Plastic waste is one of the major constituents of environmental pollution due to the increasing applications of plastic material in today's economy. Regulation and customer preferences compelled firms to use recycled plastic (RP) for sustainable production and a circular economy. Companies have already started using recycled plastic from the market in the open-loop supply chain system, but they are facing issues in managing that with the current planning system due to unpredictable variations in quality, quantity, lead time, and prices. As a result, their production system is affected by shortages, increasing waste, high maintenance costs, and poor product quality, which ultimately results in high cost and customer loss for circular businesses. This paper first identifies the sources of these variations in the supply of RP to guide industrial experts and practitioners to avoid when transforming businesses from linear to circular systems. Ineffective recycling processes, inexperienced recyclers, competition against incineration, and a poor supply market are the main problems that make the supply chain more vulnerable. Secondly, a strategic framework is developed based on infrastructure design, technology, production planning, product design, supplier integration, and customer engagement to guide firms in making their production system and supply chain resilient against the uncertain supply of RP in closed-loop supply chain management.