Modeling barriers of digital manufacturing in a circular economy for enhancing sustainability

Purpose Circular economy denotes future sustainability that allows optimum utilization of resources. In the present era of technology, plenty of innovations are happening across the world, and digital manufacturing is one of such innovations. However, there are several barriers which are impeding adoption of digital manufacturing in circular economy environment. The study explores the barriers of digital manufacturing initiatives in a circular economy and develops a methodological model to prioritize the identified challenges for automotive parts manufacturing industry. Design/methodology/approach Seven categories of challenges namely process, human resources, financial, collaboration, technological, security and leadership challenges were identified from literature and further validated with subsequent discussions with experts from the industry. The study is conducted in two phases, where in the first phase, the Decision-Making Trial and Evaluation Laboratory (DEMATEL) technique is used to define the priority and importance of seven categories of challenges. In second phase, the barriers are ranked using a Fuzzy Performance Important Index (FPII), taking into account contextual factors associated with the challenges and linked barriers, to determine the extent to which they impede the adoption of digital manufacturing in the sample automotive parts manufacturing company. Findings The “risk of data security and information privacy in connection with use of external data and protecting customer data” appeared as the most significant barrier to digital manufacturing in circular economy. Furthermore, technological challenges emerged as the most significant category of challenges followed by financial challenges in adoption of digital manufacturing in circular economy. Practical implications Identification of the identified barriers and understanding the interrelationships will lead to easier adoption of digital manufacturing in circular economy. Originality/value Despite all the potential benefits of implementing Industry 4.0 technologies in manufacturing industries, the adoption thereof is still in nascent phase with significant challenges yet to be overcome to accelerate the pace of adoption. Hence, this study explores the barriers preventing companies from adopting and benefiting from digital manufacturing initiatives and further develops a methodological model.