Impact of circular economy practices on supply chain capability, flexibility and sustainable supply chain performance

Abstract

PurposeThis paper analyses the effect of circular economy practices on sustainable supply chain performance. The study explores the impact of mediating variables such as supply chain flexibility and capabilities and the moderating role of supply chain integration in the relationship between circular economy practices and sustainable supply chain performance in Indian manufacturing firms. The study builds on the stimulus-organism-response (S-O-R) model to conceptualise circular economy practices that influence supply chain capabilities, integration and flexibility, impacting sustainable supply chain performance.Design/methodology/approachThis study adopted an online survey questionnaire distributed to managers of Indian manufacturing firms adopting circular economy practices. The data were analysed using SPSS Amos 25 and PROCESS macros.FindingsThe results suggest a positive impact of circular economy practices on sustainable supply chain performance in manufacturing firms. In addition, a supply chain manager's relationship with retailers is improved in the presence of supply chain capabilities and flexibility. Supply chain integration further strengthens this relationship as a moderating variable.Originality/valueBy examining the literature on circular economy practices and sustainable supply chain management, this study contributes to bridging the gap between supply chain capabilities, integration and flexibility using the S-O-R model. This study is possibly among the first to explore and provide empirical evidence on how circular economy practices in manufacturing firms can impact supply chain managers' experiences and thus help to improve environmental well-being. Both academics and business professionals might find these contributions interesting.