Industry 4.0 deployment for circular economy performance—Understanding the role of green procurement and remanufacturing activities

Abstract

As regulatory authorities emphasize sustainable practices, manufacturing organizations rely on Industry 4.0 technologies to shift their business model from a linear to a circular economy. While intuitively this transformation seems straightforward, in reality, it is rather nuanced, thereby necessitating scholarly investigation into process‐based antecedents of circular economy performance of organizations. This study used structural equation modeling to analyze empirical data from 278 Indian manufacturers. Largely, the results demonstrate that the adoption of Industry 4.0 technologies does have a significant effect on the performance of the circular economy within these organizations, owing to their strong influence on green procurement and remanufacturing activities. Additionally, the results show that these process activities (e.g., green procurement and remanufacturing) do mediate the interaction between the deployment of Industry 4.0 and circular economy performance.