Smart Circular Economy

Securing tomorrow’s value creation through data and technology

Today's products are tomorrow's resources!

Global supply chains are becoming increasingly sensitive to political and economic shifts. Raw materials are becoming scarcer, and societal as well as regulatory pressure to operate sustainably is growing. Companies therefore face the dual challenge: using resources more efficiently while maintaining their competitiveness.

Smart Circular Economy (SCE) is becoming the key to a resilient and competitive economy. It creates data‑driven, connected circular systems that keep materials, components, and information available throughout the entire product life cycle—opening the door to stable, economically attractive, sustainable, and sovereign value creation.

Keeping resources in circulation through interdisciplinary technological expertise

 

The goal of the Fraunhofer IIS strategic initiative Smart Circular Economy is to leverage more than 40 years of technological, data, and management expertise across disciplines to transform traditional take‑make‑waste supply chains into economically prosperous and resilient circular systems.

As the largest institute within the Fraunhofer‑Gesellschaft, we have an exceptional technological range at our disposal—from energy‑autonomous sensor technology and connectivity to non‑destructive testing methods, easily accessible cross‑company data spaces, and data‑ and resource‑efficient AI‑based analytics. Building on this foundation, we work with companies to develop R‑strategies tailored to their specific use cases and translate them into viable business models.

Leveraging the technological breadth of Fraunhofer IIS

At our institute, we can draw on technologies and expertise from a wide range of research units and departments when developing smart circular systems, including:

Supply Chain Services Division

Semantic Web, AI, and digital technologies for connected data ecosystems, digital twins, and circular‑economy product cycles.

 

Circular Service Engineering & Prototyping

Positioning and Networks Division

Energy‑autonomous smart sensing, edge AI, mioty, 5G/6G technologies, and localization technologies as the foundation for smart, connected products.

 

Positioning and Networks

Development Center X-ray Technology

Computed‑tomography‑based X‑ray, magnetic‑resonance, and optical technologies for inspection, sorting, and recycling.

 

Development Center X-ray Technology

Our strength: Technology driven circular solutions

We implement circularity both technologically and organizationally. This means we systematically combine technology integration with business model development—from hardware and software architectures to data driven services and digital ecosystems. Our work builds on decades of research in business processes, artificial intelligence, data acquisition and analysis, microelectronics, as well as signal processing and data transmission. Our approach centers on three key priorities:

Development of technology‑based circular‑economy processes and services – from analyzing economic and technical framework conditions to modeling circular business processes and implementing prototype digital services.

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Design of secure, interoperable data spaces—such as those based on Catena‑X or Manufacturing‑X—that enable companies to exchange data sovereignly and leverage it for new value‑creation models, including the development of governance strategies and structures.

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Development of standardized data models and interoperable digital twins as a foundation for transparency, traceability, and efficient resource utilization across the entire product lifecycle.

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Smart Circular Economy in Economic Practice

Products can be transformed into resources in different ways: components can be reduced, and products can be used and manufactured more intelligently. Their lifespan can be extended, or materials can be reused sensibly. We focus on key application areas where digital technologies and data make circular processes measurable and economically viable.

Reuse of Components

SMEs recover valuable spare parts from returned products: using the Digital Product Passport and the Digital Twin, they verify condition, origin, and approval status—components are efficiently reused instead of newly procured. We combine R‑strategies (reuse, refurbish) with DPP/Digital Twin technologies to make reuse along the supply chain data‑driven, transparent, and scalable.

Repair & Remanufacturing

Digital twins orchestrate repair and remanufacturing processes: component condition, bills of materials, work plans, and test results converge in an SME‑ready data space—throughput and quality increase, scrap rates decrease. We model digital R‑processes and link them to federated data ecosystems (e.g., Catena‑X / Manufacturing‑X) to enable sovereign, cross‑company data exchange.

Recyclable Material Flow Recovery

With digital product passports, material data, disassembly instructions, and alloy information become available for each component—SMEs return parts sorted by material and achieve higher revenues from recycling. We identify value potentials and requirements, harmonize data models, and develop interfaces for secure data sharing.

Condition Based Maintenance

IoT sensors and AI detect wear at an early stage; maintenance is carried out based on actual need rather than fixed intervals. This reduces downtime, spare‑parts consumption, and CO₂ costs—especially in manufacturing environments. We combine condition‑monitoring data with digital twins in data spaces to implement usage‑based reduction strategies in a robust and interoperable manner.

Aftermarket & Spare Parts on Demand

DPP‑secured specifications enable SMEs to additively manufacture rare spare parts with assured quality—supported by digital approval, traceability, and installation guides: We prototype CE services that integrate DPP data, bills of materials, and process parameters for a compliant, fully digital aftermarket.

Circular Product-as-a-Service für Geräte & Werkzeuge

SMEs offer machines and equipment for use rather than ownership: operating period, residual value, service, and take-back are managed via digital twins and data ecosystems—enabling predictable revenues and higher utilization. We develop circular, data‑driven business models including ecosystem governance and connect material, financial, and data flows.

Publications

Read our professional publications, studies, and scientific articles on the subject to learn more.

  • Papert, M., Hamper, A., Hoßbach-Zimmermann, N., Schuster, T., Bühler, L., Pflaum, A. (2024), „Towards a data-driven circular and embedded supply chain: Considerations from an ICT perspective“, 57th Hawaii International Conference on System Sciences (HICSS 57): January 3 – 6, 2024, Honolulu, HI, USA.
  • Bühler, L., Fendt, D., Wittenberg, T., Hamper, A. (2024), „Smart Circular Economy in healthcare – An introduction to the 9R framework”, 58th DGBMT Annual Conference on Biomedical Engineering! (BMT 2024): September 18 – 20, 2024, Stuttgart, D.

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