Towards circular economy implementation in manufacturing systems using a multi-method simulation approach to link design and business strategy

  • Michael Lieder
  • Farazee M. A. Asif
  • Amir Rashid
  • Aleš Mihelič
  • Simon Kotnik
Open Access


The recent circular economy movement has raised awareness and interest about untapped environmental and economic potential in the manufacturing industry. One of the crucial aspects in the implementation of circular or closed-loop manufacturing approach is the design of circular products. While it is obvious that three post-use strategies, i.e., reuse, remanufacturing, and recycling, are highly relevant to achieve loop closure, it is enormously challenging to choose “the right” strategy (if at all) during the early design stage and especially at the single component level. One reason is that economic and environmental impacts of adapting these strategies are not explicit as they vary depending on the chosen business model and associated supply chains. In this scenario, decision support is essential to motivate adaptation of regenerative design strategies. The main purpose of this paper is to provide reliable decision support at the intersection of multiple lifecycle design and business models in the circular economy context to identify effects on cost and CO2 emissions. The development of this work consists of a systematic method to quantify design effort for different circular design options through a multi-method simulation approach. The simulation model combines an agent-based product architecture and a discrete event closed-loop supply chain model. Feasibility of the model is tested using a case of a washing machine provided by Gorenje d.d. Firstly, design efforts for reuse, remanufacturing, and recycling are quantified. Secondly, cost and emissions of different design options are explored with different business model configurations. Finally, an optimization experiment is run to identify the most cost-effective combination of reused, remanufactured, and recycled components for a business model chosen on the basis of the explorative study results.


End-of-life design strategy Closed-loop manufacturing system Circular economy Business model Supply chain Multi-method simulation 

Supplementary material

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Appendix (PDF 517 kb)


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© The Author(s) 2017

Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (, which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.

Authors and Affiliations

  • Michael Lieder
    • 1
  • Farazee M. A. Asif
    • 1
  • Amir Rashid
    • 1
  • Aleš Mihelič
    • 2
  • Simon Kotnik
    • 3
  1. 1.Department of Production EngineeringKTH Royal Institute of TechnologyStockholmSweden
  2. 2.R&D Competence Centre Laundry CareGorenje d.d.VelenjeSlovenia
  3. 3.Joint R&D CentreGorenje d.d.VelenjeSlovenia

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