EASTERN ACADEMIC FORUM

Construction on Cluster Green Supply Chain Based on Circular

Economy
WANG Ling
Economics and Management School, Wuhan University, Wuhan, China
wangling@126.com

Abstract: Cluster supply chain, act as a new kind of the development of supply chain, was a kind of
more complex supply chain network. The management of cluster green supply-chain was a model of
modern management, proposed to meet the need of the target of sustainable development of society and
economy and of the promotion of enterprises' core competence. On the basis of it, the features of cluster
green supply chain were expatiated on circular economy, the green assessment indexes of cluster green
supply chain performance assessment were established. Some measures about cluster green supply chain
performance management and control strategies were put forward including strengthening the
construction of converse cluster supply chain to form closed loop cluster supply chain, reinforcing
cluster supply chain ‘green’, and so on.
Keywords: Circular economy, Cluster, Green supply chain

1 Features of Cluster Green Supply Chain Under the Mode of Circular Economy

Cluster green supply chain management from such a point of view: the logistics enterprises should be
from the angle of the total cost, considering all the operation effect and environmental effect, and the
optimization is not one-sided pursuit of functions such as procurement, production and distribution.
Cluster green supply chain management purposes, is based on supply chain coordination between all the
core business activities, to achieve the best performance. In addition to the realization of economic
interests, but also emphasize resource conservation and environmental protection. It has the following
characteristics:
(1) Good combination can realize the supply and demand. In the supply chain, many suppliers,
manufacturers, distributors and retailers have all kinds of connections with the contact. Long and
complex distribution channels that the consumer feedback speed is slow and messy, even distortion, so
that the supply can not be coordinated, logistics enterprises to attend to environmental problems. Cluster
green supply chain management of industrial relation set them closely together, and coordination and
optimization of economic interests, not only takes into account, and consider the environmental effect,
so that the formation of a good relationship between each link, the circulation channel is shortest, which
can make the consumer demand information along the supply chain reverse accurately and quickly
feedback to the manufacturers. Manufacturers make rapid reaction and ensure supply.
(2) Promote the use of modern means by logistics enterprises. The widely used of information
technology in the cluster of green supply chain management is the key to its success. In the network
structure, information technology realize data fast, accurate delivery, improve the automation of
warehouse management, handling and transportation, procurement, processing, packaging, storage,
order processing, transportation, distribution, integration. In the cluster green supply chain, the flow of
information greatly increased, the demand information and feedback information not transfer gradually,
but the network transmission, requirements of logistics, capital flow, and information flow must be
smooth operator, which prompted logistics enterprises to adopt advanced technology and equipment, to
provide good service to customer. Production and circulation scale is larger, more to consider the
environmental pollution, reduce resource consumption problem, is the need of modern logistics
technology, information technology and management methods.
(3) It can reduce the pollution of logistics activities on the environment, and reduce resource
consumption. Cluster green supply chain management require all the links getting optimized, the use of

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advanced equipment to make product and information flows rapidly in the network chain, in order to
achieve consumption and environmental impact of the minimum degree and maximum resources,
reduce inventory and capital, shorten the circulation line, so as to effectively reduce the cost of
circulation.

2 Evaluation Indicators of Cluster Green Supply Chain

From the perspective of supply chain, its pursuit is the whole system’s profit maximization or the lowest
cost, and the cluster of green supply chain management is through the different single core enterprise
division, mutual coordination, in the premise of environmental protection, it pursuit the overall
performance of the supply chain. Thus, cluster green supply chain management in the environment as
the primary problem to be solved. Therefore, effects of cluster green supply chain performance not only
the factors of traditional supply chain, the core is the green degree of cluster green supply chain, reflect
the environmental performance indicators in the supply chain.
Based on the cluster analysis of the influencing factors of the green supply chain management
performance, this paper puts forward the asset management, cost and benefit, customer service, business
process, the environmental performance index of five one class, combined with the domestic and foreign
experts in the literature evaluation index of performance of supply chain, from the five aspects of the
preselected 31 evaluation indexes as the theoretical preselected indices, constructed a two level structure
of evaluation index system. As shown in table 1.

Table 1 Cluster green supply chain performance evaluation index system

One class index Two level index
Supply chain is the rate of return on total assets
Financial Supply chain cash turnover rate
value The rate of assets and liabilities
The supply chain profit growth rate
Supply chain is the rate of return on net assets

Customer Total order cycle Order fulfillment rate

service Stock out frequency On time delivery rate
Customer value ratio Warranty return rate

Logistics cost Recovery cost

Cost and Waste disposal costs
benefit Pollution treatment cost
The total cost of the supply chain
The supply chain profit growth rate
Supply chain return rate
Environmental governance costs
Product flexibility
Business Supply chain reflect the time flexibility
process Information exchange frequency
The rate of production and marketing
Production rate
Transfer time efficiency

Pollution reduction
Raw material and energy utilization ratio
Environmental
The proportion of waste
performance
Raw material and energy utilization ratio
Product recovery rate
Harmless materials usage

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3 Cluster Green Supply Chain of Circular Economy Construction

Traditional economy is the "resources -- products -- waste -- pollutants" open loop economy, using this
model of economic development on resources is extensive and one-time, large consumption of resources,
serious pollution of ecological environment. Circular economy take the ecological law as a guide, under
the mode of circular economy, society calls for a supply chain management which social and economic
benefits can be achieved "win-win". In order to meet the requirements of circular economy on the
supply chain, we need to build on the supply chain, strategic thinking to change the supply chain to
conform to the goal of sustainable development, from the pursuit of economic interests to economic
benefits, social benefits and ecological benefits of considering multiple objectives. So pay attention to
the construction of reverse supply chain, format closed-loop supply chain. Closed-loop supply chain not
only includes the traditional forward supply chain, but also contains the reverse supply chain of waste
products recycling and reuse. From the logistics point of view, the closed-loop supply chain is
essentially the product being delivered and reverse recovery, reuse, so that the ring opening process of
traditional into closed loop "resources -- -- -- -- -- production and consumption of renewable resources"
feedback cycle process. Closed-loop supply chain requires in the product design stage, we must take full
account of the product’s recovery and reuse, component design based on modularization, standardization
principle, operation process of product meet the low energy, low pollution, low consumption principles,
the circular economy and the reduction principle completely. Supply chain performance supply chain
"closed-loop" material flow: longitudinal increase in reverse logistics, the loss value of the waste
products turn to resources; then realize resources across the industry cycle. The mode of supply chain is
a "closed loop", not only the upper reaches of the supply chain products can provide useful input to the
downstream firms, upstream enterprises discharge waste can be recycled by the enterprises or other
enterprises reuse. Supply and demand relation between the node enterprises of supply chain is not only
reflected in the node enterprise products, also reflected in the waste between enterprises.
Mode of supply chain management after the reform not only makes the resource utilization improve
greatly, but also reduce emissions in nature, decrease the side effect of environment, the circular
economy "reduction, reuse, recycle" principle, which is the circular economy based on sustainable
development model of supply chain.

4 Implementation of the Strategy of Cluster Green Supply Chain Management

Under the Mode of Circular Economy

(1) The green design of cluster products. Green design of cluster is in the process of product design, the
advantage of cluster industry to demonstrate the influence of product on the environment and resources
in the whole life cycle, in the fully considered of the product function, quality, time and cost, at the same
time, we promote no waste, recyclable design technology, it takes the economic cycle (3R Reduce,
Reuse, Recycling) concept directly into the product development stage, makes the product minimum
consumption of environmental impact and resource.
(2) Cluster of green products manufacturing process. The manufacturing industry is the pillar industry of
the national economy, it is the large consumption of resources, but also cause environmental pollution
source industry. Under the mode of circular economy, the traditional manufacturing industry should be
rooted in the local domain, continue to attract related businesses to join together, so that the cluster can
have the function that is constantly self expansion and self innovation, through the core of enterprise
network organization horizontal foundation, related to SME weaving new manufacturing mode forming
longitudinal supplementary form a set of optimal resource utilization and environmental protection in
one of the network, to achieve resource conservation, rational use of resources for the purpose of. The
implementation of green manufacturing includes green selection of raw materials and green
manufacturing process. The selection of green materials includes two aspects of meaning, on the one
hand, refers to the raw material selection should consider its own environment characteristics, that is

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green, the material is non-toxic, biodegradable, renewable, and try to recycle the resources or the
production process by-products, residues and other production wastes as raw materials; on the other
hand, refers to the raw material supplier green supplier timely to production department, in addition to
supply high quality raw materials, the purchasing manager should manage the suppliers for
environmental management, the supplier is included in the environmental management system of the
enterprise, help supplier to improve the ability of environmental management. Green manufacturing
process requires the adoption of cleaner production technology, to reduce the consumption of raw
materials and energy, improve the efficiency of resource use, and reduce the production of waste output.
(3) R & D waste production cluster reuse technology. At present, the production of waste is an important
source of environmental problems, a serious waste of resources. On the one hand, reuse the production
waste can reduce emissions of the nature, reduce side effects of environment, on the other hand, using
rate of resources is greatly improved, thus saving resources, economic benefits, at the same time,
obtaining the reduction of resources. But the reuse of waste separation needs the technology of recycling
technology for economic and feasible. Compared with developed countries, our country’s waste
recycling technology is relatively backward, and a lot of waste recycling cost is too high. Therefore, it is
our country’s urgent to solve problem that discuss the advantage of industry cluster to and development
of recycling technology of waste, reduce the cost of recycling waste, waste utilization.
(4) The development and optimization of logistics cluster waste conveying technology. First, to integrate
the regional resources superiority, strengthen the cooperative effect between the supply chains of the
implementation of green transport strategy, such as the implementation of intermodal transportation,
improve the use of "green" means of transport rates, advocate electrified railway transport and sea
transport, reducing emissions. Secondly, it should also be collaborative research for new technology of
waste transport, optimization of transport process. To coordinate the relationship between transportation,
transportation costs, waste value and environmental performance is the core problem of logistics
technology.

5 Conclusion

This paper has made the detailed introduction of the cluster green supply chain which under the mode of
circular economy from the following four aspects: assessment cycle characteristics, cluster green supply
chain economic mode of cluster green supply chain performance of "green" evaluation system of
circular economy, cluster green supply chain construction, implementing strategy of cluster green supply
chain management under the mode of circular economy. In order to make the cluster green supply chain
management adapt to the social and economic sustainable development objectives, enhance the core
competitiveness of enterprises, optimize the enterprise’s logistics activities, improve the utilization
efficiency of resources of enterprises, make enterprises establish from the overall consideration, protect
environment, and pursuit long-term interests concept.

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