Dynamic Modeling of Transformation Capabilities towards Circular Economy for Automotive Manufacturing Company of Ethiopia (AMCE)
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Date
2024-07
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Addis Ababa University
Abstract
Manufacturing industries face enormous hindering factors during the production process. One of the reasons is the scarcity of raw materials. Automotive Manufacturing Company of Ethiopia (AMCE) is one of the industries who faced the raw material scarcity. This scenario forced the industry to operate only for about 10.7% of its annual production capacity. Using these scarce raw materials wisely is crucial. Hence, this research aimed to visualize the capability of the industry to use this scarce raw material circularly through reducing, reusing, and recycling (3R)mechanisms.
During data collection and analysis, both qualitative and quantitative data collection and analysis tools have been used. The data has been analyzed through system dynamics modeling of reducing, reusing, and recycling of raw material. The capability variables identified were technology, leadership, strategy, finance, human aspect, collaboration, culture and mindset. The strategic scenario has been developed through the change in the raw material input and automated work stations. As a result, the amount of waste accumulation decreases while reusing and recycling of scrap increases. As the automated work stations increase, the scraps recycling increase significantly.
The company has the capability to transform to a circular economy system through reducing the defect, reusing and recycling of metallic scraps in order to enhance the raw material availability. Automated work station development will decrease the amount of waste accumulation by an average of 58%. Therefore, it is safe to conclude that circular economy can be applied for wise raw material utilization in the case company.
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Keywords
Resource Utilization, Circular Economy Implementation, Transformation Dynamic Capability, Sustainability.