Sustainable supply chain management of automotive sector in context to the circular economy: A strategic framework

Abstract

In the era of circular economy (CE), sustainability in the supply chain provides a competitive edge over other organizations in a globally competitive environment. There have been an increasing number of studies in sustainable supply chain practices in the recent past. Limited studies have been done to identify the key strategic factors for sustainable operations of automotive sector in context to developing countries like India. The primary goal of this research is to undertake a thorough assessment and give a brief understanding of the barriers of sustainability in the automotive supply chain. Various barriers are identified from experts' interviews and past academic literature. An integrated approach comprising of the “decision‐making trial and evaluation laboratory method” (DEMATEL) and “interpretive structural modelling” (ISM) method is employed to develop a contextual and hierarchical relationship among the identified barriers. The lack of awareness concerning reverse logistics adoption has the greatest causal effect. This is followed by a lack of information sharing on sustainable practices and complexity in measurement and monitoring of suppliers' environmental activities. To ensure the robustness of the model, sensitivity analysis has been also performed. The novelty of this work is that it identified several barriers towards a sustainable supply chain in automotive sector with a special focus on India. This work will help the practitioners to prioritize the strategic actions needed to be taken for developing sustainable supply chain management. This research has crucial policy implications for stakeholders working to build a sustainable CE by remanufacturing and reusing production waste.

Indian automotive supply chains: barriers to circular economy for sustainable development

“…This includes a lack of recycling facilities and equipment, as well as inadequate waste collection and transportation infrastructure (Kirchherr et al ., 2018; Kumar et al ., 2019). India's supply chains are often fragmented and inefficient, making it difficult to collect and process waste materials (Sonar et al ., 2022). This makes it hard to close the loop and achieve a truly circular economy.…”

“…In addition, there have been efforts by individual companies in the Indian automotive supply chain to adopt circular economy principles, such as using recycled plastics in their products, implementing recycling programmes for end-of-life vehicles and developing more energy-efficient manufacturing processes. However, despite these efforts, implementing a circular economy in the Indian automotive supply chain is still in its early stages (Sonar et al ., 2022). There is a need for more government support and regulations to promote the use of recycled materials and the implementation of circular economy practices in the industry (Ghosh, 2020).…”

Applications of plastics in the automotive industry: Current trends and future perspectives

“…Such strategies facilitate the recycling and reusing of automobile components, reducing waste, and conserving valuable resources. 84,85 Collaboration among automakers, recyclers, and material suppliers is essential in establishing closed-loop supply chains that promote a circular approach, wherein materials circulate within the system rather than being disposed of as waste. [86][87][88] Another indispensable tool in the automotive industry's sustainability toolkit is the adoption of life cycle assessment (LCA) and eco-design principles.…”

“…This model encompasses a series of critical initiatives, including the implementation of end‐of‐life strategies such as design for disassembly and efficient material separation. Such strategies facilitate the recycling and reusing of automobile components, reducing waste, and conserving valuable resources 84,85 . Collaboration among automakers, recyclers, and material suppliers is essential in establishing closed‐loop supply chains that promote a circular approach, wherein materials circulate within the system rather than being disposed of as waste 86–88 …”

Modeling the Barriers of a Circular Economy for Enhancing Competitiveness: An Interpretive Structural Modeling Approach

“…The circular economy (CE) has received significant consideration from scientists and specialists since it considers both social advantages and improves ecological security (Agyemang et al, 2019 ; Anaruma et al, 2021 ; Khandelwal & Barua, 2020 ; Sonar et al, 2022 ). In 2020, the rate of circularity of material use in the EU was 12.8%, 4.5 percentage points (pp) up from 2004.…”