An analytics-based structural modeling study of circular practices in sustainable supply chains

The importance of sustainability has significantly increased for many companies in recent years. However, limited studies have explored the integrated impact of circular economy practices, dynamic capabilities, and fields of action on supply chain sustainability. This study addresses this gap by applying circular economy principles within retail‑equipment supply chains to evaluate their impact on the economic, environmental, and social dimensions of sustainability. A comprehensive review of the relevant literature on circular economy, dynamic capabilities, fields of action, and sustainable supply chains facilitated the identification of 51 key indicators. To fulfill the research objectives, a retail-equipping manufacturing company was selected as the focal point of analysis, and data was collected through a structured questionnaire. We analyzed the data via partial least squares structural equation modeling (PLS-SEM) in SmartPLS 3, estimating a reflective–reflective hierarchical component model on n=131 responses to a 51-item instrument covering circular economy fields, dynamic capabilities, and sustainability outcomes. Results support seven hypotheses: both fields of action (H1–H3) and dynamic capabilities (H4–H6) positively affect economic, environmental, and social performance, and their joint effect is strong (H7: β = 0.73; R 2 = 0.54). The study presents an integrated, empirically validated model that links circular economy dynamic capabilities and fields of action, thereby extending dynamic capabilities theory into the sustainability domain. The findings suggest that circular economy principles not only support environmental protection and cost efficiency but also enhance organizational agility, stakeholder satisfaction, and resilience. While the specific outcomes may vary across industries, this study offers a robust foundation for future research and practical insights to guide strategic decision-making for companies aiming to transition to more sustainable, circular supply chains. The model provides actionable diagnostics to prioritize investments in design, reverse logistics, and capability development aligned with triple-bottom-line goals in manufacturing.