Supply Chain Modelling of the Automobile Multi-Stage Production Considering Circular Economy by Waste Management Using Recycling and Reworking Operations

Muhammad Omair, Mohammed Alkahtani (), Kashif Ayaz, Ghulam Hussain and Johannes Buhl
Additional contact information
Muhammad Omair: Department of Industrial Engineering, Jalozai Campus, University of Engineering and Technology, Peshawar 25000, Pakistan
Mohammed Alkahtani: Department of Industrial Engineering, College of Engineering, King Saud University, P.O. Box 800, Riyadh 11421, Saudi Arabia
Kashif Ayaz: Department of Industrial Engineering, Jalozai Campus, University of Engineering and Technology, Peshawar 25000, Pakistan
Ghulam Hussain: Mechanical Engineering Department, Faculty of Engineering, University of Bahrain, Isa Town 32038, Bahrain
Johannes Buhl: Chair of Hybrid Manufacturing, Brandenburg University of Technology Cottbus-Senftenberg, Konrad-Wachsmann-Allee 17, D-03046 Cottbus, Germany

Sustainability, 2022, vol. 14, issue 22, 1-26

Abstract: The supply chain management plays a crucial role in delivering products from a supplier, through the manufacturer, distributors, and retailers to the targeted customers. The lifecycle of the products can be ended at any stage due to imperfect quality or waste, which are typically not managed well for a good price. This product’s life can be extended and increased with the use of the circular economy for the value addition processes which turn the waste into byproducts, which can be sold with maximum profit. The automobile industry is associated with various other small industries and is very significant for the economy at the local, national, and international levels. However, the industry also requires sustainable development in its supply chain management, gained by introducing the circular economy concept to manage and reduce the generated waste. The consumption of carbon fiber-reinforced composites (CFRCs) in the manufacturing of numerous automotive parts has acquired immense attention this decade, but the process also generates imperfect products (waste). The proposed model is based on a mathematical formulation to manage imperfect production by reworking and recycling, where the former is required to re-add value to the proportion of the rejected parts, and the latter is to recycle the remaining scrap into useful products by using a circular economy. The outsourcing operation is also added to provide an optimal level of inventory and lot sizing for minimizing the total cost of the supply chain management. Data from the automobile part industry are tested to provide the practical implications of the proposed SCM mathematical model. Sensitivity analysis is performed to understand the significance level of the individual parameters affecting the objective function, i.e., the total cost of the SCM. The results show a meaningful insight for the managers to obtain the benefits of the circular economy in multi-stage automobile part production for sustainable and resilient supply chain management.

Keywords: supply chain management; circular economy; automotive industry; outsourcing; imperfect production (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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