Designing Value Chains for Industry 4.0 and a Circular Economy: A Review of the Literature
Abstract
:1. Introduction
- The prior literature reviews do not typically explore the digital CE in the value chain.
- There is little evidence of leveraging I4.0 and the CE to design value chain activities.
2. Methods
3. State of the Literature
3.1. Managing Primary Activities
3.1.1. Inbound and Outbound Logistics Capabilities
3.1.2. Marketing, Sales, and Services
3.2. Managing Value Chain Supporting Activities
3.2.1. Infrastructure Development
3.2.2. Human Resource Management
3.2.3. Technology Development
3.2.4. Procurement
4. Contributions
5. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Conflicts of Interest
Appendix A. Studies Focused on Industry 4.0 and Value Chain Activities
Author(s) | Key Findings |
[19] | A better understanding of government, suppliers, international organizational interests, and expectations around the IoT is necessary for the transition to Industry 4.0’s circular economy. |
[88] | It has been shown that the implementation of CP and the CE and making a solid contribution to sustainability is made easier through Industry 4.0. |
[89] | Even though modern technology provides new and innovative solutions to the CE, scholars do not seem to be using it. |
[90] | It is suggested that numerous issues are hindering the implementation of the I4.0–CE model, including the lack of government support and incentives and the lack of policies and protocols. |
[91] | Based on research findings, it appears that the key resources needed for implementing Industry 4.0 are manufacturing systems, human resources, project management, leadership, green logistics, design, information technology, big data analytics, and collaborative relationships. |
[92] | The infrastructure development decision is strongly affected by market conditions and uncertainty. This study highlights the link between business analytics and closed-loop control strategy. Determine how to utilize intelligent manufacturing in network relationships. Deployment of new IT infrastructure is much needed. Examine the effects of human–machine interactions in facilitation of CE practices from the perspective of I4.0. |
[93] | Firm-level capabilities simultaneously affect the competitive position and management of presales, after-sales services, and product delivery in a short period. The authors also discuss the new challenges firms face in developing new business models, applying I4.0 associated technologies to achieve greater flexibility and improvement in product design, and leadership in pricing strategies. |
[94] | The core hypothesis of the study is that the adoption of I4.0 improves sustainability dimensions. How investment decisions in technology influence social and environmentally sustainable development. The new forms of technology can best support the value chain activities and control mechanisms to support production in a resource-efficient way. |
[95] | The involvement of multiple stakeholders is important for designing circular strategies to create value for customers. The design for the circular product–service system is at the initial stage. It often depends on value chain activities and, as a result, has to understand multiple stakeholder needs and expectations. |
[13] | Investment in infrastructure and government support is a key enabler of circular business models. |
[96] | Operational flexibility and efficiency are positively associated with developing the I4.0 strategy. There is a need to understand how political and legal boundaries, cooperation and collaboration, and state-of-the-art open and flexible IT infrastructure affect a wider broadband deployment within the region. The presence of I4.0 might have a negative impact on human health and safety issues. Do domestic laws support firms in implementing I4.0 associated technologies. |
[97] | Challenges found related to data quality and management and development of IoT enable circular economy strategies. |
[98] | I4.0 associated technologies positively support flexibility, integration, and real-time prediction of quality issues to achieve all organizational performance. Identifies ten organizational performance measures and consequences for creating a learning environment and managing a performance-oriented manufacturing system. |
[99] | The impact of business analytics is greater on the circular economy for manufacturing firms. A more complex issue in the value chain is “sustainable consumption”, which requires greater attention, and is more likely to govern BDA capabilities to extract finite and virgin resources. Along with production, the full extent of circular economy performance is expected to determine whether BDA capabilities foster efficiency and productivity. |
[100] | “CPS, one of the main elements of Industry 4.0, incorporates specific technologies and characteristics and can be applied in several areas of society, including health, mobility, production and logistics” (p. 11). |
[101] | The study emphasized that decentralization and networking building with different actors bring more opportunities for sustainable manufacturing. Consider various life cycle management approaches for design and maintenance. This study also highlighted the impact of cleaner production, big data, social manufacturing relationships with industrial symbiosis, collaboration, and logistics 4.0 for a circular economy. |
[102] | This study has emphasized the importance of establishing strategic management for technology deployment. In this study, attention is devoted to the degree of institutional involvement. |
[103] | I4.0 associated technologies are critical for lean manufacturing and highlight the supply chain partners’ capacity for technical support and development of human resource management. There is also a need for institutional, regional, and national level support to develop platforms for moving forward towards inbound logistic management. |
[29] | “Adopting the circular I4.0 perspective, managers can choose their CE targets, and according to them, identify the set of I4.0 technologies that best support the managers’ strategy. Authors confirm that I4.0 technologies positively effect the life cycle management of products” (pp. 1678–1679). |
[104] | Involvement of customers in the design and manufacturing process, and increased proximity geographically. The authors identify factors that can affect the implementation of I4.0 over the value chain: (1) “transform the organization to the required degree of change as a result of industry”; (2) “cross-functional management control capabilities”; (3) “build a service-centered alternative to the traditional goods-dominant (G-D) paradigm for understanding economic exchange and value creation”; (4) “Industry 4.0 is dependent on the extent of digitization and flexibility of the supply chain”; and (5) “creating the proper culture and necessary alliances within the organization”. |
[105] | The significance of I4.0 in manufacturing is well documented. Recent advancements in technological innovation revolve around addressing barriers and challenges of the Industry 4.0 revolution. Firms operating in developing countries could take more advantage to pursue infrastructure development, focus on employee training with digital tools, upgrade skills, and develop close operations with different stakeholders. Examining the influence of investment allows the company to develop infrastructure. |
[106] | Highlights the importance of understanding HRM for improving human–machine interaction for effective product life cycle management. The authors develop a framework for value chain activities and suggest enablers for effective supplier commitment, sustainable procurement, digitalization of supply chain activities, and tracking real-time supplier activities. The authors highlight the adoption of cyber–physical systems, flexible manufacturing, continuous material reduction, information sharing, and reverse logistics networks. |
[107] | Discusses the potential implication of digital twins in “human–machine collaboration”, “sustainable smart manufacturing”, and “sustainable product life cycle management”. |
[108] | Firms that implement I4.0 are more likely to upgrade flexibility and agile manufacturing and effectively reduce material costs. PLC, acquisition of raw material from suppliers, reusing, remanufacturing, recovery, recycling, and management of the logistics, should be based on vertical and horizontal integrations. “Simulation technology in I4.0, using VR, is an integral process to simulate all industrial processes (p. 916)”. |
[109] | The study results suggest that industrial partners must develop an IoT business model, find and develop flexible structures across geographically dispersed customers, and develop omni distribution channels with the support of I4.0 associated technologies. |
[110] | First, developing more service-oriented products and improving the internal engineering process can gain more value from external customers. Increase the level of product service offering resulting in the establishment of competitive advantage. |
[111] | Digital cooperation and integration function as options to expand the exploration of knowledge regarding the new procurement dynamics. Firms are more likely to focus on developing new organizational cultural practices, managing institutions and regulations, and increasing communication using new digital tools of Industry 4.0. |
[112] | Manufacturing firms need to focus on end-of-life cycle management to facilitate eco-design and life cycle management practices in I4.0. These include I4.0 associated technologies to manage the product life cycle. A strong relationship is observed in upgrading technological infrastructure and improvement in end-of-life products. |
[113] | This study informs that I4.0 facilitates management functions. The rise of I4.0 practices provides more opportunities to reorganize value chain activities, such as technological integrations, organizational restructuring, and human resource practices. Manufacturing firms need to develop technological capabilities to manage value chain activities. |
[5] | Firms focus on big data analytics, strong collaborative capabilities, and especially assistance support from the government for economic performance and development of circular business models. |
[6] | This study highlights the importance of management strategy towards information retrieval, sharing product management data with different stakeholders, improving material efficiency, and using environmentally friendly materials for green and improved manufacturing process. |
[114] | The author highlights some of the main challenges of value chain analysis and discusses the existing partner relationships and competencies needed to support sales activities, technology, and product innovation capabilities for designing new business models. He suggests that companies design capabilities for the marketing product service system, integrating and mobilizing blended digital strategies to create value using IoT platforms and linking to create and capture value. |
[115] | Creating new service design and focusing on human resource development to support I4.0 initiatives to drive organizational changes for autonomous operations and increase innovation performance. |
[116] | Digitalization infrastructure upgrading acts as a bridge between the circular economy to help firms reduce waste and add value to the process. |
[117] | Manufacturing firms operating in I4.0 need to develop individual levels of human–machine interaction, particularly in production. This study highlights that I4.0 associated technology and the integration of humans in manufacturing are important. It can also support ongoing firm economic performance. |
[118] | Marketing activities are likely to enhance consumer trust in remanufacturing products. Price considerations of upcycling products with high variety and quality are important factors enhancing consumer trust. In addition, joint funding cooperation can create initial collaborative business ties. |
[119] | Smart transportation encourages material delivery with efficiency and enables logistics to create value. |
[8] | Industrial symbiosis is key to achieving performance using data-driven insights on reducing, reusing, and recycling materials. |
[120] | Firms with big data analytics applications have potential opportunities with the value of growth opportunities. |
[121] | When it comes to the digital and automated manufacturing environment, Industry 4.0 and its other synonyms such as smart manufacturing, smart production, and the IoT have been identified as major contributors. |
[122] | To increase their competitive position, firms require investment in infrastructure (technical infrastructure). Organizational transformation plays a crucial role in accumulating more resources. |
[123] | The value creation process often starts with the application and use of digital tools. Digitization capabilities are more important than conventional capabilities. |
[124] | Manufacturers that center on technology development have increased operational reliability—contracting on maintenance agreements and parts of service influence the level of a close relationship. |
[125] | At the center of servitization companies can exploit the reverse and forward supply chain. Therefore, IoT generates positive benefits and permits to development of comprehensive product biographies. |
[126] | The product–service system requires supplier–customer relationships that develop new business models, internal organizational structure, and customer management about improving the repair, maintenance, product, and process upgrade are beneficial for suppliers. |
[127] | Low formalization contracts for product and service design play a complementary role in transforming business models and influencing consumer attitudes. |
[128] | Manufacturers can gain circular economy performance with greater flexibility in contracting. Provide infrastructure support for service delivery networks and key partners. |
[129] | Governments and businesses agree to develop standards with a greater level of explicit cooperation. |
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ID | Query | Web of Science™ Documents by Topic | Scopus™ Documents by Title, Abstract, and Keywords |
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1 | TITLE-KEY (Industry 4.0 AND application AND Circular Economy) AND (LIMIT-TO (LANGUAGE, “English”)) | 16 | 28 |
2 | TITLE-KEY (Industry 4.0 AND application AND internet of things) AND (LIMIT-TO (LANGUAGE, “English”)) | 502 | 620 |
TITLE-KEY (Circular Economy AND Value Chain) AND (LIMIT-TO (LANGUAGE, “English”)) | 96 | 129 | |
TITLE-KEY (Circular business model AND Value Chain) AND (LIMIT-TO (LANGUAGE, “English”)) | 29 | 35 | |
3 | TITLE-KEY (Fourth Industrial Revolution AND application AND industrial internet of things) AND (LIMIT-TO (LANGUAGE, “English”)) | 68 | 88 |
4 | TITLE-KEY (Industry 4.0 AND Business Model) AND (LIMIT-TO (LANGUAGE, “English”)) | 510 | 552 |
5 | TITLE-KEY (Internet of things AND Fourth Industrial Revolution AND Business Model) AND (LIMIT-TO (LANGUAGE, “English”)) | 44 | 61 |
6 | TITLE-KEY (Circular Economy AND Business Model) AND (LIMIT-TO (LANGUAGE, “English”)) | 26 | 43 |
7 | TITLE-KEY (Circular business model AND IoT) AND (LIMIT-TO (LANGUAGE, “English”)) | 23 | 34 |
Key term search performed on 4 August 2021 |
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Inbound and Outbound Logistics Capabilities |
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Marketing |
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Sales and Services |
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Key Themes | Future Research Opportunities |
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Infrastructure Development |
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Human Resource Management (HRM) |
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Technology Development |
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Procurement |
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Awan, U.; Sroufe, R.; Bozan, K. Designing Value Chains for Industry 4.0 and a Circular Economy: A Review of the Literature. Sustainability 2022, 14, 7084. https://doi.org/10.3390/su14127084
Awan U, Sroufe R, Bozan K. Designing Value Chains for Industry 4.0 and a Circular Economy: A Review of the Literature. Sustainability. 2022; 14(12):7084. https://doi.org/10.3390/su14127084
Chicago/Turabian StyleAwan, Usama, Robert Sroufe, and Karoly Bozan. 2022. "Designing Value Chains for Industry 4.0 and a Circular Economy: A Review of the Literature" Sustainability 14, no. 12: 7084. https://doi.org/10.3390/su14127084