Integrating Industry 4.0 with Circular Economy Approach for Sustainable and Flexible Manufacturing Systems

In recent years, integrating Industry 4.0 (I4.0) and circular economy (CE) principles has gained significant attention for promoting sustainable and flexible manufacturing systems. However, there is limited research on (i) identifying and prioritizing the critical success factors (CSFs) that drive this integration and foster sustainable transformation in manufacturing and (ii) exploring the interdependencies between these two approaches, specifically in achieving sustainability and flexibility in manufacturing. This study addresses these gaps by identifying key CSFs necessary to integrate I4.0 and CE successfully. The Delphi technique was used to identify 22 CSFs from the literature and grey influence analysis (GIA) was employed to understand the influence dynamics among these factors. The CSFs considered include the implementation of data collection via sensors and Internet of Things (IoT) devices, comprehensive evaluations of environmental impacts across the entire product life cycle, strategies to protect biodiversity, training of personnel to facilitate technological adaptation, and data-driven analysis for insights into resource utilization and waste reduction. Furthermore, the hierarchies and complex causal relationships among these variables were illuminated through the Decision-Making Trial and Evaluation Laboratory (DEMATEL) approach. This study aims to introducing sustainability and flexibility within manufacturing practices and contributes by enabling decision-makers to set investment priorities across different processes in alignment with the ongoing environmental and technological revolution. © The Author(s) under exclusive licence to Global Institute of Flexible Systems Management 2025.