Optimization-based model of a circular supply chain for coffee waste

Abstract

Spent coffee grounds (SCG) waste poses significant environmental challenges, including greenhouse gas emissions and contamination risks. However, the existing reverse logistics (RL) systems remain inefficient, costly, and prone to contamination. Although previous studies have explored RL strategies, economically viable logistics models for small-scale SCG operations remain underdeveloped. However, the role of digitalization in optimizing SCG collection has not yet been explored. This study addresses these gaps by developing and evaluating sustainable business models that integrate circular economy principles with Industry 4.0. A mixed-integer linear programming (MILP) model was formulated to optimize the location, allocation, and routing decisions for “circular coffee shops, ” which serve as local collection and preprocessing nodes. Using real data from 1000 coffee shops in Montreal, three case scenarios were analyzed to assess the impact of pre-drying technologies and smart logistics on cost reduction and environmental performance. The results show that, while smart bins and real-time data analytics improve network efficiency and sustainability, the strategic placement of pre-drying technologies significantly reduces transportation and processing costs. By introducing a novel framework that integrates digitalization and collaborative waste management, this study advances SCG valorization and minimizes waste-related environmental impact. The findings offer actionable strategies for municipalities and food service stakeholders, providing a scalable, data-driven approach to promote the adoption of circular economy principles in urban organic waste management.