Top Procurement Challenges in 2025

As large enterprises pursue greater resiliency, innovation, and sustainability, circular procurement is becoming a powerful tool to cut waste and drive long-term value. Instead of following a “take, make, dispose” approach, companies are designing sourcing strategies to keep resources in use for longer. By closing the loop, businesses can cut their raw material dependence, reduce emissions, and align their operations with growing policy and market pressures. Here’s a clear path forward for enterprises that want to implement circular procurement.

The first step is identifying which products and services can be sourced in a closed-loop or recyclable format. Large enterprises should assess their portfolio and find opportunities — for example, IT equipment, packaging, furniture, or components — where reuse, refurbishment, or recycling makes financial and operational sense. Focusing on high-impact, high-risk categories first lets companies maximize benefits and learn from initial initiatives. It’s about choosing the right starting points.

Once priorities are set, companies need to reflect their goals in supplier criteria. That means evaluating suppliers on their ability to reuse materials, repair products, or take back components at the end of their life. Large enterprises can leverage their buying power to influence supplier practices, asking for closed-loop services and designing incentives to align incentives. Setting clear criteria signals to the market that you’re serious about developing a more circular and responsible supply chain.

For circular procurement to become a standard practice, it must be woven into sourcing strategies and supplier relationships. That means adding circular criteria to requests for proposal, supplier scorecards, and supplier contracts. Large enterprises can use scoring models to assess supplier capabilities and track progress against goals. Making these criteria a core consideration — alongside price and delivery — signals a permanent shift toward a more circular approach.

Effective implementation depends on robust measurement. Large enterprises should track key performance indicators — from waste reduction to supplier participation and material reuse — to gauge progress and drive continual improvement. Quantifying these benefits lets companies celebrate successes, adjust their strategies where needed, and make a strong business case for scaling their initiatives. Measuring progress also demonstrates credibility and leadership to stakeholders, regulators, and investors.

Once companies see results from their initiatives, it’s crucial to celebrate those wins internally and externally. Success stories help motivate procurement teams, showcase progress to stakeholders, and deepen supplier relationships. Large enterprises can then scale their initiatives to additional Categories and geographies, turning a few pilot projects into a powerful enterprise-wide transformation. The result is a more resilient, responsible, and future-proof procurement ecosystem.