A Novel Grey Causal Modelling (GCM) Approach to Enhance Resource Efficiency and Minimizing Waste in the Manufacturing Supply Chain Through Circular Economy

Abstract

The manufacturing supply chain is under increasing pressure to enhance resource efficiency and minimize waste, driven by rising environmental concerns and resource scarcity. Despite various sustainability initiatives, a significant research gap exists in understanding the interdependencies of Circular Economy (CE) factors that influence both resource efficiency and waste reduction. To address this gap, the present study aims to explore the key CE factors that can simultaneously improve resource efficiency and minimize waste, using the novel Grey Causal Modelling (GCM) approach. The study focuses on critical CE factors, including Material Substitution, Product Lifecycle Extension, Digital Technologies for CE, Water Efficiency and Recycling, Stakeholder Collaboration, Design for Disassembly and Closed‐Loop Supply Chains. The GCM methodology is applied to model the causal relationships among these factors, providing a comprehensive analysis of their interactions and overall impact. The findings highlight that Material Substitution is the most effective factor in reducing environmental impact, while Product Lifecycle Extension and Digital Technologies are crucial for optimizing real‐time resource usage and waste minimization. Additionally, Stakeholder Collaboration and Design for Disassembly play pivotal roles in fostering circularity and operational efficiency. This research offers valuable implications for industry leaders and policymakers by providing a structured framework to achieve enhanced resource efficiency and waste reduction in manufacturing. The study contributes both to the theoretical understanding of CE in the manufacturing sector and to the development of practical strategies for achieving sustainability goals.