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

Journal article


Ethirajan, Manavalan, Arasu M, Thanigai, Kandasamy, Jayakrishna, K.E.K, Vimal, Nadeem, Simon Peter and Kumar, Anil 2020. Analysing the risks of adopting circular economy initiatives in manufacturing supply chains. Business Strategy and the Environment. https://doi.org/10.1002/bse.2617
AuthorsEthirajan, Manavalan, Arasu M, Thanigai, Kandasamy, Jayakrishna, K.E.K, Vimal, Nadeem, Simon Peter and Kumar, Anil
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.

KeywordsBusiness Strategy; Environment; Circular supply chain; Risk; Grey-DEMATEL; Vulnerability analysis
Year2020
JournalBusiness Strategy and the Environment
PublisherWiley
Digital Object Identifier (DOI)https://doi.org/10.1002/bse.2617
Web address (URL)http://hdl.handle.net/10545/625126
hdl:10545/625126
Publication dates25 Aug 2020
Publication process dates
Deposited27 Aug 2020, 08:40
Accepted01 Aug 2020
ContributorsVIT University, Vellore, Tamil Nadu, India, National Institute of Technology, Patna, Bihar, India, University of Derby and London Metropolitan University
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