Abstract Today’s supply chain is becoming complex and fragile. Hence, supply chain managers need to create and unlock the value of the smart supply chain. A smart supply chain requires connectivity, visibility, and agility, and it needs be integrated and intelligent. The digital twin (DT) concept satisfies these requirements. Therefore, we propose creating a DT-driven supply chain (DTSC) as an innovative and integrated solution for the smart supply chain. We provide background information to explain the DT concept and to demonstrate the method for building a DTSC by using the DT concept. We discuss three research opportunities in building a DTSC, including supply chain modeling, real-time supply chain optimization, and data usage in supply chain collaboration. Finally, we highlight a motivating case from JD.COM, China’s largest retailer by revenue, in applying the DTSC platform to address supply chain network reconfiguration challenges during the COVID-19 pandemic. 

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Digital twin-driven smart supply chain

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The digital age we live in offers companies many opportunities to jointly advance sustainability and competitiveness. New digital technologies can, in fact, support the incorporation of circular economy principles into businesses, enabling new business models and facilitating the redesign of products and value chains. Despite this considerable potential, the convergence between the circular economy and these technologies is still underinvestigated. By reviewing the literature, this paper aims to provide a definition and a conceptual framework, which systematize the smart circular economy paradigm as an industrial system that uses digital technologies during the product life-cycle phases to implement circular strategies and practices aimed at value creation. Following this conceptualization, the classical, underlying circular economy principle, ‘waste equals food’, is reshaped into an equation more fitting for the digital age—that is to say, ‘waste + data = resource’. Lastly, this paper provides promising research directions to further develop this field. To advance knowledge on the smart circular economy paradigm, researchers and practitioners are advised to: (i) develop research from exploratory and descriptive to confirmatory and prescriptive purposes, relying on a wide spectrum of research methodologies; (ii) move the focus from single organizations to the entire ecosystem and value chain of stakeholders; (iii) combine different enabling digital technologies to leverage their synergistic potential; and (iv) assess the environmental impact of digital technologies to prevent potential rebound effects.

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Towards the Smart Circular Economy Paradigm: A Definition, Conceptualization, and Research Agenda

Digitalization has the potential to hasten the economic transition towards a more resource-efficient as well as robust circular production system. However, there is a paucity of empirical research on the influence that digitalization has on the ability of a circular economy to function effectively. The objective of this study was to investigate the effect that digitalization has on the performance of the circular economy. The research was based on an empirical analysis of quantitative data obtained from a sample size of 200 investors and entrepreneurs in the financial sector of Kozani, Greece. Regression results showed that there is a positive relationship between digital practices and performance of a circular economy, and that digital business innovations have a positive effect on performance of a circular economy. Even while a sizeable proportion of Greek companies apply new business innovations to support the strategy of resource efficiency, it is abundantly obvious that this percentage is far higher among industrial organizations that place a heavy focus on digitalization. According to the findings of the research, there is a favorable correlation between the adoption of digital business practices and innovations and the success of circular economies. This demonstrates very clearly that digitalization has the potential to function as a driving force behind the development of circular business models.

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The Impact of Digitalization in Supporting the Performance of Circular Economy: A Case Study of Greece

The Circular Economy has been pointed out by scholars and policymakers as a promising approach to decouple economic growth from resource consumption and waste generation [...]

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Circular Economy in the Digital Age

Accurate information plays an important role for the circulation of materials and products. It influences the economically and ecologically successful execution of processes such as reconditioning and the corresponding supply chain management. Digitization concepts, such as digital twins, enable the relevant information to be made available to the right actor at the right time in a decentralized manner. It is assumed that digital twins will play an important role in the future and can contribute, among other things, to the successful implementation of circular economy strategies. However, there is no uniform definition of the term digital twin yet and the exploration and use of digital twins in the context of circular economy products and supply chains is still in its infancy. This article presents potential contributions of digital twins to the circularity of products and the management of circular supply chains. To this end, the derivation and validation of a definition for the term digital twin is described. A stakeholder analysis with a special focus on the processes of the individual stakeholders results in an overview of potentials and information requirements of circular supply chains for a digital twin. The paper concludes that circular supply chains can benefit from digital twins, but that there is still a need for research and development, particularly regarding product and use case-specific implementations of the concept.

Anna Preut

Papers

Digital Twins for the Circular Economy