A breakthrough in circular economy: Using a closed-loop framework to assess the circularity of supply chains

Abstract

The concept of the circular economy (CE) proposes eco-friendly principles for dealing with circularity problems in production systems and supply chains (SCs). To achieve circularity goals in SCs, CE principles assist decision-makers with reusing, remanufacturing, and recycling initiatives in the production process. However, previous meso- and macro-level circularity investigations reveal shortcomings in practical closed-loop solutions. This study aims to develop a closed-loop framework for assessing the circularity of sustainable SCs using network data envelopment analysis (NDEA). The closed-loop framework is created utilizing real-life indices of sustainable SCs, such as "recyclable undesirable outputs". To make the appraisal more realistic and enhance the validity and reliability of the results, the circularity results of SCs are assessed under data uncertainty. This allows SCs to be ranked based on their real circularity level, identifying sustainable and unsustainable SCs. The proposed framework offers decision-makers a practical evaluation tool to identify the highly circular SCs and establish circularity benchmarks for inefficient SCs. The proposed approach is scalable and applicable to real-world circularity evaluations in multistage SCs and production systems. The study concludes with a two-stage case study to show the practicality of the new framework.