The circular economy and Industry 4.0: synergies and challenges.
| Autor | da Silva, Tiago Hennemann Hilario |
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Introduction
The circular economy (CE) is an economic system that aims at reducing resource consumption and eliminating waste, while promising economic development continuity (Kouhizadeh, Zhu, & Sarkis, 2019). The CE is still an emerging concept, and as such, it still lacks implementation tools, and its possible connection to digital technologies is still not widespread. In most instances, transition towards CE requires rethinking and redesigning business models and current routines (Kristoffersen, Blomsma, Mikalef, & Li, 2020).
Within those new business models, new digital technologies may bolster said transition through collecting, analyzing and integrating data. Earlier studies on the themes have shown CE and Industry 4.0 (I4.0) advancements as a potential future for organizations, with those concepts being quickly adopted by several organizations to reach global sustainability. I4.0 and CE facilitating factors have broad influence on supply chain-related activities, with suppliers being considered an essential component in that process and, thus, activities connected to them having direct effects on the supply chain sustainable performance (Yadav, Luthra, Jakhar, Mangla, & Rai, 2020). Moreover, we cannot ignore the COVID-19 pandemic influence; it has affected the processes of all those productive chains virtually, causing organizations blocking, social isolation, people distancing and labor migration. This scenario leads companies to question their location and investment strategies (Kumar, Singh, & Dwivedi, 2020).
Therefore, this study presents new paths and challenges amid the technologies related to I4.0 and their interfaces with the CE. It brings the research proposal of answering the following question: based on previous studies, which are the new paths and challenges in the relationship between CE and I4.0? To answer this question, this research objective is to analyze studies approaching the existing interface between CE and I4.0. To this end, a systematic literature review (SLR) of 63 articles has been conducted. To hold up the proposal, this paper is structured - after this section - as follows: a theoretical background, covering CE and I4.0; a section on methodological procedures, describing the SLR protocol; the result presentation and analysis and finally, the conclusions.
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Circular Economy and Industry 4.0
This section discusses the foundational concepts of the study. We start by the key CE definitions and then discuss I4.0. Both sub-sections prioritize concepts raised by the authors covered by the SLR.
2.1 Circular economy
The CE proposes reducing structures, waste and demand for limited virgin material, as well as promotes eliminating the idea of environment as a "sinkhole" to dump used materials; moreover, resource loss and destruction shall be reduced or eliminated through lower pollution and lower biodiversity loss in habitats associated with resources extraction (Kristoffersen et al., 2020). This model offers a sustainable solution for the disposal issue and minimizes the need for virgin material for manufacturing purposes. This concept has been widely appreciated throughout the world to accommodate the challenge of implementing a greener economy and more effective environmental resources usage (Chauhan, Jakhar, & Chauhan, 2021).
CE requires engaging in several sustainable practices, as global agendas highlight that economic development must also consider social and environmental aspects (Sehnem, Provensi, Silva, & Pereira, 2021). With that, CE might encompass all three major sustainability dimensions: economic prosperity, social justice and environmental quality (Elkington, 1994). Therefore, fundamental changes are necessary in social, industrial and consumption spheres for CE implementation. The CE is a promising approach to reach sustainable development, as manufacturing companies perform a vital role on its implementation at the industrial level, based on their influence on product life cycle definition (Pieroni, McAloone, & Pigosso, 2021). In this context, the CE performs an important duty in industrial production, promoting traits like resource recycling and materials - and also energy - use minimizing. It aims to benefit the economy, the environment and society and to reach great balance and harmony among the three. The CE is perceived as a new business model in which balance and harmony between economy and society is expected to be reached (Ma, Zhang, Yang, Ren, & Liu, 2020). In summary, it is the system that proposes replacing open linear inefficient production cycles' waste by close cycles, in which waste is minimized or converted into value entries, contributing to productivity increase, optimizing natural and human resources use. The CE is by definition restorative and regenerative and aims at keeping products - classified in technical and biological -, components and materials at prominent level of utility and value (Sehnem, Vazquez-Brust, Pereira, & Campos, 2019).
The CE lays on many pillars. In this study, some of them are highlighted: (1) 10 R's (refuse, rethink, reduce, reuse, repair, refurbish, remanufacture, repurpose, recycle and recover) may help companies to get competitive advantage (Bag, Gupta, & Kumar, 2021); (2) cleaner production, which aims at being sustainable through energy conservation, emission reduction and higher production efficiency, is a basic approach that seeks to optimize process environmental management (Ma et al., 2020; Lu et al., 2020); (3) product-service system, which encompasses products, services, agent networks and support infrastructure, working with a continuous flow with the objective of becoming competitive, meeting customer needs and minimizing environmental impact in comparison to traditional business models (Wang et al., 2020); (4) ReSOLVE model, a CE system that uses processes that apply recycling, reusing and remanufacturing within a closed system, which incorporates six guiding principles to this transition: regenerate, share, optimize, loop, virtualize and exchange (Kouhizadeh et al., 2019); and (5) industrial symbiosis, a structure that is based on industrial ecology to perform mutually beneficial cooperation among organizations, sharing water, resources, energy, by-products and residual material, so all agents profit from it; the industrial symbiosis projects material flows in which materials and energy consumption are optimized, residue generation is minimized and one process's effluents serve as input for other processes (Sehnem et al., 2019).
2.2 Industry 4.0
The I4.0 concept was first announced during Hannover Fair, in Germany, in 2011. The fair repost describes that I4.0 would create new values, build new business models and represent the solution for several social problems through communication networks based on emerging technologies (Chauhan & Singh, 2019). In recent years, this transformation has raised interest worldwide (Rejikumar, Raja, Arunprasad, & Sreeraj, 2019). I4.0 is guided by real-time data and offers alternative approaches to reach sustainable production and consumption, minimizing waste, energy consumption and environmental deterioration (Yadav et al., 2020).
I4.0 comprises different technologies, like Internet of Things (IoT), cloud-computing, additive manufacturing, cyber security, cyber-physical systems (CPSs), blockchain, augmented reality, artificial intelligence (AI), big data, simulation system integration and autonomous robots. I4.0 techniques carry capabilities of reducing energy, equipment and also minimizing human resource employment. It is a futuristic construction, which fosters the evolution and solution of autonomous production systems (Kumar et al., 2020). Nowadays, studies on I4.0 have become more popular, tracing to these technologies' recent advancements (Wang et al., 2020).
I4.0 tools may be used to integrate all productive processes' key functions and to share common data, information and knowledge throughout the supply chain. These tools can also be applied to automatize critical operational activities. Nonetheless, I4.0's major impact is its ability to produce and access information in real time, allowing better visibility and the risk mitigation in the supply chain network (Bag et al., 2021). Therefore, I4.0 has enabled companies to independently exchange information and perform activities and controls (Chauhan et al., 2021).
I4.0 is transforming operations management in areas such as industrial automation and manufacturing, supply chain management, lean production and total quality management (Kristoffersen et al., 2020). It bears the ability of using historical data to improve product quality by identifying abnormal behaviors and adjusting performance limits in productive systems. Additionally, better information sharing throughout the value chain helps operations real-time controlling and adjusting, according to variable demand, thus increasing operational efficiency and providing information on new products, services and business models' potential (Kristoffersen et al., 2020). With that, this approach builds on the integration of business and manufacturing processes, and all value chain agents are intricately connected to production and sustainability issues. Cleaner production and corporate social responsibility bring important implications to I4.0 advancements around the, world (Lu et al., 2020).
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Methodological procedures
For the theoretical basis setting, an SLR was conducted. It included the search items of previously published studies in Scopus and Web of Science databases. A total of 63 articles were found, all available in their complete form and published in high-impact journals. The search was done on October 17, 2020, in the following languages: English, Spanish and Portuguese. Each article was thoroughly read. To analyze the articles, the Tranfield, Denyer and Smart (2003) research protocol was adopted. Therefore, stages, phases, steps and...
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