Sustainable Supply Chain Management in Enhancing Circular Economy Performance: Study Case in Indonesia

Abstract

The concept of circular economy entails the reduction of resource inputs and the reclamation of waste in order to tackle the environmental, economic, and social challenges that sprang from the persistence of the linear economic model. Implementing a circular economy certainly has its own challenges. One of which is to find a sustainable supply chain. Sustainable supply chains are designed and man¬aged by combining practices responsible for the environment and society throughout the life cycle of a product or service. This is possible to achieve through good collaboration between supply chains and having a supply chain design with a sustainable concept. Thus, this research discusses the effect of sustainable supply chain management on circular economy performance mediated by circular economy capability. The objects of this research are 82 courier service companies on Java Island. This research employed quantitative design. The data collection method involved distributing online questionnaires to middle – top managers as respondents. The results show that sustainable supply chain management has a positive effect on environmental performance, then sustainable supply chain management has a positive effect on financial performance. Furthermore, circular economy capability partially mediates the correlation between sustainable supply chain management and environmental performance, and partially mediates the correlation between sustainable supply chain management and financial performance. This research conveys the direction of further research in the same re¬search context.