Managing Circular Material Choices in Practice Trade-offs, Constraints, and Supply Chain Design Impacts

Abstract

Despite growing regulatory pressure and corporate sustainability commitments, circular material adoption in industry remains constrained by operational realities that existing research rarely examines in depth. The transition to a circular economy requires firms to substitute virgin materials with recycled, bio-based, or locally sourced alternatives, yet this transition is not merely a technical or environmental decision. It is a constrained organizational process embedded within existing supply chain structures, cost pressures, and operational requirements. The research investigates how businesses make circular material selection decisions, what trade-offs emerge in the process, and how these decisions influence supply chain design. Using a qualitative, exploratory research design, semi-structured interviews were conducted with professionals from eleven organizations across diverse industrial sectors, including automotive, steel, MedTech, defense, fashion, and energy. Data were analyzed through thematic analysis using an abductive approach, iteratively linking empirical findings to theoretical frameworks from sustainable supply chain management, circular economy theory, decision-making theory, and the resource-based view. The findings demonstrate that circular material selection follows a structured, multi-stage decision process in which technical feasibility, safety, and regulatory compliance function as primary gatekeepers, with sustainability considerations entering the evaluation only after operational thresholds are met. Rather than competing equally with other criteria, environmental objectives are integrated conditionally within an already constrained decision space. Significant trade-offs emerge between circularity and cost efficiency, customer requirements, performance reliability, and supply chain risk, managed through cross functional collaboration, pilot-based implementation, and supplier co-development. Material choices were further found to carry substantial downstream consequences for supply chain structure, driving shifts in supplier networks, reverse logistics integration, geographic sourcing, and traceability requirements. Taken together, these results reframe circular material selection not as a sustainability decision constrained by operations, but as a fundamentally operational and supply chain design decision within which sustainability must find its place.