Developing A Digital Supply Coordination (DSC) Based Upcycling Repurposing Model: Optimizing The Margins of Circular Economy MSMEs in Padang Lawas Regency
DOI:
https://doi.org/10.37385/xbjtbn80Keywords:
Circular Economy, Digital Supply Coordination, MSME Margin, Repurposing, UpcyclingAbstract
The transition toward a circular economy provides opportunities for Micro, Small, and Medium Enterprises (MSMEs) to increase the economic value of resources through upcycling and repurposing. However, their implementation continues to face several challenges, including uncertainty in raw material availability, weak coordination among supply chain actors, limited market-demand information, and the lack of digital integration among suppliers, producers, distributors, and consumers. These conditions may increase transaction and operational costs and consequently reduce MSME profit margins. This article aims to develop a conceptual framework for a Digital Supply Coordination (DSC) model to support upcycling repurposing activities and optimize the margins of circular economy MSMEs in Padang Lawas Regency. A conceptual approach is adopted by integrating literature on circular economy, upcycling, repurposing, supply chain digitalization, supply chain coordination, and MSME performance. The proposed model consists of five main components: digital resource mapping, digital supplier coordination, production coordination, digital market coordination, and margin optimization. Integrating these components is expected to improve information transparency, raw material supply certainty, production efficiency, distribution accuracy, market access, and MSMEs' ability to create added value from previously low-value materials. The conceptual novelty lies in integrating upcycling–repurposing practices with DSC, oriented not only toward environmental sustainability but also toward creating and optimizing MSME economic margins. The proposed framework provides a foundation for subsequent empirical testing among circular economy MSMEs in Padang Lawas Regency.
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