Procurement 4.0 and its implications on business process performance in a circular economy

•Studied the Procurement 4.0 and its implications on process performance in the circular economy.•Investigated the moderating effect of information processing capability on procurement 4.0 and performance.•Tested the theoretical framework among South African manufacturers.•Simulated the business process for further exploring procurement 4.0 capabilities.•The procurement strategy and procurement performance positively influences buyers’ intention. The purpose of this study is to identify how Procurement 4.0 and digital transformations are related and how digital transformation impacts the intention to optimize the procurement process in the circular economy. The moderating effect of information processing capability is also investigated. We survey South African manufacturers and analyze survey results using the Partial Least Squares Structural Equation Modelling (PLS-SEM) approach to test the research hypotheses and our theoretical framework. Finally, a sample business process is simulated to evaluate how Industry 4.0 automation can influence organizational procurement process optimization and circular economy performance. The findings of this empirical study indicate that Procurement 4.0 strategy positively influences buyers’ intention to optimize business processes. Second, Procurement 4.0 performance review positively influences buyers’ intention to optimize business processes. Third, information processing capability moderates the effect of Procurement 4.0 performance review on buyers’ intention to optimize business processes. Finally, buyers’ intention to optimize business processes plays a key role in enhancing circular economy performance. The simulation results demonstrate the potential benefits from industry 4.0 applications in the procurement function in a circular economy.