The drivers of industry 4.0 in a circular economy: The palm oil industry in Malaysia

Abstract

The demand for palm oil production has been disrupted and volatilized due to uncertain conditions, such as the COVID-19 pandemic. To overcome this problem, Industry 4.0 (I4.0) has been introduced to facilitate the operation and production management process. However, the palm oil industry needs to address sustainability issues. Therefore, the circular economy (CE) is the best solution. By deploying I4.0 in the CE, the palm oil industry, a multimillion-dollar industry, is expected to improve its operations and production and achieve sustainability in the near future. However, to benefit from advanced I4.0 in the CE, it is important to assess the drivers that cause the evolution and dissemination of these technologies. By considering the importance of I4.0 in the CE, this study aims to investigate the drivers of I4.0 in the CE and the nexus between them from an ecological modernization theory perspective. This study uses a combined approach based on the Delphi technique, fuzzy decision-making trials and evaluation laboratory methods to analyse the driving forces of I4.0 in the CE. The results show 17 driving criteria in the cause group and 13 criteria in the effect group. In particular, information for practitioners, cybersecurity, improving real-time, economic attractiveness, laws and policy and energy recovery are the most powerful criteria that can influence the other criteria, especially the criteria in the effect group. Overall, this study contributes theoretical and practical insights, as well as policy implications. The study's findings will help firms clarify the connectivity between the significant drivers of I4.0 in the CE, especially in the palm oil industry, which is valuable in the development of congruent solutions for inducing sustainable development. Finally, this study suggests that a wide range of integration and connectivity effects on I4.0 in the CE allow for an improvement in the overall performance, including operations and production, by adopting a holistic approach.