Enabling Green Manufacturing in MSMEs through Circular Economy and Energy Optimization Models

International Journal of Industrial Engineering
© 2025 by SSRG - IJIE Journal
Volume 12 Issue 2
Year of Publication : 2025
Authors : Rohit Ashok Mohite, Ravi Harendra Chourasiya, Sandeep Sharma
pdf
How to Cite?

Rohit Ashok Mohite, Ravi Harendra Chourasiya, Sandeep Sharma, "Enabling Green Manufacturing in MSMEs through Circular Economy and Energy Optimization Models," SSRG International Journal of Industrial Engineering, vol. 12,  no. 2, pp. 1-14, 2025. Crossref, https://doi.org/10.14445/23499362/IJIE-V12I2P101

Abstract:

The transition to green manufacturing is pivotal for achieving sustainable industrial growth, particularly in the Micro, Small, and Medium Enterprises (MSME) sector of developing economies like India. This paper explores the integration of Circular Economy (CE) principles and energy optimization models (EOMs) as dual enablers of green manufacturing practices in MSMEs. The study adopts a mixed-methods approach, drawing insights from qualitative interviews with 50 MSME stakeholders and quantitative energy performance data from selected enterprises. The research identifies key barriers—such as technological gaps, policy ambiguity, and lack of financial incentives—and proposes an integrated CE-EOM framework that enhances resource efficiency, waste minimization, and energy sustainability. Empirical validation through case studies and simulation of energy-saving interventions demonstrates that CE and EOM implementation can result in 20–35% resource efficiency gains and up to 25% reduction in energy costs. The findings reinforce the strategic significance of green transitions for MSMEs, positioning them not only as participants but as pioneers in the sustainable industrial revolution. Policy recommendations, technological interventions, and training roadmaps are proposed to accelerate adoption at scale.

Keywords:

Green Manufacturing, MSMEs, Circular Economy, Energy Optimization, Sustainability, Resource Efficiency.

References:

[1] Debajit Palit, and Akanksha Chaurey, “Off-Grid Rural Electrification Experiences from South Asia: Status and Best Practices,” Energy for Sustainable Development, vol. 15, no. 3, pp. 266-276, 2011.
[CrossRef] [Google Scholar] [Publisher Link]
[2] Vasileios Rizos et al., “Implementation of Circular Economy Business Models by Small and Medium-Sized Enterprises (SMEs): Barriers and Enablers,” Sustainability, vol. 8, no. 11, pp. 1-18, 2016.
[CrossRef] [Google Scholar] [Publisher Link]
[3] IRENA, “Renewable Power Generation Costs in 2019,” Report, International Renewable Energy Agency, pp. 1-144, 2019.
[Google Scholar] [Publisher Link]
[4] Kapil Narula, B. Sudhakara Reddy, and Shonali Pachauri, “Sustainable Energy Security for India: An Assessment of Energy Demand Sub-System,” Applied Energy, vol. 186, pp. 126-139, 2017.
[CrossRef] [Google Scholar] [Publisher Link]
[5] “Prime Minister Kisan Energy Security Evam Utthan Mahabhiyaan (PM KUSUM),” Report, Ministry of New and Renewable Energy, 2022.
[Publisher Link]
[6] Patrizia Ghisellini, Catia Cialani, and Sergio Ulgiati “A Review on Circular Economy: The Expected Transition to a Balanced Interplay of Environmental and Economic Systems,” Journal of Cleaner Production, vol. 114, pp. 11-32, 2016.
[CrossRef] [Google Scholar] [Publisher Link]
[7] “Towards the Circular Economy Vol. 1: An Economic and Business Rationale for an Accelerated Transition,” Ellen MacArthur Foundation Report, pp. 1-98, 2013.
[Google Scholar] [Publisher Link]
[8] Jay Barney, “Firm Resources and Sustained Competitive Advantage,” Journal of Management, vol. 17, no. 1, pp. 99-120, 1991.
[CrossRef] [Google Scholar] [Publisher Link]
[9] Marian R. Chertow, “‘Uncovering’ Industrial Symbiosis,” Journal of Industrial Ecology, vol. 11, no. 1, pp. 11-30, 2007.
[CrossRef] [Google Scholar] [Publisher Link]
[10] Yong Geng et al., “Towards a National Circular Economy Indicator System in China: An Evaluation and Critical Analysis,” Journal of Cleaner Production, vol. 23, no. 1, pp. 216-224, 2012.
[CrossRef] [Google Scholar] [Publisher Link]
[11] “Promoting Energy Efficiency in Indian Industry: Energy Efficiency - Industry & Data,” Report, pp. 1-2, 2018.
[Publisher Link]
[12] Yuliya Kalmykova, Madumita Sadagopan, and Leonardo Rosado, “Circular Economy – From Review of Theories and Practices to Development of Implementation Tools,” Resources, Conservation and Recycling, vol. 135, pp. 190-201, 2018.
[CrossRef] [Google Scholar] [Publisher Link]
[13] Julian Kirchherr, Denise Reike, and Marko Hekkert, “Conceptualizing the Circular Economy: An Analysis of 114 Definitions,” Resources, Conservation and Recycling, vol. 127, pp. 221-232, 2017.
[CrossRef] [Google Scholar] [Publisher Link]
[14] “MSME Annual Report 2022-23,” Government of India, pp. 1-176, 2023.
[Publisher Link]
[15] Kapil Narula, and B. Sudhakara Reddy, “A SES (Sustainable Energy Security) Index for Developing Countries,” Energy, vol. 94, pp. 326 343, 2016.
[CrossRef] [Google Scholar] [Publisher Link]
[16] “SME Policy Index: Western Balkans and Turkey 2019: Assessing the Implementation of the Small Business Act for Europe,” Report, OECD, pp. 1-980, 2019.
[Google Scholar] [Publisher Link]
[17] Sustainable Development Goals – India, United Nations Development Programme, 2022. [Online]. Available: https://www.undp.org/india/sustainable-development-goals
[18] Nancy M.P. Bocken et al., “Product Design and Business Model Strategies for a Circular Economy,” Journal of Industrial and Production Engineering, vol. 33, no. 5, pp. 308-320, 2016.
[CrossRef] [Google Scholar] [Publisher Link]
[19] Michael Lieder, and Amir Rashid, “Towards Circular Economy Implementation: A Comprehensive Review in Context of Manufacturing Industry,” Journal of Cleaner Production, vol. 115, pp. 36-51, 2016.
[CrossRef] [Google Scholar] [Publisher Link]
[20] N.M.P. Bocken et al., “A Literature and Practice Review to Develop Sustainable Business Model Archetypes,” Journal of Cleaner Production, vol. 65, pp. 42-56, 2014.
[CrossRef] [Google Scholar] [Publisher Link]
[21] Martin Geissdoerfer et al., “The Circular Economy – A New Sustainability Paradigm?,” Journal of Cleaner Production, vol. 143, pp. 757 768, 2017.
[CrossRef] [Google Scholar] [Publisher Link]
[22] Qinghua Zhu, and Yong Geng, “Drivers and Barriers of Extended Supply Chain Practices for Energy Saving and Emission Reduction among Chinese Manufacturers,” Journal of Cleaner Production, vol. 40, pp. 6-12, 2013.
[CrossRef] [Google Scholar] [Publisher Link]
[23] Kannan Govindan, Hamed Soleimani, and Devika Kannan, “Reverse Logistics and Closed-loop Supply Chain: A Comprehensive Review to Explore the Future,” European Journal of Operational Research, vol. 240, no. 3, pp. 603-626, 2015.
[CrossRef] [Google Scholar] [Publisher Link]
[24] Jagdeep Singh, and Isabel Ordoñez, “Resource Recovery from Post-consumer Waste: Important Lessons for the Upcoming Circular Economy,” Journal of Cleaner Production, vol. 134, pp. 342-353, 2016.
[CrossRef] [Google Scholar] [Publisher Link]
[25] Rohit Ashok Mohite et al., “Enhancing the Competitiveness of MSMEs through Industrial Engineering Innovations in Supply Chain Management,” International Journal of Engineering Management, vol. 9, no. 1, pp. 30-38, 2025.
[CrossRef] [Google Scholar] [Publisher Link]
[26] Sameer Kumar, and Valora Putnam, “Cradle to Cradle: Reverse Logistics Strategies and Opportunities across Three Industry Sectors,” International Journal of Production Economics, vol. 115, no. 2, pp. 305-315, 2008.
[CrossRef] [Google Scholar] [Publisher Link]
[27] Zengwei Yuan, Jun Bi, and Yuichi Moriguichi, “The Circular Economy: A New Development Strategy in China,” Journal of Industrial Ecology, vol. 10, no. 1-2, pp. 4-8, 2006.
[CrossRef] [Google Scholar] [Publisher Link]
[28] Yong Geng, and Brent Doberstein, “Developing the Circular Economy in China: Challenges and Opportunities for Achieving 'Leapfrog Development',” The International Journal of Sustainable Development & World Ecology, vol. 15, no. 3, pp. 231-239, 2010.
[CrossRef] [Google Scholar] [Publisher Link] 
[29] Qinghua Zhu, Yong Geng, and Kee-Hung Lai, “Circular Economy Practices among Chinese Manufacturers Varying in Environmental oriented Supply Chain Cooperation and The Performance Implications,” Journal of Environmental Management, vol. 91, no. 6, pp. 1324 1331, 2010.
[CrossRef] [Google Scholar] [Publisher Link]
[30] Biwei Su et al., “A Review of the Circular Economy in China: Moving from Rhetoric to Implementation,” Journal of Cleaner Production, vol. 42, pp. 215-227, 2013.
[CrossRef] [Google Scholar] [Publisher Link]
[31] Abdul Moktadir et al., “Circular Economy Practices in the Leather Industry: A Practical Step towards Sustainable Development,” Journal of Cleaner Production, vol. 251, 2020.
[CrossRef] [Google Scholar] [Publisher Link]
[32] Steve Sorrell, Alexandra Mallett, and Sheridan Nye, “Barriers to Industrial Energy Efficiency: A Literature Review,” Working Paper, United Nation Industrial Development Organization, pp. 1-99, 2011.
[Google Scholar] [Publisher Link]
[33] Amol Singh, and Ashish Trivedi, “Sustainable Green Supply Chain Management: Trends and Current Practices,” Competitiveness Review, vol. 26, no. 3, pp. 265-288, 2016.
[CrossRef] [Google Scholar] [Publisher Link]
[34] Kevin Baird, and Sophia Su, “The Association between Controls, Performance Measures and Performance,” International Journal of Productivity and Performance Management, vol. 67, no. 9, pp. 967-984, 2018.
[CrossRef] [Google Scholar] [Publisher Link]
[35] N. Droste et al., “Steering Innovations towards a Green Economy: Understanding Government Intervention,” Journal of Cleaner Production, vol. 135, pp. 426-434, 2016.
[CrossRef] [Google Scholar] [Publisher Link]