The Effect of Procurement 4.0 on Circular Economy through Productivity in Remanufacturing Operations: The Complementary Role of Resources

Sharjeel Irfan and Danish Ahmed Siddiqui

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: This research investigates the role of Procurement 4.0 (P4.0) in enhancing productivity in remanufacturing operations and advancing circular economy (CE) performance within Pakistan's manufacturing sector, drawing on the Resource-Based View (RBV) theory to frame the analysis. This study examines how P4.0 which is measured by procurement strategies, planning, and performance review can enhance circular economy. We proposed P4.0 factors increase Productivity in remanufacturing operations, thereby enhancing circular economy. We also contend that these relationships are moderated by organizational resources, namely talent, managerial capability, and technological infrastructure. Meaning that the successful deployment of these digital tools can enhance the effect of P4.0 on remanufacturing operations, and the onward effect on circular economy. The study employs a quantitative approach, applying Partial Least Squares Structural Equation Modelling (PLS-SEM) to analyse survey data from manufacturing firms, thereby validating the above-mentioned relationships. The results of the structural model assessment confirmed that all hypothesized relationships (H1-H8) were statistically significant. For the direct effects, Procurement 4.0 (P4.0) Strategy has a positive impact on productivity, suggesting that adopting digital procurement strategies enhances remanufacturing performance. P4.0 Planning exerts the strongest effect among others. Similarly, P4.0 Review positively influences productivity. Finally, H8 demonstrated a very strong effect of Productivity on Circular Economy (CE) Performance. With regard to moderating effects, the results also provide strong support for the role of Talent, Technological Capability, and Management Support as amplifiers of the direct relationships. For Talent, H4a-H4c demonstrated significant moderation between P4.0 Strategy, Planning, and Review on productivity, while H7a confirmed that Talent strengthens the link between productivity and CE performance. For Technological Capability, H5a-H5c indicated significant moderating roles across strategy, planning, and review on productivity, while H7b showed a positive moderation between productivity and CE performance. Finally, for Management Support, H6a-H6c reported significant moderating effects on the relationships between P4.0 practices and productivity (β = 0.074-0.089, p

Keywords: Procurement 4.0; Industry 4.0; Remanufacturing Operations; Circular Economy (CE); Resource Based View (RBV); Sustainable Supply Chain; Technological Resources; Digital Procurement Strategy (search for similar items in EconPapers)
Date: 2026
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