A sustainable competitive supply chain network design for a green product under uncertainty: A case study of Iranian leather industry

Abstract

The leather industry typically generates a large amount of wastewater. Leather production requires large quantities of freshwater and various chemicals are added to the water at every stage of production. The absence of proper regulatory bodies and specialized treatment plants to recycle the wastewater add to the environmental hazards caused by the industry. Due to the problems cited above and the significant cost of safe wastewater disposal, numerous manufacturers illegally discharge their chemically polluted wastewater, causing immeasurable damage to the environment and public health. Governments' failure to adopt suitable taxation and subsidy policies further aggravates the crisis and discourages manufacturers from transitioning toward sustainable production practices. As a result, the majority of manufacturers are on the brink of bankruptcy. In this study, we propose a model for a leather industry supply chain that incorporates the three pillars of sustainability which include economic viability, environmental protection, and social equity. The proposed model features flexible governmental policies and enacts a Stackelberg competition between the producers and retailers under both certain and uncertain conditions in the context of the Iranian leather industry to ensure maximum customer satisfaction. To verify the applicability of the model, it was applied to a real-world case study under uncertainty. In the end, the validity of the model was confirmed when the results were approved by a panel of industry experts.