{"id":107824,"date":"2025-02-15T12:00:00","date_gmt":"2025-02-15T12:00:00","guid":{"rendered":"https:\/\/industry-science.com\/?post_type=article&p=107824"},"modified":"2025-02-11T16:14:22","modified_gmt":"2025-02-11T15:14:22","slug":"circular-economy-digitization","status":"publish","type":"article","link":"https:\/\/industry-science.com\/en\/articles\/circular-economy-digitization\/","title":{"rendered":"Circular Economy Enabled by Digitization"},"content":{"rendered":"\n

Global warming is one of the greatest challenges of the 21st century. Its impact manifests itself in extreme weather events and rising temperatures, which pose immense threats for both ecological systems and human civilization [1]. The increasing extraction and use of raw materials are closely linked to these climatic changes. Since 2017, the global economy has extracted and used almost more material than in the entire 20th century.<\/p>\n\n\n\n

In figures, that is over 500 billion tons [2]. The demand for resources to secure the standard of living of an expanding world population results in excessive material extraction and increased pressure on ecosystems [3]. Against the backdrop of these threats, the United Nations warn of a possible comprehensive collapse and emphasize the need for a sustainable use of resources [4].<\/p>\n\n\n\n

Circular economy as one solution to global warming<\/h2>\n\n\n\n

In view of intensifying environmental and economic challenges, political bodies such as the United Nations Environment Assembly (UNEA) and the Group of Seven (G7) are focusing on circular economy and sustainable supply chains<\/a> [5]. Procurement plays a key role in the implementation of circular economy strategies for manufacturing companies [6, 7]. The use of digitally networked platforms can improve the transparency and traceability of materials and products along the entire value chain [8].<\/p>\n\n\n\n

The optimization of supply chains in the context of sustainability through procurement not only leads to a reduction in CO\u2082 emissions but also enables companies to make their production processes more sustainable and resource-efficient [9]. This study investigates digitalization as a catalyst for circular economy practices in the procurement of manufacturing companies.<\/p>\n\n\n\n

Twin transformation in procurement<\/h2>\n\n\n\n

Companies moving towards digitalization goes hand in hand with the growing pressure to achieve sustainability goals [10]. Great opportunities arise once the digital transformation and the sustainability transformation are synergistically linked. This integration, also known as “twin transformation”, can increase the potential of both transformation processes by using their respective strengths to promote each other [10]. Thus, despite initially conflicting requirements, digitalization and sustainability goals can be effectively combined, which can lead to many competitive advantages [10].<\/p>\n\n\n\n

A starting point for realizing this synergy is reflected in the implementation of circular economy principles in procurement. The procurement process\u2014considering the entire life cycle of goods and services\u2014offers the most positive ecological, social and economic effects [11]. There are numerous definitions of the term circular economy in literature, as the article “Conceptualizing the Circular Economy (Revisited): An Analysis of 221 Definitions” illustrates [12].<\/p>\n\n\n\n

Circular economy is defined, among other things, as an economy in which the value of products, materials and resources is maximized over their entire life cycle with the aim of minimizing waste. In contrast to linear economy, which is rooted in a linear production and consumption model, circular economy is based on closing material cycles [5]. The ideal vision of circular economy rests upon the idea that no waste is generated in the conventional sense [13]. To look at the circular economy in detail, it is necessary to explain Lehmacher and B\u00f6decker\u2019s so-called 11R strategy [14]. Figure 1 shows a schematic representation of these 11R principles, including descriptions and examples.<\/p>\n\n\n\n

\"11-R
Figure 1: 11-R circular economy strategies ordered by circularity [14, 15, 16] (own illustration).<\/em><\/figcaption><\/figure>\n\n\n\n

The fundamental aim of all 11R strategies is to maintain or increase the economic value of a product for each usage cycle. The higher up the strategies are shown in Figure 1, the sooner they close the material cycle again and the fewer CO\u2082 emissions generated [15]. In industry, the implementation of circular economy strategies in procurement is becoming increasingly relevant, especially in highly interconnected sectors such as the automotive industry [17]. Fusing digitalization and circular economy creates new opportunities for the transparent and efficient design of material flows.<\/p>\n\n\n\n

Introduction of the interview partners and applied research methodology<\/h2>\n\n\n\n

In the course of this study, eight experts from five leading global companies in German industry were selected to conduct expert interviews. The selection of the companies was based on their position in the global automotive and aviation industries, the diversity of their supply chains and their active participation in innovation projects in the field of digital networking and circular economy. The following companies were interviewed as part of this study:<\/p>\n\n\n\n