Developing a Framework for Closed-Loop Supply Chain and Its Impact on Sustainability in the Petrochemicals Industry

Abstract

Companies rely on formulating, implementing, and monitoring strategies in social, environmental and economic aspects to ensure that they achieve their goals and keep abreast of developments related to sustainability requirements. Therefore, our study develops a system to integrate the closed-loop supply chain approach in the petrochemical sector. The research follows the quantitative-based approach by collecting data through a questionnaire directed to employees in the supply chain departments, including 230 questionnaires that were collected. Correlation and structural equation models (SEM) were used. This technique consists of multiple regression analysis and factor analysis and analyses the structural relationship between the underlying structures and the measured variables. The results indicated a significant relationship between the supply chains that have a loop from the following perspectives: economic motivations, customer awareness, environmental legislation, and sustainability. By increasing financial reasons, customer awareness and environmental legislation, sustainability will increase as they all move in the same direction. Therefore, the overall effect of a closed-loop supply chain is positive and significant.