Industry 4.0 Information Systems for Materials Circularity in Supply

Chains: Industry Issues and Research Directions

Soujanya Mantravadi

and Brian Vejrum Wæhrens

Department of Engineering, University of Cambridge, 17 Charles Babbage Road, Cambridge, U.K.

Department of Materials & Production, Aalborg University, Fibigestræde 16, Aalborg, Denmark

Keywords: Industry 4.0, Manufacturing Sustainability, Circular Economy, Manufacturing Operations Management

(MOM), Supply Chain Integration, Industry Policy, Traceability, Net-Zero, Knowledge Management.

Abstract: The purpose of this paper is to explore the role of information systems in manufacturing to support material

circularity practices in the supply chain. The paper attempts to study the usefulness of manufacturing

operations management (MOM) systems, particularly manufacturing execution systems (MES), in enabling

traceability and supply chain integration for tracking product material details. Theoretical propositions made

on MOM systems for materials circularity (based on the literature study) were empirically examined using

needs assessment from two case companies with complex product material requirements. Based on the

qualitative analysis of propositions and empirical findings, the paper identified traceability-enabled methods,

supply chain integration, and the adoption of Industry 4.0 technologies as potential enablers for achieving

materials circularity goals. As a result, the priorities for developing research agenda in this area to design

factories of the future and to achieve Industry 4.0 vision that supports circular economy were established.

Future research directions are put forward and future work will include an in-depth case study analysis to

explore the role of Industry 4.0-compliant MOM systems to meet evolving regulatory demands and

operational scalability across the supply chain.

1 INTRODUCTION

Materials Circularity in Manufacturing: One of

the biggest challenges manufacturing companies

worldwide currently face is adapting to evolving

sustainability compliance requirements while

tailoring their manufacturing operations and

equipment. For example, a global electronics

manufacturer may need to comply with stricter

regulations on carbon emissions and waste

management while simultaneously implementing

advanced automation and Industry 4.0 technologies.

This could involve retrofitting production lines with

energy-efficient equipment and materials recycling in

the factory.

The concept of material circularity covers a

much broader scope with implications for supply

chains, necessitating changes across all aspects of the

supply chain. It requires the adoption of modern

equipment, particularly advanced enterprise

https://orcid.org/0000-0001-9382-8314

https://orcid.org/0000-0001-6140-5587

information systems, to achieve sustainability goals.

However, this transition remains a work in progress

within the manufacturing industry and demands

research attention to address existing knowledge gaps

and industrial challenges.

The circular economy (CE), as highlighted by the

European Commission (EU) (European Union,

2015), calls for a lifecycle approach. However, its

core principle in practice focuses on increasing

material circularity by converting materials at the end

of their service life into resources for new

applications (European Union, 2015).

Materials circularity in manufacturing refers to

the concept of creating a closed-loop system for

materials, where resources are used efficiently, waste

is minimized, and materials are continually recycled

and reused in the production process. This approach

aims to reduce the environmental impact of

manufacturing activities by promoting sustainability

Mantravadi, S. and Wæhrens, B. V.

Industry 4.0 Information Systems for Materials Circularity in Supply Chains: Industry Issues and Research Directions.

DOI: 10.5220/0013482900003929

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 27th International Conference on Enterprise Information Systems (ICEIS 2025) - Volume 2, pages 925-931

ISBN: 978-989-758-749-8; ISSN: 2184-4992

925

and minimizing the depletion of natural resources

(Dumée, 2022).

Many manufacturing companies globally are

adjusting their manufacturing systems and practices

to meet future regulations of circular economy. Some

of the practices of materials circularity in

manufacturing include: Recycling and Reuse, Waste

reduction, Design for sustainability,

Remanufacturing, and Materials traceability.

EU and International Policies Associated With

Materials Circularity: several EU and international

policies are associated with the concept of circular

economy, which include materials circularity. Some

of these are https://commission.europa.eu/index_en:

• Circular Economy Action Plan (CEAP): The

CEAP is an EU initiative that presents

strategies and actions to promote a circular

economy. It covers product design, waste

management, recycling targets, and measures

to reduce the environmental impact of

products.

• Waste Framework Directive: It establishes the

legislative framework for waste management

in the EU. It sets out key principles, including

waste hierarchy, extended producer

responsibility, and recycling targets.

• Directive on single-use plastics: This directive

aims to reduce the impact of certain plastic

products on the environment, including bans

or restrictions on single-use plastic items and

promotion of circular design.

• Ecodesign Directive: This sets requirements

for the environmental performance of energy-

related products, promoting circularity by

encouraging longer product lifetimes, easier

repairability, and recyclability.

• Plastics Strategy: The EU Plastics Strategy

focuses on improving the economics and

quality of plastics recycling, reducing single-

use plastics, and promoting eco-friendly

alternatives.

Several international policies support the circular

economy with implications for manufacturing. The

United Nations (UN) Sustainable Development

Goals, particularly Responsible Consumption and

Production, emphasize sustainable practices. The

Basel Convention regulates hazardous waste

movements and management, while the Paris

Agreement indirectly promotes circular principles

through resource efficiency. The UN Environment

Programme advances initiatives on sustainable

consumption, and the OECD provides guidelines for

circular economy strategies for member countries.

Regulations and recommendations from various

governing bodies make it evident that stricter rules for

manufacturing are on the horizon, and manufacturers

must quickly adapt to these growing challenges.

However, many brownfield manufacturing

enterprises continue to rely on traditional

manufacturing methods and legacy equipment, which

hinder their ability to meet these evolving

requirements.

While many studies highlight the importance of

information systems in manufacturing supply chains

to achieve circular economy goals (Awan et al., 2021)

(Chhimwal et al., 2022), the roadmap for their

implementation remains unclear. Exisiting literature

highlights Industry 4.0 as an enabler of circular

supply chains (Gebhardt et al., 2022; Taddei et al.,

2022). (Zeiss et al., 2021) mention that product design

for reuse addresses repairability and upgradeability,

where digital processes and flexible platforms enable

design, analysis, and collaboration by facilitating

disassembly and reuse. They highlight Industry 4.0

technologies, such as the Internet of Things, Big Data

Analytics, and cloud computing, as beneficial for

circular supply chains.

Traditionally, enterprise information systems in

manufacturing were designed to enhance operational

efficiency, leaving their potential role in supporting

circular economy objectives underexplored. There

are limited studies in this area in manufacturing. This

demands further inquiry into the future operational

needs of factories and supply chains to use

information systems accordingly.

Motivated by this need, this paper examines how

manufacturing companies are adapting to these

regulations and identifies which factory information

systems have the potential to address these challenges

in supply chains—a question that has not been widely

studied in the existing literature.

Section 2 introduces the theoretical framing to the

research, Section 3 describes the approach, followed

by an analysis of company case study narratives in

Section 4. Section 5 concludes the position and

presents the future work.

2 MANUFACTURING

INFORMATION SYSTEMS FOR

MATERIALS CIRCULARITY

Enterprise information systems in manufacturing,

such as enterprise resource planning (ERP) and

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926

MES/MOM play a crucial role in promoting materials

circularity within the context of a circular economy.

These systems help manage and optimize the flow of

materials through various stages, from production to

consumption and recycling.

In Industry 4.0, these systems leverage

technologies such as Internet of Things (IoT) sensors

visibility and traceability of materials, which are

essential for supporting recycling, reuse, and

remanufacturing processes. ERP systems can

integrate data from various functions and are capable

of monitoring material usage. MES/MOM can

provide almost real-time product centric data for

decision-making on material recovery, reuse and

remanufacturing processes. Product Lifecycle

Management (PLM) systems can document the

environmental impact of materials and products,

helping manufacturers design for circularity.

A proven example of traceability is of RFID tags

in the automotive industry to track the recycling of

vehicle parts. By using such tracking capabilities,

companies can ensure that materials such as metals,

plastics, and composites are recovered and reused

rather than discarded.

Requirements of future factories: Given the

regulations outlined in Section 1, numerous

accountability and reporting issues arise. With the

changing regulations, manufacturers need to rethink

their computer-based information systems and use

advanced manufacturing operation management

systems to address these issues. A study (Omair et al.,

2024) suggested that manufacturing information

systems for materials circularity, in the context of

recycled plastic (RP), face challenges due to the high

variability in quality, composition, properties, and

lead time of RP. These variations create uncertainty

in material requirement planning, making it difficult

to optimize quantities and reorder times (Omair et al.,

2024).

Future factories will also require advanced

Internet of Things (IoT) capabilities to optimize

operations through real-time monitoring, tracking,

and control, enabling efficient use, extended product

lifecycles, and increased resource utilization for

circular economy (Uhrenholt et al., 2023). This is in

line with the Industry 4.0 vision of data-driven

decision-making, supported by predictive and

prescriptive analytics. MES/MOM, being a factory

database and a manufacturing cockpit is well

positioned to integrate with Industrial IoT to support

the transition towards material circularity in

manufacturing supply chains.

Figure 1 presents the MES/MOM position in the

manufacturing information systems.

Figure 1: ISA 95 Levels of functional hierarchy in a

manufacturing enterprise. (Scholten, 2007)

3 METHODOLOGY

We used a combination of selective literature review

and case study approach to explore the role of MOM

systems in enabling materials circularity practices.

This methodology combines theoretical development

with empirical exploration to identify key research

gaps. First, we explored theoretical background based

on selective literature review on the topics

‘manufacturing information systems’, ‘materials

circularity’, ‘circular supply chains’ and

‘manufacturing operations management’. We

prioritized recent studies from 2018-2025. The

review results highlighted a gap in literature on

integration of MOM systems with Industry 4.0

technologies to enhance traceability for materials

circularity. These literature findings were supported

by the subsequent empirical analysis.

To explore this gap, we used an in-depth

exploratory case study approach, drawing on

established methodologies by Voss (2002) (Voss,

2010) and (Yin, 2014). The study focused on two

large global manufacturing companies, anonymized

as Company A and Company B for confidentiality.

Both companies operate at scale with complex

material requirements in their production processes.

The case study methodology followed the six-stage

framework proposed by (Flynn et al., 1990). Data

collection included field visits involving direct

observations and discussions with manufacturing

personnel, supply chain managers, and sustainability

officers. We also reviewed publicly available

company reports, operational manuals, and

regulatory compliance records. To contextualize and

Industry 4.0 Information Systems for Materials Circularity in Supply Chains: Industry Issues and Research Directions

927

triangulate the data, we integrated insights from the

existing literature.

To ensure validity, we applied a theoretical

replication strategy, using Company B to confirm

findings and explore variations in materials

circularity needs under different operational contexts.

Reliability was maintained through data

triangulation, combining insights from literature,

field visits, and archival documentation. Preliminary

case study analysis contributed to the development of

hypotheses regarding the role of MOM systems in

achieving materials circularity goals.

This approach helped us in presenting the case

study findings in Section 4.

4 ANALYSIS AND FINDINGS

In this section, we present two exemplar case study

narratives of companies on their material circularity

journeys. These international companies have a large

manufacturing footprint and are industry leaders in

their respective sectors, known for their iconic

products.

Case 1 – High end Plastic Consumer Goods: A

global leader in plastic consumer goods

manufacturing, this company boasts an iconic product

and nearly a century of industry presence. With a

widespread manufacturing network spanning five

sites across three continents, it has adaptable supply

chains and an e-commerce platform to cater to the

global demand for personalized products. Company

A offers over 3,000 distinct shapes of components in

a wide range of configurations which are durable for

a long functional lifetime and often passed on into

secondary market. In terms of reuse/recycling this

also means that many generations of material

composition can be found in active market use, some

of which also contain substances that do not live up

to current requirements. This introduces a challenge

in terms of sorting products when they return through

take back programs so that unwanted substances are

not mixed into the material pool.

Company A has for 20 years been actively

engaged in changing the composition of its materials

platform and is under increasing internal and external

pressure to adopt sustainable practices, particularly in

terms of reducing plastic waste and improving

product recyclability.

In the 2010s, Company A integrated a new

comprehensive PLM system into its enterprise

platform to accelerate product launches and enhance

master data management across its supply chain. This

integration has driven increased automation in

product launches, production planning, control, and

lifecycle management, resulting in a notable

improvement in product output through more

granular control over materials, production processes,

and product flows. The upgraded data systems have

provided deeper insights into costs and

manufacturing structures, facilitating more informed

decision-making. A recent initiative focuses on

experimenting with dynamic recipes to align material

composition, process parameters, and advanced

customer requirements. Initially aimed at boosting

process control and optimization, this program, as it

evolves, will enable more significant changes in

material composition, processes, and customization.

These changes, whether process optimizations or new

elements, often require extensive testing and

validation, but digital twins within the industrial

metaverse now serve as a central hub to integrate

operational systems into a unified virtual

environment. For example, recipe adjustments can be

simulated and automatically updated across

connected systems.

Case 2 – Pharmaceuticals and Health Care

(Packaging): Company B is a global leader in the

pharmaceutical industry, known for its commitment

to fighting chronic diseases by advancing innovative

medicines and delivery systems. It is a well-

established company operating a vast network of

manufacturing sites across multiple continents.

Company B is also known for its pioneering work in

medicine delivery systems, where it has a self-

reported plastic footprint of 0.35kg per patient despite

concerted efforts to reduce consumption by, among

other things, introducing reusable delivery systems.

Company B faces the challenge of recycling its

plastic medical devices while adhering to stringent

health and safety regulations, which means that

closed loop solutions are not possible under current

circumstances, complicating efforts to improve

product recyclability and reduce plastic waste.

Compared to Company A, ensuring the right

functional properties of the material is not sufficient

for Company B as the documentation trail also need

to comply with regulatory regimes in the market.

Recycled materials often exhibit inconsistent

properties, such as variability in composition,

contamination risks, and reduced mechanical

integrity, which can compromise product safety and

sterility. Regulatory frameworks, including Food and

Drug Administration (FDA) and EU guidelines,

require traceability and compliance, complicating the

use of recycled plastics. Additionally, the

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compatibility of recycled plastics with sensitive

pharmaceutical products, such as drugs and medical

devices, remains uncertain. Ensuring uniformity,

maintaining compliance, and addressing consumer

safety concerns demand advanced sorting, cleaning,

and testing technologies, which increase costs and

complicate adoption. The company has implemented

a take-back program for packaging and dispensing

devices, connecting it to a recycling network for high-

value repurposing. While legislation and regulations

currently prevent the company from reusing materials

internally, it is progressing towards closed-loop

recycling, supported by material verification and

detailed process tracking to meet regulatory

requirements for materials not directly in contact with

active ingredients.

We analyze the empirical data from the two

companies and triangulate it with archival documents

and industry reports. This data is used to identify

specific requirements and challenges, which are

summarized in Table 1.

Table 1: Summary of collected qualitative data.

Source Primary data

from Company

Primary data

from Company B

(to ensure

reliability)

Size

(employees)

>10,000 >10,000

Industry High end plastic

consumer

oods

Pharmaceuticals

Field stud

Denmar

Finding 1

Context

Dynamic recipes

(mixability,

additives,

compounding)

Complying with

industry

standards and

regulation (e.g.,

FDA)

Finding 2

Aim

Recycled content

in core product,

increased

customization,

and process

control for

optimization

Recycled content

in primary and

secondary

packaging

Finding 3

Problem

Meeting high

level functional

demands of

products

Documentation

trail to meeting

high standards

and demand from

ulator

bodies

Both companies face significant challenges in

adapting to changing regulatory requirements. This

highlights the need for advanced information systems

in supporting circularity via data visibility. We argue

that MES/MOM has the potential to address these

issues through dynamic recipes. Dynamic recipes

refer to production instructions or formulations that

adjust based on variables such as material quality,

equipment conditions, or batch requirements.

MES/MOM can handle this by dynamically updating

work instructions, equipment settings, and quality

checks during production.

MES/MOM Functionalities Supporting Circular

Economy:

• MES/MOM supports dynamic recipes

through ongoing alignment of material

characteristics, machine settings, and market

demands. MES/MOM manages and

executes production orders on the shop

floor, often interfacing with real-time data

from equipment and sensors.

• It supports the real-time alignment of actual

circumstances in production and the material

usage by recording the production data in

real-time.

• It enables material documentation and

maintains verified material histories by

documenting material properties and

minimizing the need for additional material

testing.

• It ensures traceability and compliance by

recording recipe changes and their impact on

the final product.

In Figure 2, we present the functionality diagram of

MES/MOM and highlight the functionalities that

could address the materials circularity issues in

manufacturing supply chains through its integration

with other enterprise systems and information

visibility.

Figure 2: 11 functionalities of MES/MOM according to

(MESA INTERNATIONAL – WHITE PAPER NUMBER

2, 1997)

Industry 4.0 Information Systems for Materials Circularity in Supply Chains: Industry Issues and Research Directions

929

5 CONCLUSIONS & FUTURE

RESEARCH DIRECTIONS

Our study explored how manufacturing operations

management (MOM) systems could enhance

traceability across the supply chain to support

materials circularity practices in manufacturing. By

analyzing the aims and processes of our case

companies, we identified the relevance of MOM

functionalities, such as dynamic recipes, which

allow production processes to adapt to varying inputs

or conditions. While traditionally utilized in the

process industry, dynamic recipes highlight the

potential of MOM systems to support materials

circularity across diverse manufacturing sectors.

Furthermore, the integration capabilities of MOM

systems with other enterprise systems, such as

enterprise resource planning (ERP) and product

lifecycle management (PLM), provide opportunities

to align production practices with material circularity

principles.

The key contributions of this paper include:

• We provided a perspective on conducting

high-impact research for complex

manufacturing supply chains to meet

evolving regulatory demands. MOM

systems were shown to effectively track

material flows, enabling manufacturing

personnel to monitor product lifecycle

details and improve recycling and reuse

rates. Recognizing the socio-technical and

organizational aspects of information

systems, we advocate for future research to

explore MES/MOM usability and their

benefits in supporting circular economy

principles.

• Potential in MES/MOM: We highlight the

need for Industrial IoT-based traceability.

Future research on this topic should focus on

the integration of IIoT-enabled traceability

within MOM systems to better align with

regulatory requirements and sustainability

targets, particularly in international

manufacturing networks.

• The study highlights the limited attention in

existing literature regarding MES/MOM

benefit realization for scalable solutions to

achieve material circularity goals. This

paper contributes by emphasizing the need

for further exploration in this area.

• Establishing a research agenda: A concept

was developed to guide future research,

suggesting that the integration of

information systems, especially Industry 4.0

compliant MES/MOM in manufacturing

operations can significantly improve supply

chain visibility and facilitate compliance

with circular economy principles.

As far as we know, this is the first study to

combine the topic of MES/MOM with material

circularity solutions in manufacturing. Most studies

on Industry 4.0 for circular supply chains focus on

IoT and AI but overlook enterprise information

systems like MES/MOM. Future research should

explore how these systems can support business

models such as Product-as-a-Service and take-back

schemes alongside Industry 4.0 adoption. This study

contributes to directives like the EU Green Deal and

the UK’s Net Zero goals.

Our position within the context of Industry 4.0

principles highlights the key capabilities of MOM

systems, such as real-time adjustments, traceability,

and interconnection, as enablers of circular economy

practices. As extended producer responsibility

policies tighten, manufacturers need real-time

material traceability. While MES/MOM can facilitate

this, challenges remain, including integration with

legacy systems, data standardization, cybersecurity

risks, and high AI implementation costs, highlighting

the need for further research on enabling

technologies.

Future work will include in-depth case studies to

explore how leveraging MOM systems for materials

circularity can be most effective when supported by

robust supply chain partnerships and real-time data

sharing. This ongoing research aims to deepen

understanding and provide actionable insights for

designing sustainable manufacturing operations

aligned with Industry 4.0 and circular economy goals.

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