Industry 4.0 and circular economy: Operational excellence for sustainable reverse supply chain performance

Abstract

Abstract The present research proposes a roadmap to the excellence of operations for sustainable reverse supply chain/logistics by the joint implementation of principles of Industry 4.0 (I4.0) and ReSOLVE model of circular economy (CE) approaches. The connection between I4.0 and CE is unveiled by addressing the case-based model affecting the economic and environmental performances imparting two important dimensions: (i) the information sharing with the reverse logistics system is in real-time mode, and (ii) diffusion of green product in the market. The effectiveness of the virtual world in I4.0 environment is explored using simulation of reverse logistics model involving operations such as inventory and production planning policy, family-based dispatching rules of remanufacturing, and additive manufacturing. The remanufacturing model examines the trade-off between set-up delays and the availability of green transportation. For managerial insights, Taguchi experimental design framework has been used for the analysis. Based on the trade-off analysis between environmental and economic performances, the findings of the paper suggest appropriate combinations of information-sharing and family-based dispatching rules. Further, the findings suggest that, given the I4.0 and circular capabilities, it is necessary to focus on the cost of the socially influenced operations involving factors such as collection investment and size of the end-user market that governs the product returns. Therefore, in the present paper, the integration of I4.0 and CE represents a real-time decision model for the sustainable reverse logistics system.