Optimizing Supplier Selection and Risk Management in Circular Economy Initiatives for Sustainable Procurement: A Case Study in [Industry]

Project Abstract

This study investigates how supplier selection and risk management practices can be optimized within circular economy initiatives to enhance sustainable procurement performance in the [Industry] sector. It adopts a mixed-methods research design, combining a systematic literature review, a multi-criteria decision analysis (MCDA) framework, and empirical data from interviews with procurement professionals, supplier audits, and procurement performance metrics from partnering organizations. The core objective is to develop an integrated decision-support model that quantifies environmental, social, and economic risks and opportunities associated with supplier relationships, material loops, and product lifecycle stages. The MCDA framework merges TOPSIS and the Analytic Network Process (ANP) to reflect interdependencies among circularity indicators such as design for recyclability, remanufacturing potential, supplier transparency, energy and water use, waste reduction, and end-of-life serviceability. In parallel, a Bayesian risk assessment approach is employed to capture dynamic supply-side uncertainties, including supplier financial viability, geopolitical disruptions, regulatory shifts, and quality variability, and to propagate uncertainty through procurement scoring. The research identifies key drivers for effective supplier selection in circular procurements, including collaboration intensity, shared sustainability goals, data interoperability, and long-term contracts that incentivize circular investments. A novelty of the study is the integration of circular economy metrics with risk-based supplier performance dashboards, enabling procurement teams to prioritize suppliers that maximize circular gains while keeping risk exposure within acceptable thresholds. The empirical phase validates the proposed model using case studies from multiple sub-sectors within [Industry], comparing traditional procurement approaches with the optimized circular procurement framework. Findings reveal that the optimized approach improves material circularity indicators, reduces total cost of ownership, and enhances resilience against supply disruptions by diversifying supplier bases and promoting modular design. The study also uncovers tensions between short-term cost pressures and long-term circular value capture, highlighting the need for governance mechanisms, such as circular procurement policies, supplier development programs, and robust data sharing agreements. Sensitivity analyses demonstrate that the model is robust to moderate data gaps and can be adapted to varying organizational scales, from SMEs to large multinational corporations. The dissertation contributes a practical, auditable framework for procurement practitioners, a decision-support tool with configurable weights for industry-specific priorities, and a set of actionable recommendations for implementing circular supplier selection and risk management workflows. Policy implications address regulatory alignment, standardization of circularity reporting, and incentive structures to promote sustainable procurement ecosystems. Finally, the research outlines a roadmap for future work, including the integration of circular economy performance into supplier scorecards, real-time monitoring via digital twins, and cross-industry benchmarking to accelerate scalable, sustainable procurement transformative initiatives.

Project Overview

What This Project Is About

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A plain-language overview of how a company can choose suppliers and manage risks while supporting circular economy ideas—reusing, repairing, and recycling materials to reduce waste. The project examines how to select suppliers who fit sustainable practices and how to handle risks like price changes, supply disruptions, or unethical behavior, all within a circular economy approach. It uses a real-world case in a specific industry to illustrate decisions and trade-offs.

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The Problem It Addresses

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Many organizations struggle to balance cost, reliability, and environmental impact when sourcing goods. Traditional supplier selection often ignores circular practices or risk signals, leading to waste, higher emissions, or fragile supply chains. This project tackles how to embed circular economy criteria into supplier choices and how to anticipate and mitigate risks that could disrupt sustainable procurement.

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Objectives of the Project

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1. Explain the concepts of supplier selection and risk management within a circular economy.
2. Identify key factors that influence sustainable procurement in the chosen industry.
3. Develop a practical framework for evaluating suppliers on both performance and circular criteria.
4. Propose risk-mitigation strategies aligned with circular economy goals.
5. Demonstrate the framework through a case study and provide actionable recommendations.

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What You Will Do Step by Step

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1. Review literature on supplier selection, risk management, and circular economy principles.
2. Describe the industry context and current procurement practices.
3. Design a scoring framework that combines performance metrics with circular criteria.
4. Collect data from case-study suppliers (surveys, interviews, publicly available records).
5. Apply the framework to compare suppliers and identify trade-offs.
6. Analyze risks and propose mitigation plans.
7. Validate the framework with expert input or pilot testing.
8. Summarize findings and draft practical recommendations for managers.

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Expected Outcome

A clear, implementable method for selecting suppliers who support circular economy goals, plus a set of risk management strategies that reduce disruptions while advancing sustainability in procurement. The project should yield practical guidelines and a ready-to-use assessment tool for organizations in the chosen industry.