Exploring the circular economy paradigm: A natural resource-based view on supplier selection criteria

Abstract

The paradigm of circular economy and the transfer of its principles to supply chain management has recently received much attention from researchers and practitioners. Limited natural resources, governmental legislation, and social responsibility for environmental preservation are the main factors for the development of circular supply chains. Especially in the automotive industry, critical materials are used to produce electric vehicles, reinforcing the importance of circularity for the industry. As the first stage of the supply chain, suppliers have a considerable influence on creating self-sufficient production systems, and in the automotive sector, a low level of vertical integration is important. Therefore, selecting suppliers is an enabler for circular supply chains, but this decision is a complex process due to multiple, partly conflicting criteria. To contribute to the knowledge in this research area, this study applies a fuzzy decision-making trial and evaluation laboratory approach for supplier selection in a circular supply chain in a case study of electric vehicles. First, a set of criteria for supplier selection in circular supply chains was identified based on a literature review and was systematically categorized based on the natural resource-based view. Afterward, the criteria were assessed and refined by experts with a strong procurement background in the automotive industry. Second, the experts were interviewed for value collection, and finally, the mutual influence of the criteria was determined. The results show that the most important criteria for circular supplier selection in electric vehicle supply chains are environmental standards, environmental-related certifications, resource consumption, and waste generation. Regarding the natural resource-based view, short-term focused criteria addressing the capability of pollution prevention have a higher importance compared to long-term criteria that drive sustainable development. In addition, this study classifies the criteria into the categories of causes and effects, discusses the prominence of the criteria, and presents a strategic map showing the mutual influences of the criteria. The results contribute to the theoretical and practical discussion on circular supply chains by identifying the key criteria for circular supplier selection and providing decision-making support for procurement managers.