How does servitisation affect supply chain circularity? - A systematic literature review

Purpose The aim of this review is to test the link between servitisation and circular economy (CE) by synthesising the effect of product-service systems (PSS) on supply chain circularity. Design/methodology/approach Following a systematic literature review methodology, the study identified 67 studies and synthesised them using content analysis. Findings – A conceptual model is developed illustrating how PSS business models impact supply chain circularity through increased product longevity, closure of resource loops, and resource efficiency. It also identifies six contextual factors affecting the implementation of supply chain circularity including: 1) Economic attractiveness of supply chain circularity; 2) Firm sustainability strategy; 3) Policy and societal environment; 4) Product category; 5) Supply chain relationships; 6) Technology. Research limitations/implications – The conceptual model proposes that supply chain circularity increases with servitisation. It also proposes that the main circularity effect stems from increased product longevity, followed by closed resource loops, and finally resource efficiency. The model is deduced from the literature by using secondary data. Practical implications – The review provides practitioners with a framework to increase supply chain circularity through PSS business models. It also gives insight into the various contextual factors that may affect how a manufacturer’s servitisation strategy contributes to supply chain circularity. Originality/value – This review contributes to the understanding of the relationship between servitisation and supply chain circularity by synthesising the different effects that exist. Moreover, it creates new knowledge by identifying a range of contextual factors affecting the relationship between PSS and supply chain circularity.

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