Emergy Analysis and Supply Chains A Circular Economy Byproduct Supply Chain Case Study

Alkhuzaim, Lojain

Etd

Emergy Analysis and Supply Chains A Circular Economy Byproduct Supply Chain Case Study

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The circular economy (CE) has grown in global importance, in part because of its capacity to address various environmental concerns. It is critical to better understand its structural, policy, and managerial implications—both environmental and economic—and integrative performance measures can help achieve such understanding. Emergy analysis (EA) (with an ‘m’) has been receiving increasing attention for its applications in environmental accounting, where it serves as an integrative performance measurement tool. Its relationships with, and implications for, sustainable supply chains and the CE are not yet well understood, despite initial investigations; emergy analysis may potentially provide profound opportunities for advancing these sustainability-oriented fields. Emergy analysis uses donor-side valuation approaches as a basis for economic, social, and environmental performance measurements. Based on an environmentally oriented theoretical foundation, this thesis aims to extend the applications of inherently broad environmentally integrative performance measures in CE at the supply chain level. It offers a comprehensive measuring tool that can be part of the organizational decision-making process. Furthermore, this dissertation thesis study integrates certain external pressure aspects expressed by two government policies, altering the performance of the supply chain under study. For the purpose of gaining a deeper understanding of sustainable supply chain management (SSCM) and CE performance, this research investigated the viability of potential integrative methods addressing CE supply chain issues. An integrative emergy system dynamics methodology is applied to address supply chain-related decisions while incorporating a theoretical perspective that uses the natural resources dependence theory (NRDT). EA is used to evaluate two different multitier supply chains using a CE by-product practice, wherein by-products are former waste products transformed into useful, value-adding materials. A case study evaluation as a proof-of-concept focuses on Saudi Aramco’s supply chain processes of lost circulation materials used in drilling operations. Lost circulation materials are small particles used to plug and fill the cracked rock formations found underground to minimize drilling fluid waste. Saudi Aramco formerly imported walnut shell by-products from the United States for use as lost circulation material. In recent years, however, date seed by-products have been introduced to completely replace walnut shell by-products, given their local availability as well as the scale of the date industry in Saudi Arabia. The supply chain emergy evaluation includes the cultivation, transportation, and remanufacturing of the tested by-products. In addition to EA, an SD model was constructed using Stella Architect software. The SD model presented the emergy system of date cultivation, which is part of the date seed by-product supply chain. The SD model is used as a policy intervention tool to simulate four scenarios that investigate the impact of two government policies on the emergy evaluation of date cultivation. These policies are the government subsidy and the environmental concerns policy. The approach used here relates to external regulatory pressures and how they can be captured in NRDT through this emergy-based SD methodology. Finally, this research presents donor-side indicators as a practical means of measuring the components of NRDT, which together make up the reciprocal relationship that exists between the natural environment and organizations. Results of the emergy analysis suggest that the walnut shell by-product supply chain performs more sustainably than the date seed by-product supply chain. The emergy-based indicators show that date production (the origin of the evaluated by-product) imposes a higher environmental burden, as measured by emergy loading ration (ELR), compared to walnut production. The simulation results of the emergy SD model revealed that integrating the two suggested policies produced the best emergy performance by improving the emergy-based indicators over time. A series of general research propositions based on our study results are presented in the interest of potential avenues for future research.

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