Operationalizing Industry 4.0: Understanding Barriers of Industry 4.0 and Circular Economy

Abstract

The manufacturing industry has to withstand an increasing competition requiring customization of products, shorter time to market and a transition towards more sustainable operations and products. There is a need for a transition to business models that incorporate sustainability while keeping business activities profitable. Leveraging the advantages of new technologies within the concept of Industry 4.0 is seen as an important factor to maintain competitiveness while responding to the sustainability challenge. Changing the way businesses operate is not easy as is evident from studies that have identified many barriers, including costs, lack of competence, loss of jobs, and process, product or production facilities not suitable for Industry 4.0. Due to these barriers, firms are slow to make a transition towards customized products, shorter lead times and more sustainable operations and products. The commitment for sustainability includes a shift towards Circular Economy (CE) that poses additional barriers like geographic dispersion, product complexity, and lock-in to the contemporary linear ‘take-make-consume-dispose’ model of operation. This paper addresses how manufacturers perceive Industry 4.0, what motivates their investments in Industry 4.0, and what barriers they see in adapting Industry 4.0 followed by a literature review identifying barriers for adhering to CE in the manufacturing industry sector. The study offers empirical insights identifying a need for a roadmap for implementation of Industry 4.0 to support CE as well as providing directions for future research.