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

Purpose: The purpose of this paper is to test the link between servitisation and circular economy by synthesising the effect of product-service systems (PSS) on supply chain circularity (SCC). 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 SCC through increased product longevity, closure of resource loops and resource efficiency. It also identifies six contextual factors affecting the implementation of SCC including: economic attractiveness of SCC; firm sustainability strategy; policy and societal environment; product category; supply chain relationships; and technology. Research limitations/implications: The conceptual model proposes that SCC 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 SCC through PSS business models. It also gives insight into the various contextual factors that may affect how a manufacturer’s servitisation strategy contributes to SCC. Originality/value: This review contributes to the understanding of the relationship between servitisation and SCC 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 SCC.