Exploring symbiotic supply chains dynamics

Abstract

Symbiotic Supply Chains – where the inputs of some members belonging to one supply chain are obtained using the waste generated by other companies in a different supply chain – represent a great opportunity for companies to move towards the Circular Economy paradigm. However, the dynamic behavior of Symbiotic Supply Chains (i.e., how detrimental time-varying phenomena of supply chains, such as the bullwhip effect, impact the performance) remains largely unknown. In this work we aim to contribute to this quite unexplored research field by analyzing the dynamics of two supply chains that implement, at the manufacturer level, a symbiotic exchange of waste. We derive closed analytical equations to estimate several indicators of the bullwhip effect under different information sharing scenarios and evaluate them for different coefficients of circularity (i.e. the average proportion of the output of one supply chain that is obtained using the waste of the other supply chain). Furthermore, we extend our analysis by carrying out a simulation study, when some underlying assumptions are removed, and a full-factorial Design of Experiments to emulate and explore the behavior of Symbiotic Supply Chains under further real-life scenarios. By doing so, we identify different properties of Symbiotic Supply Chains and provide some managerial implications. Among those, we observe how the bullwhip effect of one supply chain propagates to the other, which is also greatly influenced by the variability of the demand in both supply chains. Also, we note that high coefficient of circularity does not necessary improve the dynamic performance of Symbiotic Supply Chains. Results point out to the need to carefully design symbiotic exchange in supply chains to avoid undesirable effects that may hinder the advocated advantages of Circular Economy practices.