Towards circular economy: A IoT enabled framework for circular supply chain integration

Abstract

Nowadays, the Internet of Things (IoT) has evolved beyond mere buzzword status, emerging as a pivotal force that can confer a competitive advantage in the market. By facilitating seamless communication between objects and the internet, IoT catalyzes unprecedented connectivity between machines and objects. An inherent advantage lies in its capacity to facilitate real-time information sharing, enabling efficient management of vital aspects within the realm of supply chain management, including inventory, products, and orders. Therefore, this study investigates the impact of IoT on supply chain performance, with a specific focus on the mediating role of interconnected systems in the dynamics of supply and demand, and the performance of supply chain firms within a sustainable circular economy context. A survey involving 268 manufacturers forms the basis of quantitative data analysis. Partial Least Square Structural Equation Modelling (PLS-SEM) was employed to test the relationships between latent and construct factors. The results highlight the significant influence of IoT capabilities on both supply chain performance and the integration of internet-enabled supply and demand processes. Concurrently, the study reveals a reciprocal positive effect, as supply and demand integration within internet-enabled supply chains contributes to enhanced supply chain performance. Moreover, the integration of internet-enabled supply and demand processes emerges as a crucial mediator, amplifying the relationship between IoT capabilities and supply chain performance. This study provides valuable insights for managers, researchers, and policymakers, fostering a deeper understanding of the vital role that IoT plays in cultivating and enhancing superior supply chain management practices and overall performance. The study highlights the significant benefits of IoT in enhancing supply chain performance through improved real-time tracking, inventory management, and resource optimization. It also emphasizes the crucial role of integrating internet-enabled supply and demand processes as a mediator, boosting overall supply chain efficiency and responsiveness.