Modern Research in Decision Making

Evaluating the Barriers to Adopting Circular Economy and Industry 4.0 in the Home Appliance Industry Using Interpretive Structural Modeling and Structural Equation Modeling

Document Type : Original Article

Author

HamidReza Talaie

Assistant Professor Department of Industrial Management, Faculty of Administrative Sciences and Economics, Arak University, Arak, Iran

Abstract
With the growth of digitalization in industries and the advent of the Fourth Industrial Revolution, organizations have begun transforming their business processes and adopting technologies to become more advanced, customer-centric, and sustainable. Although the introduction of new technologies and the implementation of a circular economy present numerous challenges for organizations, they have proven their value in various industries for achieving sustainability goals. This study aims to identify and prioritize the barriers to the adoption of Industry 4.0 and the circular economy in the home appliance industry. Based on a literature review, ten significant barriers have been identified. For analyzing the collected data, the Interpretive Structural Modeling (ISM) method was used to prioritize the barriers to the adoption of Industry 4.0 and the circular economy, categorizing the factors into five levels of priority. In the structural model, the lack of government support was identified as the most influential and initial barrier, while the lack of motivation and willingness, along with the absence of modular design aspects, were found to be highly susceptible to influence. Furthermore, Structural Equation Modeling was employed to validate the obtained structure. For this purpose, a questionnaire containing 33 questions on a five-point Likert scale was designed, and 170 employees from the domestic home appliance industries were surveyed to complete it. The validity and reliability of the questionnaire were confirmed. The findings of this study can serve as a guiding light for implementing Industry 4.0 and the circular economy in the home appliance industry.

Keywords

Industry 4.0
Circular Economy
Interpretive Structural Modeling
Structural Equation Modeling
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