Implementation of Circular Economy in ETO Organisation: Use of Digital Lean and Risk-Based Thinking Perspective

There is a rising regulatory and societal concern for the environment, forcing companies to include the circular economy (CE) concept in their business models and management practices. The transition towards a CE is inescapable and requires engineering to order (ETO) organisations to re-think their strategy and the way they create and deliver value. “Digital lean” is a promising concept that provides major opportunities for enterprises to move towards more sustainable industrial value creation by incorporating CE goals. This manuscript first presents a short literature review that indicates a gap when it comes to the symbiosis of lean, digitalisation and CE. According to the literature review, there is a shortage of descriptive lean and CE industrial case studies to illustrate best practices in ETO organizations. To address the gap, this paper demonstrates the practical case study results of an ETO organisation, to illustrate how to use digital-lean and risk-based thinking in a CE transition phase. The paper highlights lean practices, supported by digitalisation, that enable project-oriented organisations to simultaneously improve the efficiency of the product life cycle process and process performance. A risk-based thinking perspective is used to evaluate risk in a case study of an organisation, when improving or establishing processes and controls for transition to CE. The findings presented in this paper increase knowledge of how ETO organisations can adapt to CE with the use of a digital lean and risk-based perspective. The findings are useful for practitioners of ETO organisations who are in the CE goals’ implementation transition phase.