STUDY OF SELECT ISSUES IN CIRCULAR SUPPLY CHAIN

Abstract

Manufacturing sector in India is witnessing a faster growth and is set to increase its share from 16 to 25 percent in the Gross Domestic Product (GDP) of the nation by the year 2025. In the recent past, Government of India (GOI) has made various amendments in the national policy of manufacturing to provide a pathway to the multi-national companies to invest in Indian manufacturing sector. Looking at the future growth of manufacturing in India and the limited availability of natural resources, there is a need of development of such business models in the manufacturing industry which can produce product more sustainably. Circular economy (CE) is a sustainability approach which optimizes the use of resources while empowering companies to gain profits from deliverables to market. The major advantages of the application of CE concept is resource conservation, lesser energy consumption and reduced emission of greenhouse gasses thereby abating the reliance of the economy on natural resources. Implementation of CE models may be helpful in overcoming the environmental, societal and economic issues. In the recent past many researchers have worked in this area to establish a connection of CE concept with the current sustainable supply chain business models. The concept of CE is in nascent stage and there are several challenges coming with the implementation of this concept that organizations need to face in today’s business environment which need to be addressed in a systematic way. The review of literature on Circular Supply Chain Management (CSCM) showed that comprehensive integrated view of CSCM is still missing, and therefore, there is need to address various dimensions related to the incorporation of CE principle in supply chain management. Thus, this thesis offers both qualitative and quantitative approaches to address the research gaps through the utilization of survey techniques, case studies, statistical analyses, and conceptual frameworks pertaining to specific issues within the context of the Indian manufacturing sector. A survey of the Indian manufacturing Industry was conducted to explore the current practices, challenges and risks and thereafter, hypotheses were formulated to examine the correlation between these issues and the economic, environmental, and social functioning of CSC. A questionnaire developed through Google form was employed for the purpose of data collection. v In order to gather the necessary data, questionnaire was distributed to 390 manufacturing companies via Google Forms. The survey targeted companies that have previously utilized circular concepts in their operations. Hypotheses were tested using Likelihood Ratio Test (LRT). The test results shows that there is a positive association between practices and performances and therefore, the practices identified in the study are positively effecting the adoption and implementation of CSC. The research work explored and analyzed key challenges pertaining to the implementation of CE concept in Indian manufacturing industry. For the identification of significant challenges Pareto approach is incorporated in the study. Fuzzy logic is applied along with DEMATEL approach to prioritize the significant CE challenges for the implementation in manufacturing industry. Furthermore, the present research integrates risk management approach with Circular Economy. Risk management is inevitable for achieving a high degree of circularity in SC. Risk management involves the identification, modeling and mitigation of risk at various levels of SC. Measuring Circular Supply Chain (CSC) disruptions, and the impact on the sustainable performance of the CSC, is still lacking in the existing literature. One of the objectives of this research is to develop a circular supply chain risk framework, in order to generate risk profiles of various CSC partners and to study the disruption caused due to the occurrence of various risk on the performance of CSC. The research also explored circularity potential of non ferrous metal considering a case of the Indian Aluminium industry. This study is able to demonstrate the circularity potential of Aluminium for the non ferrous metal industry in the context of developing economy. To analyze the flow of Aluminium in a supply chain network, Markov Chain approach is used. This study incorporates Graph Theory and Matrix approach (GTMA) for the selection of best coordination alternative across different supply chain networks. The coordination alternatives are examined on the basis of coordination attributes which are selected and analyzed through comprehensive review of literature and collecting valuable expert opinions. The study constitutes review of literature pertaining to issues of coordination addressed in the sustainability domain that may include either close loop or circular supply chain. In order to overcome sustainability based challenges the company wants to identify whether the coordination needs to be established in the forward, reverse or circular direction. Therefore the proposed study uses these three vi directions as three alternatives in GTMA approach applied for the above mentioned problem. The outcomes of the study indicate low value of coordination index for forward supply chain, which means the coordination among the partners as we move downstream in the supply chain does not lead to the achievement of sustainability goals. In case of reverse supply chain, the coordination among the upstream partners will be slightly more significant in achieving the objectives of sustainability. However the coordination among the members of circular supply chain (including forward as well as reverse supply chain) will significantly effect in achieving sustainability goals. The research work has attempted to address the select issues of Circular Supply Chain (CSC), identified based on the comprehensive literature review and exploration of Circular Economy (CE), especially in the context of Indian manufacturing industry. The work reported has explored the various issues of CSC and proposed the solution methodologies by developing models, frameworks, case studies such as identifying and prioritizing key factors, decision frameworks for circularity and implementation decisions, and framework for evaluating performance of CSC. The research work will help the industrialists, academicians, and researchers in implementing, developing, and operating CE systems effectively and efficiently.