Integrated Impact of Circular Economy, Industry 4.0, and Lean Manufacturing on Sustainability Performance of Manufacturing Firms

Abstract

In today’s business environment, contributions made by the manufacturing sector to the economy and social development is evident. With a focus on long-term development, the manufacturing sector has adopted advanced operating strategies, such as lean manufacturing, industry 4.0, and green practices in an integrated manner. The integrated impact of circular economy, industry 4.0, and lean manufacturing on sustainability performance has not been adequately addressed and investigated. Therefore, the aim of this study is to investigate the integrated impact of circular economy, industry 4.0, and lean manufacturing on the sustainability performance of organizations in Saudi Arabia. Data were collected through a questionnaire-based survey as a primary data instrument. A total of 486 organizations have responded to the survey within the timeframe. Moreover, the structural equation modeling method is utilized for data analysis through SmartPLS tool for the developed hypotheses of the research. The findings highlight the positive impact of circular economy on the sustainability of the organizations. Furthermore, the results indicate that industry 4.0 and lean manufacturing have positive mediating impacts as enablers for the successful implementation of circular economy toward the sustainable performance of organizations in Saudi Arabia. The study finding confirms that lean manufacturing is a substantial mediating variable that is essential for the successful implementation of industry 4.0 technologies. Moreover, the study indicates the recognition and acknowledgment of companies on circular economy principles, industry 4.0 technologies, and lean manufacturing tools to achieve the desired sustainability.