Integrating risk management in implementing circular economy principles in the healthcare sector: a case study from Indonesia
Authors: Alfina Kartika Nur , Ratnayake R.M. Chandima , Wibisono Dermawan , Mulyono Nur Budi , Basri Mursyid 
Published: November 2024

Purpose

The purpose of this study is to explore the integration of risk management and circular economy (CE) principles within the healthcare sector to promote sustainability and resilience. Specifically, the study aims to demonstrate how risk management can support the transition to a circular economy in healthcare supply chains. By integrating risk management practices with CE principles, healthcare organizations can identify potential risks and opportunities associated with circular initiatives.

Design/methodology/approach

This study adopts a qualitative research approach, using a case study methodology with semi-structured interviews conducted at primary care facilities to understand the application of CE principles in practice. The study uses fuzzy logic methods to assess and mitigate risks associated with strategies promoting CE principles. Additionally, key performance indicators are identified to evaluate the effectiveness and enhance the resilience of these strategies within healthcare supply chains.

Findings

The study highlights the critical role of robust risk management strategies in facilitating the transition to a circular economy within healthcare organizations. Primary care facilities, which are critical to frontline healthcare delivery, are particularly vulnerable to product shortages due to supply risks. This study focuses on critical protective equipment, specifically latex gloves and assesses operational risks, including supply, demand and environmental risks, using a fuzzy logic-based model. Import delays were found to be a moderate risk, typically occurring once a year. The research highlights critical KPIs for a successful CE transition within healthcare supply chains, such as on-time delivery and service quality, which are directly related to the risk of supply chain disruption. In addition, the study highlights the significant impact of other CE strategies on healthcare supply chains, including localized production and manufacturing, innovation in product development, reverse logistics, closed-loop supply chains and the adoption of lean principles.

Practical implications

This study provides valuable insights for healthcare organizations to optimize resource efficiency, reduce waste and promote circularity in their operations. By implementing the proposed solutions and focusing on the identified KPIs, organizations can develop strategies to achieve sustainability goals and enhance resilience in healthcare supply chains.

Originality/value

This study contributes to the literature by demonstrating the application of risk management in facilitating the transition to a circular economy in the healthcare sector. The use of fuzzy logic methodology offers a novel approach to assessing and mitigating risks associated with critical product failures in supply chain activities. The study’s findings provide practical guidance for healthcare organizations seeking to integrate circular economy principles and improve sustainability performance.