Digital Technologies Enabling Component Reuse in Circular Value Chains: Using Digital Twin, Internet of Things and Robots in Construction and Manufacturing Sectors

Abstract

The reuse of components is a highly impactful way to implement the circular economy (CE) and limit negative environmental externalities in material‐intensive industries, such as construction and manufacturing. Although research integrating digitalisation and the CE has proposed a wide range of digital technologies to facilitate component reuse, these studies have limited their focus to single technologies and are centred on single firms, explaining how a single digital technology can support a single value chain actor to implement a specific circular solution. Consequently, we lack a comprehensive understanding of how digital technologies can enable the implementation of diverse component reuse practices—from design and disassembly to reassembly—undertaken by multiple actors in circular value chains. Against this backdrop, we conducted a qualitative multiple‐case study of how three digital technologies—addressing data‐driven modelling and analytics (Digital Twin), data collection and monitoring (Internet of Things [IoT]) and data‐informed automatisation (robots)—advance component reuse practices in construction and manufacturing value chains. Data were gathered from case companies through interviews, over 3 years of ethnographic observation supplemented with document analysis, and secondary sources. Three key results emerge from our study: first, these digital technologies offer eight enabling functions and thereby three fundamental instrumentalities for value chain actors to implement component reuse practices: knowledge optimisation, planning optimisation and improved operationalisation. Second, they offer five categories of business‐ and management‐related benefits, namely, circular systems design for reuse, improved physical processes, enhanced management of circular value chains, economic value optimisation and innovation and development. Third, benefits are realised at three levels within value chains, that is, individual actors, partnerships and entire value chains, allowing us to identify diversified scopes of benefits. Our findings are synthesised into a conceptual framework explaining in relative detail how digital technologies enable component reuse within circular value chains. This study contributes to the digitalisation and CE research and provides practical insights for both sectoral value chains and individual value chain actors on how digitalisation can maximise the effectiveness of component reuse to advance the CE transition.