Making circularity work: integrating circular economy and Industry 4.0 for resource efficiency and Scope 3 governance in food manufacturing

Abstract

Purpose Food manufacturing faces growing pressure to improve resource efficiency and manage Scope 3 emissions, yet how circular economy (CE) strategies and Industry 4.0 (I4.0) technologies are integrated in practice remains poorly understood. This study aims to investigate how CE–I4.0 integration is enacted in food manufacturing and how it supports operational decision-making, adaptive manufacturing and Scope 3 governance. Design/methodology/approach The study adopts a qualitative, mechanism-seeking design grounded in dynamic capabilities theory (DCT) and draws on semi-structured interviews with food manufacturing professionals. Findings The findings extend understanding of dynamic capabilities by showing how sensing, seizing and reconfiguring are enacted under governance constraints. CE initiatives gain traction only when framed as operational risks or cost exposures supported by digital evidence, whereas I4.0 functions primarily as a decision infrastructure that enables visibility, prioritisation and risk containment rather than sustainability. Scope 3 governance emerges through digitally enabled “zones of influence,” where traceability data supports selective, defensible intervention rather than comprehensive upstream control, reframing Scope 3 sustainability as a governance challenge centred on data-justified action at value-chain interfaces where influence is operationally real rather than technologically idealised. The study further identifies novel barriers to scaling, including ambiguity in decision ownership, cross-functional evidence misalignment, amplified transitional risk and temporal misalignment between digital learning and governance cycles. Originality/value The study advances CE–I4.0 research by providing integrative, decision-oriented mechanisms explaining how circular and digital initiatives are prioritised, governed and scaled under operational constraints and extends DCT by explaining CE–I4.0 integration as governance-dependent and constraint-shaped, providing insight into why circular initiatives frequently stall at scale despite digital readiness.