Reinventing supply chains to support new business models

Understanding how business transformation affects the supply chain

Customers increasingly prioritise sustainability and climate-neutral products alongside efficiency and value for money. 

This shift reflects a desire for ethical, transparent business practices – and poses concerns for 29% of Irish CEOs, who fear their current models won't be viable in the next decade. 

Our 2025 Irish CEO Survey finds companies reinventing their business models, including by: 

• developing innovative products and services

• targeting new customer segments

• collaborating with other organisations

• seeking new routes to market. 

These new models place new demands on supply chains. 

Five key models to consider

In Reinventing Supply Chains 2030, we’ve distilled the five most commonly used models businesses should consider in the years to come, and examined their immediate impact on – and implications for – the end-to-end value chain. 

1. Modular product ownership models involve creating products composed of interchangeable parts or modules, enabling customers to upgrade, customise, or repair the product easily without having to replace the entire item. This approach can lead to longer product lifecycles and reduced waste. Although modularisation is already a familiar concept, it has the downside of adding  organisational complexity. This is because it complicates traditional supply chain flows by requiring: 

• close collaboration with suppliers on product design and manufacturing

• reverse logistics

• advanced inventory management capabilities.

2. Product-as-a-service (PaaS) models: These transform the traditional ownership model by offering products on a subscription or rental basis, where customers pay for a product’s functionality or benefits rather than owning it outright. This can result in more efficient resource utilisation and better ongoing customer relationships. 

To enable a PaaS model, supply chains must be sufficiently nimble to support high-frequency logistics operations including delivery – as well as ongoing lifecycle services such as refurbishment and maintenance.

Alongside these considerations, PaaS models attach a higher importance to customer relationships due to the need for strong customer service support.

3. Sharing economy or pay-per-use models focus on maximising asset utilisation by allowing multiple users to access and share resources – such as cars, homes or equipment – on a temporary basis. 

This approach promotes resource efficiency and can reduce the need for individual ownership. 

Supply chain executives need to develop capabilities to efficiently manage shared assets, ensuring they’re available, maintained, and in optimal condition. To optimise asset utilisation and availability, technology integration becomes essential for tracking and monitoring usage. 

Ultimately, because demand fluctuations can be unpredictable in sharing models, the supply chain must be adaptable so it can scale up or down.

4. Circular economy models: aim to minimise waste, making the most of resources by designing products and systems that keep materials in use for as long as possible. 

Lengthening product lifespan in this way involves strategies like recycling, remanufacturing, and designing for durability and reuse – using closed-loop systems that enhance sustainability. 

Supply chains need to integrate these closed-loop processes to facilitate recycling, remanufacturing, and reuse of materials and products. 

Additionally, close collaboration with suppliers is vital to source sustainable materials and design products for circularity.

5. Circularity-enabled business models incorporate circular economy principles into core operations by designing products and services that facilitate recycling, remanufacturing, and reuse. The goals are to: 

• create value from waste

• reduce environmental impact

• drive innovation through sustainable practices. 

As products must be designed for circularity, collaboration across the supply chain is vital to ensure materials are recyclable or reusable. 

Supply chains must also innovate to create value from waste and adapt quickly to new sustainable practices and technologies.

How are supply chain leaders responding?

Many companies face the challenge of satisfying conflicting demands from customers. On the one hand, customers want sustainable products and practices – but on the other, they’re not necessarily willing to pay extra for them. 

Customers want convenience too, such as having products delivered the next day, even though next-day deliveries carry environmental costs. Added to these tensions are increasing ESG regulations. 

The need to balance sustainability demands and regulatory compliance with profitability requirements is compelling companies to rethink their business models.

Addressing cultural and organisational impacts

In our supply chain research, more than one-third of leaders said they view the short-term impact of this trend as highly disruptive, and 41% said the same about the long-term impact. 

As well as incurring extra upfront costs that can impact financial performance, adopting sustainable and service-orientated business models involves cultural and organisational changes.

In our experience, organisations often reinvent and re-engineer their entire value chains from product development through to customer returns to grow sustainably and meet ESG targets. 

This reinvention involves creating and implementing new strategies and processes. Employees need to be aware of these changes, collaborate cross-functionally (eg with product development) to understand new requirements, and embrace advanced technologies. 

In this context, we’re seeing leaders think about how to accurately track and quantify the impact of their new business initiatives and effectively communicate this information to stakeholders.

Know where to invest

To remain competitive in the future, companies must take steps today to move to more service-oriented, sustainable and circular supply chain models. With this in view, meeting the needs of new business models will require investments in: 

• circular-enabled networks

• segmented supply chain flows

• technologies such as warehouse automation

• financial planning integration.

Take the long view

Transforming business models is complex and requires courage. It is also a significant step that, in the short term, can undermine earnings and sustainability targets. But any transitory negative impacts are more than justified by the longer-term rewards on offer in the form of increased market share and revenues.

Understand the major trends shaping supply chains

Explore our report, Reinventing Supply Chains 2030, for an expert analysis of the interconnected trends emerging in the Irish market.

We’re here to help you

PwC Ireland has the experience to guide you on your supply chain transformation journey.

To find out how reinventing your organisation’s supply chain can better support new business models and generate new value, get in touch today.