28-08-25

Fit for the Future

A Transition Pathway to Circular Manufacturing Systems

The pressure on manufacturing industries to embrace sustainable practices is growing. Depleting natural resources and increasing climate challenges are pushing us toward a circular economy—where products and materials are reused rather than discarded. Circular manufacturing systems (CMS) are central to this transition, and in our recent research, we explored how companies can move toward this future effectively.

Circular manufacturing isn’t just about recycling materials; it’s about creating value by extending the lifecycle of products, components, and materials. The goal is to close the loop—keeping resources in use for as long as necessary. But for companies, this transformation raises important questions: Where do we start? What changes do we need to make? How can we ensure this shift benefits both the planet and our business?

A Three-Level Approach

We proposed a framework to address the transition to CMS at three critical levels:

Strategic – Helps companies determine if circularity aligns with their long-term goals. Factors like potential investments, market demand, and customer value are weighed to decide which circularity loops (product reuse, remanufacturing, or material recycling) are worth integrating.

Tactical – Focuses on readiness by asking whether companies have the technologies, skills, and capacity needed to implement circular processes. It helps identify gaps in expertise, infrastructure, and technology, creating opportunities for targeted improvements.

Operational – Examines the practicalities of execution, such as the number of workstations and personnel needed. This ensures that processes are aligned for seamless manufacturing and circular workflows.

Key Insights from the Study

In collaborating with a global manufacturing company specialising in high-voltage battery packs, we found that remanufacturing components provided the highest potential for impact. It allowed the company to recover significant value while reducing waste and environmental impact. One key finding was the importance of technology in enabling circular systems. Smart sensors, autonomation/autonomous systems, artificial intelligence, and tools like virtual and augmented reality were identified as game-changers for processes like disassembly and remanufacturing. These innovations not only increase efficiency but also make circular systems more economically viable.

The transition to circular manufacturing is not without its challenges. It requires investment, innovation, and a commitment to rethink traditional practices. But the benefits are profound: reduced resource dependency, stronger resilience to supply chain disruptions, and a positive impact on the environment.

As we look to the future, one thing is clear—circular manufacturing is more than a sustainability buzzword. It is a pathway to long-term success for businesses and a healthier planet for all. Through practical tools and thoughtful planning, we believe companies can make this transition and succeed in a circular economy.

Let’s shape a future where manufacturing is not just productive, but regenerative.

Click here to read the full paper.

dr.ing. Shun
Yang

Shun Yang is assistant professor for the manufacturing systems at UT. Prior to joining UT, he was the executive director of Karlsruhe Institute of Technology (KIT) China Branch, senior research associate at wbk Institute of Production Science of KIT, senior project engineer at Global Advanced Manufacturing Institute (GAMI), and visiting scientist at the department of Mechanical Engineering in Massachusetts Institute of Technology (MIT). He concentrates on the Sino-German collaboration in the field of research, education and innovation. He has variety experience and solid expertise in global production strategy and smart automation as well as sustainable manufacturing through the cooperation with Industry. He is also horned as Sino-European innovation director at wbk of KIT.