A SAP-LAP linkages framework for integrating Industry 4.0 and circular economy

In the recent years, the two increasingly popular topics, namely, Industry 4.0 and circular economy (CE) have attracted the attention of many academicians and practitioners. However, the connection between CE and Industry 4.0 has not been much investigated in the literature. Motivated by this gap, the purpose of this paper is to integrate these two streams and attempt to understand the new paradigm of Industry 4.0 for resolving the issues pertaining to CE principles.

The study uses situation, actor, process, learning, action, performance (SAP-LAP) linkages framework to analyze the applications of Industry 4.0 mechanisms in realizing the issues of current CE business models. This is done through the interpretation of the cross-interaction and self-interaction relationships among the different interfaces/elements of SAP-LAP.

The results suggest that top managers are the most essential actors for integrating the use of Industry 4.0 to achieve sustainability, in the light of CE. In addition, advanced technologies such as Internet of Things and cyber-physical systems are the most important Industry 4.0 actions that help in improving the CE performance parameters.

This qualitative study is an attempt to analyze and assess the strategic issues pertaining to Industry 4.0 standards in CE. The study identifies learnings (challenges/opportunities) and the corrective actions which are imperative toward achieving CE principles. This study will guide managers and policymakers to understand the importance of implementing Industry 4.0 for accomplishing CE principles.

This study integrates two important streams of literature – Industry 4.0 and CE. Thus, this paper offers insights about the importance of Industry 4.0 standards in achieving CE principles.