Towards sustainable manufacturing: A comprehensive analysis of circular economy key performance indicators in the manufacturing industry

In the pursuit of sustainable development, the concept of Circular Economy (CE) has emerged as a transformative alternative to the traditional linear economic model characterized by take, make, use, and dispose practices. However, there is a growing recognition of the limitations of the linear economy in addressing contemporary global challenges, leading to a pressing need for a more regenerative approach. This study aims to explore and analyze Key Performance Indicators (KPIs) associated with the circular economy, particularly focusing on the manufacturing industry, to provide a valuable guide for enterprises looking to integrate CE principles effectively and reinforce sustainability. The novelty of this study lies in its comprehensive examination of KPIs that embrace sustainability's triple bottom lines - environmental, economic, and social dimensions. The systematic selection of relevant KPIs and the utilization of Social Network Analysis (SNA) to identify the most influential CE KPIs within the manufacturing industry add depth to the research. By identifying and upgrading significant KPIs representing various facets of CE development, this study contributes to a more meticulous understanding of how enterprises can measure their progress towards circularity. In each of the triple bottom lines of sustainability, five significant KPIs were recognized and upgraded to the second assessment process, where these 15 KPIs are analyzed using SNA to obtain 5 aggregated KPIs. The comprehensive analysis of the obtained fifteen KPIs culminates in aggregated CE indicators, primarily strategies and initiatives (SI), material efficiency (ME), productivity of remanufacturing (OR), technology investment (ROR), and eco-innovation (EI). The aggregated Key Performance Indicators (KPIs) displayed an extreme value of the weighted average index attributed to strategies and initiatives KPI with a value of 0.067. These aggregated KPIs provide a practical framework for manufacturers to assess and optimize their circular economy practices. It's essential to note that all binary values incorporated in the proposed approach are derived from an extensive literature review. These values may vary depending on the specific objectives of individual manufacturing firms or focus groups. As a result, the proposed approach is adaptable to diverse manufacturing industries, allowing customization to suit the unique input criteria of each firm or group. Significantly, the current work emphasizes the influential role of manufacturers in shaping a sustainable future in alignment with development goals.