A framework for digital supply chains in the era of circular economy: Implications on environmental sustainability

Abstract Increased attention to environmental sustainability has created pressures to adopt the circular economy (CE) principles. The transition toward CE requires system redesign and business process modification. Embracing disruptive technologies produces several benefits including improved productivity and resource utilization. Thus, organizations become eager to adopt and sustain digital supply chains (DSCs) in globally competitive markets. Additionally, the linkage between DSC with CE and the impact of DSC on organizational performances from the perspective of CE remain unexplored in previous studies. This study aims to develop a framework for DSC adoption from the perspective of CE. The present study recognizes the barriers through literature review and experts' opinions that must be eradicated to attain the objectives of DSCs. In this study, 19 potential barriers to DSCs were identified. A fuzzy best–worst method (BWM) was adopted to prioritize the identified barriers. Further, the study formulates strategies for integrating the CE with DSCs to overcome the barriers. A modified Total Interpretive Structure Model (m‐TISM) was developed to highlight the different levels of suggested strategies. This study contributes to the existing literature by analyzing the identified barriers to DSCs and suggesting overcoming strategies. The integrated methodology assists organizations to develop efficient and integrated strategic measures toward DSC adoption through the application of enhanced knowledge of CE and environmental sustainability. The findings reveal that the “lack of digital skills and facilities” is the most influential barrier in DSC development. Further, the findings indicate that financial and regulatory supports are the primary steps toward a digitalized economy.