Data-Driven Management of Material Flows in Circular Economy by Logistics Optimization

Abstract

The aim of the Circular economy (CE) business models is to reuse materials and decrease the need for virgin materials in the value chains. This, in turn, requires close collaboration and information sharing between the value chain stakeholders. For this, digitalization and data play a crucial role. This paper studies how small and medium sized enterprises (SMEs) operating in CE can utilize digitalization and data in managing and optimizing the material flows that are central to their production processes. The paper focuses on four case companies, all operating in CE business in Finland, and analyses how these companies have been able to enhance their material flow management by means of data-driven logistics optimization in a research-based university-industry collaboration. The solutions range from conceptual solutions to mathematical optimization and a tool supported solution concept.