of Practice at NYU Stern School of Business, emphasised in a recent blog post the evolving business case for circularity.
“If you've looked at circularity before and it didn't pencil out, it's time to look again,” David stated on LinkedIn.
The impacts of tariffs on manufacturing
US tariffs introduced under President Donald Trump's Administration have created a ripple effect globally, leading many businesses in the manufacturing sector to scrutinise their material sourcing, product design and manufacturing processes.
The uncertainty caused by these tariffs has revealed the vulnerabilities of global supply chains designed primarily for efficiency rather than resilience.
“As a result, many businesses are taking a hard look at material sourcing, product design, manufacturing processes and where goods are sold,” write Tensie and David.
This renewed focus on existing strategy is seeing the rise of circular business models, where used products feed back into manufacturing, reducing the reliance on virgin materials and waste.
Furthermore, the tariffs aim to minimise dependence on imports and support local industries, inadvertently pushing manufacturers to explore resilient circular supply chains.
In a circular approach, products at the end of their lifecycle re-enter the supply chain locally, reducing the risks inherent in a globalised supply chain.
Consumer expectations driving change
The PwC 2024 Voice of the Consumer Survey reveals that sustainability is becoming a priority, with over 80% of consumers expressing readiness to pay a premium for sustainably produced goods.
Interestingly, some respondents are willing to spend an average of 9.7% more on products meeting specific environmental criteria, including those manufactured with recycled materials or having a lower carbon footprint.
Manufacturers can leverage this trend, as sustainability-aware consumers scrutinise production methods, eco-friendly packaging and the positive environmental impacts companies are making.
Young demographics like Millennials and Gen Z show a stronger inclination towards these values, indicating a lasting shift as these consumers mature into the primary market audience.
AI and robotics in circular manufacturing
Incorporating advanced technologies into circular manufacturing can ease implementation hurdles that have previously hindered comprehensive adoption.
Discussing these developments, David and Tensie remarked: “AI, robotics and other technologies are transforming everything from product development and inventory control to the breakdown, sorting and recycling of used materials.”
AI-enabled robotics enhances efficiencies by precisely sorting waste streams for recycling, improving the recovery and purity of materials.
AI also supports the design of products that are simpler to reuse, repair and recycle by allowing rapid data analysis.
Additionally, analytics derived from AI can pinpoint inefficiencies within supply chains, optimising resource utilisation and reducing waste.
By embracing circularity with the aid of advanced technologies, manufacturers can not only address the immediate challenges posed by global supply disruptions but also position themselves for sustainability-driven market demands.
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