A transition towards circular manufacturing systems (CMS) has brought awareness of untapped economic and environmental benefits for the manufacturing industry. Conventional manufacturing systems already present a high level of complexity in terms of physical flows of materials and products as well as information and financial flows linked to them. Closing the loop of materials and products through multiple lifecycles, as proposed in CMS, increases this complexity manifold. To support practitioners in implementing CMS through enhanced decision-making, this research studies CMS from a complex adaptive systems (CAS) perspective and proposes to exploit methods and tools used in the study of CAS to characterise, model and analyse CMS. By viewing CMS as CAS composed of autonomous, interacting agents, this research proposes a multi-method model architecture for modelling and simulating CMS. The different CMS stakeholders are modelled individually as autonomous agents by integrating agent-based, discrete-event, and/or system dynamics modules within each agent to capture their diverse and heterogeneous nature. The applicability of the proposed multi-method approach is illustrated through a case study of a white goods manufacturing company implementing CMS in practice. This case study shows the relevance and feasibility of the proposed multi-method approach as a decision support tool for the systemic exploration and quantification of CMS. It also shows how a transition towards CMS necessitates a lifecycle approach in terms of costs, revenues and environmental impacts to identify hotspots and, therefore, design circular systems that are viable in both economic and environmental terms. In fact, the analyses of the simulation results indicate how decisions in terms of business models, product design, and supply chain affected the CMS performance of the case company. For instance, implementing a service-based model led to a high number of usecycles (on average six usecycles per washing machine), which, in turn, led to high lifecycle costs and emissions due to more frequent transportation and recovery operations. Similarly, the deployment of long-lasting washing machines, which is a core principle of CMS, led to high manufacturing costs. Due to the high initial costs and a time mismatch between revenues and costs in the service-based model, it required a longer time for the company to reach the break-even point (approximately 23 months). Overall, the case study shows that multi-method simulation modelling can provide decision-making support for a successful implementation of CMS.

Circular manufacturing systems (CMS) constitute complex value networks comprising a large and diverse set of stakeholders that collaborate to close the loop of products through multiple lifecycles. Complex systems modelling and simulation play a crucial role in providing quantitative and qualitative insights into the behaviour of such systems. In particular, multi-method simulation modelling that combines agent-based, discrete-event, and system dynamics simulation methods is considered more suitable to model and simulate CMS as it allows to capture their complex and dynamic nature. This paper provides a step-by-step approach on how to build a CMS multi-method simulation model in order to assess their economic, environmental, and technical performance for enhanced decision-making. To model and simulate CMS three main elements need to be considered: • A multi-method model architecture where the CMS stakeholders with heterogeneous characteristics are modelled individually as autonomous agents using agent-based, discrete-event, and system dynamics. • An agent environment defined by a Geographic Information System (GIS) to establish connections based on agents’ geographic location. • The product journey resulting from the product's interaction with various CMS stakeholders in the circular value network is traced throughout its multiple lifecycles.

Circular business models are gaining traction in academia and industry as an instrument to deliver environmental benefits while being economically profitable. Despite this increased interest, studies that quantitatively assess the impact of circular business models are limited. This study provides researchers and practitioners with a quantitative analysis tool to assess the dynamics of circular business models from both an economic and environmental perspective. Using the case study of white goods-as-a-service, this study employs multi-method simulation modelling in combination with statistical design and analysis of simulation experiments to investigate the effect of different factors including payment schemes (i.e., fixed fee, pay-per-use, and hybrid) and subscription contract duration (i.e., long-term, mid-term, and short-term) on the economic and environmental performance of access-based models. In addition, as the adoption of access-based models is economically challenging for manufacturers due to a discrepancy between costs and revenue streams, this study analyses the effect of different levers to improve the liquidity performance of access-based business models including deposit schemes, cancellation and collection fees, as well as partnering with financial institutions to cover the initial revenue gap. 

Manufacturing industry is a major consumer of the energy and material resources generating significant amount of waste. Circular manufacturing systems (CMS) that are designed intentionally for closing the loop of products for reuse, maintaining their original performance at the least, through multiple lifecycles are indispensable for sustainable development. For successful implementation of CMS, a systemic approach for integration of business model, product design and supply chains exploiting Information and Communication Technology (ICT) a vital enabler is essential. In CMS, the business model is a primary driver dictating the design of both products and supply chains. While these three functions influence each other in diverse ways, they also define needs and requirements for ICT infrastructure for handling the complexity of information management throughout the value chain. Several leading industrial practices across the manufacturing landscape are representative examples of CMS, where the systemic approach of integrating business model, product design, supply chain and ICT is taken into consideration. Prominent examples of such approach include companies like Xerox, Ricoh, Caterpillar, HP, Renault and Michelin. This chapter explores the concept of CMS, their characteristics and need in the context of circular economy. It also analyses leading examples of CMS implementation in the current linear economy paradigm and challenges in scaling up to realise their full business and sustainability potential.

It is estimated that the adaptation of the Circular Economy approach can yield material cost savings of hundreds of billions of dollars per year for the EU and can result in huge environmental benefits. To tap this potential, the manufacturing industry needs to take a circular approach, where the products are designed intentionally to be used for multiple lifecycles. However, there is a lack of methodologies to date that can support such an approach. To fill this gap, this research has proposed a novel methodological approach that can support designing products for multiple lifecycles to keep the products as well as the components and the materials at their highest utility and value at all times. This research has identified that there is a strong synergy among the concepts of product design strategies, product obsolescence and product end-of-life options. Taking this synergy as the foundation and adopting modular architectures in the product design and development process, lifecycle planning can be performed for products that will sustain multiple lifecycles. This research is performed in two steps: first, the research review process is used to explore the knowledge base in the field of product design methodologies and based on the insights from the literature a novel methodological approach is proposed; second, a case example is used to demonstrate the applicability and effectiveness of the proposed methodological approach.

This chapter will present an outlook on the modelling and simulation of circular manufacturing systems. Simulations in the linear context have long been an enabler in making the systems efficient through better design and improved decision-making. Circular aspects of manufacturing systems lead to another level of complexity to be tackled and understood in terms of the performance of the system from an economic, environmental and social perspective. This calls for enhanced understanding through analysis of the interdependencies between business models, product design, supply chains and consumption patterns interactions by modelling the effect of those interactions to provide a sound basis for decision-making. The role of modelling simulation for prediction and improved decision-making in complex situations will be presented and exemplified with case studies where simulation has been used as a tool to enhance decision-making. The chapter finishes by highlighting the potential of modelling and simulation in boosting the transition towards circular systems implementation.