Analysing the risks of adopting circular economy initiatives in manufacturing supply chains

Abstract

The concept of circular economy (CE) has proven its worth due to the scarcity of natural resources and huge amounts of wastage which impacts the environment. Thus, the adoption of the CE concept in the supply chain becomes critical. However, due to the complex nature of processes/activities in the circular supply chain (CSC), managing risk has become a priority to avoid disruption. In current literature, no discussion has been conducted on how to analyse the risks in the context of CSC. Therefore, to fill this literature gap, this study concentrates on identifying and analysing the risks to promote effective circular initiatives in supply chains in the context of the manufacturing industry, thus minimising the negative environmental impact. A total of 31 risks were identified through an extensive literature review and discussions with experts. A grey‐based decision‐making trial and evaluation laboratory (DEMATEL) method is applied by incorporating the experts' knowledge to compute prominence and cause/effect scores to develop an interrelationship map. Finally, a vulnerability matrix for risk categories is developed using the average of prominence and cause/effect scores of risks. The results show that transparent process is the most prominent risk and branding is the least significant risk. By using the average prominence and cause/effect score, a risk category, namely, financial risk, is identified as most vulnerable to CSC. These findings will help industry managers not only to prepare business strategies in the adoption of CE initiatives in supply chains by eliminating risks but also in minimising negative environmental impact.

Examining the relationship between the level of logistics service quality, relationship quality and repurchase intention in e-retail sector of Pakistan

“…Tandon, 2020;Waker, de Alencar Nääs, Duarte, & Papalardo, 2018).Trust refers to users' expectation that logistics service provider behaves ethically, dependably and fulfill their expected commitments (Iassinovskaia, Limbourg, & Riane, 2017;Menidjel, Benhabib, Bilgihan, Madanoglu, & Management, 2019;Vuong & Khanh Giao, 2020). Commitment refers to a desire to maintain valuable relationship and the belief that it is important enough to make the utmost effort to maintain a lasting relationship with the exchange partner (Agag, 2019;Ertz, Durif, Lecompte, & Boivin, 2018;Ethirajan et al, 2021;Y. Li, Guo, & Zhang, 2018).…”

Circular economy adoption barriers: An extended fuzzy best–worst method using fuzzy DEMATEL and Supermatrix structure

“…Although they have studied these barriers precisely, they have ignored some barriers, such as organizational and financial barriers. Another study conducted by Ethirajan et al (2021) placed emphasis on the risks and threats pertaining to CE affairs in the supply chain of manufacturing companies. They reported the availability of 31 risks in this area and employed DEMATEL approach to assess these risks.…”

Analysing the roadblocks of circular economy adoption in the automobile sector: Reducing waste and environmental perspectives

“…They suggested that in the future, the framework could be refined by considering a greater sample size. CE is considered as an alternative to the traditional approach of ‘make–use–dispose’ (Ethirajan et al, 2020). In the manufacturing sector, many organisations are striving hard to position themselves better, but appropriate strategies have not been identified for them in existing literature for CE implementation.…”

“…In‐depth interviews could also be conducted to obtain quantitative data. Ethirajan et al (2020) analysed risks associated with CE initiatives in the SC of a manufacturing organisation. Their study found 31 risks associated with CE initiatives and used a DEMATEL approach to analyse identified risks.…”