Measuring circularity of a manufacturing organization by using sustainable balanced scorecard.

Abstract

In recent years, circular economy has become a matter of great importance because of its ability to contribute toward economic, environmental, and social aspects of the sustainability. The circular economy approaches help in resource conservation by reducing, reusing, and recycling products/parts/components/materials. On the other hand, Industry 4.0 is coupled with emerging technologies, which support the firms in efficient resource utilization. These innovative technologies can transform the present manufacturing organizations by reducing resource extraction, CO2 emissions, environmental damage, and power consumption and improve it into a more sustainable manufacturing organization. Industry 4.0 along with circular economy concepts greatly improves the circularity performance. However, there is no framework found for measuring the circularity performance of the firm. Therefore, the current study aims to develop a framework for measuring performance in terms of circularity percentage. In this work, graph theory and matrix approach are employed for measuring the performance based on a sustainable balanced scorecard such as internal process, learning and growth, customer and financial with environmental and social perspectives. A case of an Indian barrel manufacturing organization is discussed for the illustration of proposed methodology. Based on "circularity index" of the organization and the maximum possible circularity index, the circularity was found to be 5.10%. It indicates that there is a huge potential for the improvement in the circularity of the organization. An in-depth sensitivity analysis and comparison are also performed to validate the findings. There are very few studies on measuring the circularity. The study developed the approach for measuring circularity, which may be utilized by industrialists and practitioners for improving the circularity.