Circular Strategies Enabled by the Internet of Things—A Framework and Analysis of Current Practice

Abstract

This paper focuses on how the Internet of Things (IoT) could contribute to the transition to a circular economy (CE), through supporting circular business model and design strategies. While literature has highlighted the opportunities for IoT to support circular strategies in business, little has been published about actual implementations in practice. The aim of this study was therefore to understand how companies to date have implemented IoT for circular strategies, and how these implementations compare to the range of opportunities described in literature. To that end, a two-step approach was followed. Firstly, building on academic literature, a framework was developed which categorizes different IoT-enabled circular strategies. The framework recognizes tracking, monitoring, control, optimization, and design evolution as IoT capabilities. Efficiency in use, increased utilization, and product lifetime extension are distinguished as circular in-use strategies, while reuse, remanufacturing, and recycling are distinguished as circular looping strategies. The framework complements previously published work, as it adds additional detail to the categorization, and allows for easy mapping of diverse cases. Secondly, 40 cases from practice were analyzed and mapped to the framework. This way, practice-based insights were derived about the current distribution of IoT-enabled circular strategies implemented in practice. The results show that current implementation of IoT-enabled circular strategies mainly supports two strategies in the use phase: efficiency in use and product lifetime extension. Only a small number of the reviewed cases display IoT-enabled looping (reuse, remanufacturing, and recycling). Similarly, few cases describe ‘design evolution’ for CE, i.e., the feedback of data from products in use to support circular design. Based on these results, this study identifies the need for future research to further investigate why IoT-enabled looping strategies and design evolution for circular strategies have not been implemented to scale.