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A Sustainable Supply Chain Model for Circular Value Creation in the Automotive Industry

David Adedayo Akokodaripon, Winner Mayo, Jolly I. Ogbole, Precious Osobhalenewie, Okoruwa

Abstract

The automotive industry faces growing pressure to balance profitability with environmental sustainability amid resource depletion, regulatory constraints, and increasing consumer awareness. This review proposes a sustainable supply chain model that integrates circular economy principles—reuse, recycling, remanufacturing, and sustainable design—to enable circular value creation across the automotive value chain. The paper explores how adopting closed-loop supply chains can minimize waste, reduce material costs, and extend product life cycles while maintaining high-quality standards. Through a synthesis of recent studies and industrial case analyses, the review highlights key enablers such as digital traceability, reverse logistics, and eco-design for optimizing resource flows and carbon reduction. Furthermore, the proposed model emphasizes collaboration among suppliers, manufacturers, and recyclers to enhance transparency and performance measurement using life cycle assessment and sustainability key performance indicators . The study identifies the barriers to circular implementation, including technological limitations, lack of standardized recycling infrastructures, and fragmented stakeholder alignment. Ultimately, the model offers a framework for achieving environmental, economic, and social value simultaneously, fostering resilience and competitiveness in the automotive sector. This review underscores the potential of circular supply chains to transform automotive manufacturing into a regenerative and economically viable system aligned with global sustainability goals.

Keywords

Circular EconomyAutomotive IndustrySustainable Supply ChainRemanufacturingResource EfficiencyReverse Logistics.

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