Effects of supply chain practices, integration and closed-loop supply chain activities on cost-containment of biodiesel

Abstract

Recent research has pointed out that non-technical problems, rather than technical problems, are mainly responsible for the obstacles facing the development of the biodiesel industry. The present study focused on one such important non-technical problem: that of supply chain practices. More specifically, the aim of this study is to investigate the effect of supply chain practices on supply chain integration and closed-loop supply chain activities, and consequently, on the cost-containment of biodiesel producers. Data were gathered through a survey of 108 biodiesel producers and were analysed using the partial least squares technique. The results show that all three supply chain practices have a significant effect on supply chain integration and closed-loop supply chain activities and lead to cost-containment of biodiesel. The findings are useful for managers of biodiesel companies who seek to reduce the cost of biodiesel production and to position it as a feasible alternative to fossil fuels by adopting closed-loop supply chain activities and integrating the supply chain.