The role of capabilities in shaping sustainable supply chain flexibility and enhancing circular economy-target performance: an empirical study

Abstract

Purpose A circular economy is a popular approach considered by many firms to address sustainable development goals strategically. Literature indicates that collaborative relationships among supply chain partners facilitate circular economy practices. However, there is a dearth of studies in lower-middle-income countries indicating the unique challenges industries face whilst practising circular economy principles and how the challenges can be overcome. To address the calls of previous researchers, this study aims to explore the following relationships: engagement and alliance capability whilst data analytics capability plays a mediating role; the relationship between alliance and data analytics capability with sustainable supply chain flexibility whilst industry dynamism is considered as a moderating variable and the relationship between sustainable supply chain flexibility and circular economy-target performance. Design/methodology/approach A cross-sectional survey was performed and data was collected from 760 employees of Indian firms. Covariance-based structural equation modelling was applied to perform the path analysis to determine a firm’s capabilities in shaping sustainable supply chain flexibility and enhancing circular economy target performance. Findings Drawing upon dynamic capability theory, it was first established that engagement capability has a positive and significant influence on alliance capability, whilst data analytics capability played a partial mediating role. Second, it was established that alliance capability and data analytics capability significantly affect sustainable supply chain flexibility, whilst industry dynamism played a moderating role. Finally, it was clear that sustainable supply chain flexibility had a significant and positive effect on circular economy target performance, ultimately enhancing sustainability. Originality/value This study advances the circular economy literature by recommending that firms must consider some critical operational level capabilities to develop their dynamic capability, i.e. sustainable supply chain flexibility, to better meet the competitive market conditions in turbulent business environments.

The 4Rs supply chain resilience framework: A capability perspective

“…| 283 during production changeover and how organizations develop these capabilities (Bag & Rahman, 2021;Betti et al, 2020).…”

“…Therefore, recalibration can improve flexibility and ensure smooth material flow in SC (Bag & Rahman, 2021).…”

How “Circular” Is the Supply Chain? Study Case: Impact of the Corporate Social Responsibility on the Circular Economy Within the Power Energy Supply Chain

“…This circular framework was defined by the Ellen MacArthur Foundation, Center and Environment (2015) to help companies for circular economy initiatives within their procurement processes and is still a debatable topic on how the supply chain may develop further its own strategy (Dull, 2021). A circular economy support companies to control environmental challenges, including climate change, waste and pollution, so circular economy principles are based on waste and pollution elimination, retaining goods and materials in use and regenerating natural systems (Bag and Rahman, 2021). The concept of circular economy is an umbrella concept having a cross and multidisciplinary nature (Kirchherr, Reike and Hekkert, 2017;Ruiz-Real, et al, 2018), however the concept applied on the circular power sector may prioritize the SDGs in specific focus order precedence.…”

“…The sustainability program monitoring is led by the company corporate towards its supply chain and suppliers are object of external sustainability audit (Latapí Agudelo, Jóhannsdóttir and Davídsdóttir, 2019; Herrera and de las Heras-Rosas, 2020). A sustainable supply chain flexibility has a positive impact on circular economy target performance, in the end increasing sustainability (Bag and Rahman, 2021). To overcome barriers and achieve the objective of sustainable supply chain operations, organizations need to explore sustainable practices as design for recycling and modularity, energy management, refurbishment/remanufacturing, product labeling, bio-based materials, life cycle assessment.…”

“…In terms of terminology, there are several definitions of concepts convergent towards the same sustainable development endeavor, covered by the 17 Goals for Sustainable development (SDGs) of the United Nations. All 17 SDGs are integrated, so an action in one area will affect the other areas (Bag and Rahman, 2021). To better understand if the circular economy is to conduct towards the corporate social responsibility or vice-versa, this article paper will do a literature review comparison to balance the opinions and to draw pertinent conclusions by interviewing several suppliers.…”