Circular procurement is now a strategic imperative for manufacturers and industrial procurement teams seeking measurable business value and long-term resilience. By integrating lifecycle thinking into procurement decisions, organizations move beyond linear “take-make-dispose” models and establish processes that drive resource efficiency, cost control, and regulatory compliance.
For today’s industrial leaders, circular procurement offers a framework to minimize risk, optimize asset utilization, and achieve ambitious sustainability objectives without compromising operational performance. As global regulations and customer expectations intensify, organizations that implement robust circular procurement practices position themselves to meet new market demands and maintain a competitive advantage.
This guide outlines what circular procurement means for enterprise supply chains, the key principles involved, and best practices for implementation.
What is Circular Procurement?
Circular procurement is a strategic approach that applies circular economy principles to the procurement process, supporting a broader circular supply chain across your organization.. Instead of focusing only on upfront costs or immediate performance, circular procurement evaluates the entire lifecycle of products, materials, and services—from design and production to use, recovery, and repurposing at end-of-life.
The main objective is to maximize the long-term value of resources while minimizing waste, environmental impact, and total cost of ownership. This requires procurement teams to set clear criteria for durability, reparability, and recyclability, specify recycled or renewable content, and collaborate closely with suppliers. Organizations that implement circular procurement strengthen supply chain resilience, reduce risk, and support sustainability targets.
Circular Procurement vs. Traditional Procurement
Traditional procurement focuses on initial price, delivery, and basic compliance. It follows a linear path: extract, manufacture, use, and dispose.
Circular procurement replaces this with a model designed to keep materials in use for as long as possible. This includes specifying products that can be repaired, upgraded, or recycled, partnering with suppliers who offer take-back or recovery services, and integrating end-of-life management into every purchasing decision.
Key Principles of Circular Procurement
Effective circular procurement relies on a set of foundational principles that guide decision-making and drive results across the supply chain.
1. Design for Longevity
Circular procurement prioritizes products and materials engineered for durability, repairability, and ease of maintenance. Selecting equipment with longer lifespans reduces the need for frequent replacement and lowers overall lifecycle costs. Clear specifications for warranties, availability of spare parts, and maintenance support ensure assets deliver value over time.
2. Resource Efficiency
Circular procurement emphasizes maximizing resource use by selecting products with recycled or renewable content and minimizing material waste. By setting requirements for recycled inputs, choosing suppliers who minimize packaging, and evaluating opportunities for reuse or refurbishment, organizations reduce raw material consumption and support more cost-effective operations.
3. Lifecycle Thinking
A lifecycle approach to procurement considers the total impact of products and services—from sourcing and manufacturing through use, maintenance, and end-of-life recovery. This perspective ensures that purchasing decisions account for environmental and financial costs across the entire lifespan, supporting stronger risk management and sustainable value creation.
4. Industrial Collaboration
Circular procurement relies on collaboration across the supply chain to accelerate circular practices. This includes working with suppliers to set circularity goals, co-developing solutions for take-back or remanufacturing, and sharing data to track progress. Cross-functional engagement between procurement, engineering, and sustainability teams ensures aligned objectives and successful implementation.
Benefits of Circular Procurement
Circular procurement delivers measurable value for manufacturers, procurement teams, and industrial buyers. By integrating circular principles into sourcing strategies, your organization can realize tangible business benefits and support long-term sustainability.
1. Reduced Waste and Landfill Cost:
Keeping materials in circulation through reselling and recycling directly reduces landfill use and disposal expenses. This approach minimizes waste and supports more efficient resource management across the supply chain.
For example, John Deere recycled 84% of its total waste in 2022 and continues to expand its remanufacturing programs, aiming to achieve 95% recyclable product content by 2030. These initiatives keep materials in circulation, directly reducing landfill use and supporting efficient resource management.
2. Lower Emissions:
Prioritizing recycled and renewable materials in procurement reduces the emissions tied to raw material extraction and production. This contributes directly to organizational sustainability targets and climate objectives.
Companies implementing circular strategies, such as Caterpillar, have significantly lowered both waste and greenhouse gas emissions through remanufacturing programs.
3. Improved Cost Efficiency:
Circular procurement leads to substantial savings by extending product lifecycles, reducing maintenance requirements, and minimizing the need for frequent replacements. This approach delivers greater value over the full life of equipment and materials.
For instance, NCR faced a critical shortage of components needed to repair their ATMs, some of which had been in operation for over 15 years. By partnering with Amplio and utilizing a trusted secondary network, NCR sourced the necessary parts, ensuring uninterrupted service and saving $75,000 on a single order. This strategic approach not only extended the lifecycle of existing equipment but also exemplified how circular procurement can drive significant cost efficiencies.
4. Greater Supply Chain Resilience:
Sourcing recycled or renewable materials limits exposure to raw material price volatility and market disruptions. Circular strategies help organizations secure more reliable supply chains and maintain business continuity.
Audi’s MaterialLoop program, for instance, enables the company to maintain access to high-quality recycled steel and reduce risk from commodity price swings.
5. Asset Value Recovery:
Surplus and idle inventory can be reused, converting waste streams into new sources of revenue. Circular procurement creates opportunities to maximize asset value and reduce unnecessary losses.
For example, General Motors (GM) remanufacturing program sold over 700,000 remanufactured parts in 2023, enabling the company to recover value from end-of-life assets and significantly reduce waste to landfill.
Circular Procurement Best Practices
Adopting best practices in circular procurement enables manufacturers and procurement teams to capture tangible business value, improve supply chain resilience, and advance sustainability goals. Focusing on the following actions will help your organization build an effective and scalable circular procurement strategy:
1. Conduct lifecycle and circularity assessments
Evaluate the total impact of products and suppliers—not just on price and performance, but on durability, material composition, and potential for reuse or recycling. Lifecycle assessments provide the data required to make informed circular procurement decisions that support long-term value creation and resource efficiency.
2. Require Relevant Certifications and Standards
Select suppliers who can demonstrate their commitment to the circular economy through recognized certifications, such as ISO 14001 or Cradle to Cradle. These standards assure that suppliers meet high benchmarks for environmental management, product circularity, and responsible sourcing.
3. Embed Circularity into Specifications and Contracts
Integrate clear requirements for durability, reparability, recycled content, and end-of-life recovery into your procurement documentation. By formalizing these criteria in contracts and technical specifications, you establish a consistent standard for all suppliers and reduce the risk of non-compliance.
4. Circular Economy Partners
Establish strategic relationships with organizations across the circular economy, including suppliers, recyclers, remanufacturers, technology providers, and logistics firms. Collaborating with a network of trusted partners provides access to closed-loop solutions, shared resources, and innovative practices that accelerate the adoption of circular procurement across your supply chain.
5. Set and Track Measurable KPIs
Define clear metrics for circular procurement, such as the percentage of recycled content, waste diverted, or products recovered at end-of-life, and monitor progress using digital procurement tools and supplier scorecards. Tracking performance against these KPIs ensures accountability and highlights opportunities for continuous improvement.
6. Build Cross-Functional Alignment
Ensure procurement, engineering, and sustainability teams are aligned on circular procurement principles through targeted training and ongoing collaboration. Cross-functional alignment helps embed circularity into every stage of the sourcing and procurement process.
7. Engage in Regular Supplier Reviews
Maintain open communication with suppliers to identify innovation opportunities, address barriers to circularity, and drive ongoing improvement. Regular reviews create a feedback loop that helps your organization adapt to changing market conditions and regulatory requirements.
Amplio’s Support for Circular Procurement
Amplio empowers manufacturers by functioning as their procurement teams to advance circular procurement objectives through a streamlined, data-driven approach to surplus and idle asset disposition. By connecting organizations with accredited industrial buyers and sellers, Amplio ensures that equipment and materials retain value and remain in productive use across the industrial ecosystem.
With Amplio, your team benefits from:
- A trusted network of industrial buyers and recyclers: Accelerate recovery of value and reduce waste by aligning surplus assets with qualified industrial end users and remarketing opportunities.
- Data-driven asset appraisal: Leverage proprietary technology and real-time market intelligence for accurate valuation and optimal routing for resale, refurbishment, or recycling.
- Compliance support: Access guidance around regulatory requirements and secure data management to reduce administrative burden and risk.
- Transparent reporting: Obtain clear documentation and performance metrics to support sustainability reporting and demonstrate measurable progress toward circularity goals.
Partnering with Amplio enables your procurement team to realize new sources of value from surplus assets, enhance supply chain resilience, and deliver measurable sustainability results.
Contact us to accelerate your organization’s circular procurement strategy, maximize the value of surplus assets, and strengthen your sustainability performance.
