Evaluating indicators for international manufacturing network under circular economy

Abstract

Purpose

The purpose of this paper is to find the driving factors for effective and efficient management of international manufacturing network (IMN) which has become increasingly important due to the intensive competition existing in the manufacturing industry. This paper presents a magnified view of different constructs of IMN and identifies the qualitative factors which are broadly classified under different constructs like political, economic, social, technological, legal and environmental.

Design/methodology/approach

Principal component analysis is applied to club identified factors into political, economic, social, technological and legal categories. PESTLE–SWOT approach is used to shortlist the identified factors using the elimination algorithm. Using analytical hierarchy process, weightages and rank of the identified factors are evaluated. Interpretive structural modeling is applied to understand inter-relationship among factors, and to analyze the driving power and dependence of the factors.

Findings

The results obtained from the above approaches are compared to identify most significant factors and the list of IMN enablers is presented using Venn Diagram. Government stability, Economic freedom, economic stability, environmental sustainability and raw material availability are coming out to be the driving factors across all techniques. Finally, the paper provides weights of the driving indicators common across all multi-criteria decision-making techniques considered.

Research limitations/implications

The proposed work provides significant information about the qualitative factors needed to be considered while designing and developing IMN. As identified by literature review and through expert opinions, not all 29 factors responsible for IMN development are crucial. Many factors are either interdependent or driven by others. The paper provides a useful analysis about the driving factors that need to be taken into account.

Originality/value

The study presents a comprehensive analysis of the IMN enablers. Furthermore, it provides managerial and theoretical implications to deal with the complexities encountered while establishing IMN.

Citation

Mishra, S., Singh, S.P., Johansen, J., Cheng, Y. and Farooq, S. (2019), "Evaluating indicators for international manufacturing network under circular economy", Management Decision, Vol. 57 No. 4, pp. 811-839. https://doi.org/10.1108/MD-05-2018-0565