The performance impact of Industry 4.0 technologies on closed-loop supply chains: insights from an Italy based survey

Abstract

Closed-Loop Supply Chain (CLSC) and Industry 4.0 (I4.0) are two significant initiatives that have engaged European and global business over the past few years. While direct effects of these initiatives on performance have been found, the nature and performance effects of interactions among these two initiatives remain largely unexamined. This exploratory study theorises and investigates how I4.0 technologies can facilitate CLSC initiatives. Data are collected and analysed from enterprises located in the northeast of Italy. Partial least squares structural equation modelling (PLS-SEM) is deployed to analyse the data. The data suggest a significant and beneficial moderator of I4.0 technologies on the relationship between CLSC practices and firm environmental and social performance. The data fails to find a significant relationship between CLSC practices and financial performance. Data-driven I4.0 technologies are seen to be of greater significance in such moderator roles, comparative to process-driven I4.0 technologies. Our analysis suggests that companies may be advised to adopt a targeted, systems approach for using data-driven I4.0 applications in conjunction with CLSC practices in order to realise performance gains. The findings represent important building blocks in developing theory in this formative area of study. Further implications are discussed from theoretical and practical perspectives.

Abbreviations: CE: Circular Economy; CLSC: Closed-Loop Supply Chain; CLSC_ADO: Closed-Loop Supply Chain activities adoption; I4.0: Industry 4.0; I4.0_ADO: Industry 4.0 technologies adoption; PERF: Company Performance; PLS-SEM: Partial least squares structural equation modelling; TBL: Triple Bottom Line (Financial, Environmental, Social)

KEYWORDS:

• Industry 4.0
• digitalization
• closed-loop supply chain
• circular economy
• survey

Acknowledgements

The authors sincerely thank the European Project POR 2014–2020 – ‘Closed Loop Supply Chain’ – code: 1001-1-1267-201 and Fondazione Speedhub office for providing funding and valuable support for this research. We thank the reviewers for several productive and useful suggestions that have improved the paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available on request from the corresponding author, RA. The data are not publicly available to assure the privacy of research participants.

Notes

1 The coloured lines in Figure 1 are to help visually distinguish among the different flows and do not represent any kind of colour coding schema.

2 We also tested for the direct effects of CLSC on the three dimensions of company performance – economic, environmental, and social, respectively – and found significant and similar sized effects.

3 We did not find any sig moderator effects of Ind 4.0 using the three dimensions of company performance – economic, environmental, and social. A possible explanation could be that treating Ind 4.0 as a composite construct subsumes its potential moderator roles. H2a hypothesizes and examines the individual moderator roles of data driven and process driven Ind 4.0 on the relationship between CLSC and performance.

4 Path models not shown in the interest of brevity – but are available on request.

5 Details not shown here in the interest of brevity

Additional information

Funding

This work was supported by European Project POR 2014-2020 – “Closed Loop Supply Chain” [grant number 1001-1-1267-2017].

Notes on contributors

Riccardo Aldrighetti

Riccardo Aldrighetti holds a PhD in Supply Chain Management obtained at the University of Padova (Italy) in the Doctoral School of Mechatronics and Product Innovation Engineering where he also earned a BSc and MSc in Management and Engineering. His research interests explore supply chain simulation and structure dynamics, with a particular emphasis on supply chain resilience and global supply network design with disruption consideration.

Daria Battini

Daria Battini is a full professor of Industrial Facilities Design and Industrial Logistics at the University of Padua (Italy). She is the Coordinator of the Doctoral Course in Mechatronics and Product Innovation Engineering. Pr. Daria Battini investigates supply chain design and management, industrial system optimisation, and manufacturing system management for sustainability. She has been guest editor of several special issues in relevant international journals and she is a member of IFAC and Euroma.

Ajay Das

Ajay Das is a Professor in the Operations Management group at Baruch College, NYC, NY. His research currently engages innovation, technology, risk, and quality in operations and supply chains. Ajay has published extensively in journals such as the Journal of Operations Management, Decision Sciences Journal, IJPR, IJOPM, IJPE, and other scholarly research outlets. He is the current Editor-in-Chief of IJISM, a niche journal for supply chain integration research.

Marco Simonetto

Marco Simonetto is a PhD candidate at the Department of Mechanical and Industrial Engineering (MTP) at NTNU (Norway). He has a master’s degree in Management Engineering from University of Padova (Italy). His research interests include assembly systems, Industry 4.0, and material feeding