Enabling organizations to strategically manage risks in circular supply chains

Abstract

Circular supply chains (CSCs) prioritize resource efficiency by reusing, remanufacturing, and recycling materials, offering environmental benefits and competitive advantages. However, they are facing various risks and organizational challenges that hinder their efficiency. To ensure long‐term sustainability, this study identifies the key risks and introduces a prioritization model for risk management in CSC strategies proposing a framework for the risk evaluation based on the set of criteria and prioritization model using a combination of three multicriteria decision‐making (MCDM) methods. The model applies fuzzy Delphi‐based analytical hierarchy process (AHP) method to determine the criteria weights and fuzzy axial distance‐based aggregated measurement (ADAM) method for ranking the alternatives. The findings of this study allow for the identification of the most important risks associated with CSC enabling stakeholders to allocate resources strategically and focus efforts on crucial areas. Results highlight that the most important risks are supply chain complexity, resource availability, and quality and technological challenges. The most important contributions are the identification of the most relevant risks that threaten the resilience and sustainability of CSCs, the establishment of the framework for their evaluation, and the development of a novel hybrid MCDM model for their ranking. These contributions are also the main theoretical implications of the study. On a practical level, it enables organizations to strategically manage risks, standardize risk assessment, and improve their competitive advantage by enhancing resilience, reducing disruptions, and lowering operational costs.