An investigation into circular economy practices in the traditional wooden furniture industry

Abstract

Despite the growing awareness about Circular Economy (CE) in production and supply chain management, there is little evidence linking CE practices to environmental and economic performances, especially within the traditional wood furniture industry in Indonesia. As with other management practices, implementation of CE can be supported by various factors. Among these factors are the so-called environmental-oriented supply chain cooperation (ESCC) practices. The study reported in this paper has three purposes. First, to investigate how the different levels of ESCC practices will affect the CE practices across the traditional wooden furniture industry in Central Java, Indonesia; second, to investigate the relationship between varying ESCC practices (which is grouped based on the implementation of CE practices) on the CE-targeted performances; and third, to examine the role of ESCC practices as a moderating variable in the relationship between CE practices and CE-targeted performances. This study uses primary data which were collected through closed questionnaires to 190 valid samples of wooden furniture SMEs across the cities of Jepara, Kudus, Rembang, Semarang, Blora and Surakarta. The data were processed using confirmatory factor analysis (CFA), K-means clustering analysis, Multivariate Analysis of Variance (MANOVA) and regression analysis. The results indicated that, depending on the levels of ESCC practices, the SMEs could be grouped into leaders, followers and laggard, which also determined the extent to which they practised the CE principles. The study also elaborated on the interactions between ESCC and CE practices, and how these might affect the CE-targeted environmental and economic performances.

Keywords:

• Traditional wooden furniture
• circular economy
• supply chain cooperation
• environmental performance
• economic performance

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Aries Susanty

Dr. Aries Susanty is Professor in the field of Industrial Engineering and also a lecturer at Department of Industrial Engineering, Diponegoro University, Semarang, Indonesia. She obtained her Doctoral in Industrial Engineering from the Bandung Institute of Technology. She served as Secretary of Master Program of Industrial Engineering and Management from 2017. Through his 20+ years of experience in teaching and research in the Diponegoro University, she has established an overarching research area in supply chain modelling, supply chain governance, supply chain policy, procurement and logistics strategy, and organisation behaviour. Her research track record has been demonstrated by winning a number of research grants from Indonesia government and Diponegoro University. She has published more than 50 technical papers in journals and conferences. She also coordinated multiple academic and industrial research projects. She has successfully completed the supervision of 5 Master Student and over 60 Undergraduate Students.

Benny Tjahjono

Dr. Benny Tjahjono is Professor of Supply Chain Management and leader of the Sustainable Production and Consumption research cluster at the Centre of Business in Society, Coventry University. Through his 18+ years of experience in teaching and research in the UK, he has established an overarching research area in Sustainable Operations and Supply Chain Management. His research track record has been demonstrated by winning a number of research grants from the UK Engineering & Physical Research Council (EPSRC), Innovate UK, European Union and private sectors. He was a member of a consortium consisting of seven universities in Europe recently being awarded the Horizon2020 MSCA Innovative Training Network. His most recent research grant was funded by the Academy of Medical Sciences’ Global Challenges Research Fund (GCRF) in the area of Circular Food Supply Chain. He has published more than 90 papers in refereed academic journals, conference proceedings, books, practitioners’ journals and newspapers. He has successfully completed the supervision of 12 PhD students and over 110 Masters Students, and currently leads a team of four doctoral researchers in many areas related to Circular Economy (CE) and sustainability.

Rahayu Eka Sulistyani

Rahayu Eka Sulistyani is a graduate from Industrial Engineering Department, Diponegoro University. She is one of the assistants in Laboratory of Optimisation and Industrial System Planning. Her research interests include supply chain modelling and green supply chain practice.