Assessing the Circular Transformation of Warehouse Operations Through Simulation

Logistics and warehouse operations experience an increasing pressure to adopt sustainable practices. The logistics industry generates substantial material waste, with cardboard being the primary packaging material. Adopting Circular Economy (CE) principles to control this waste is important for enhancing sustainability. However, there is a lack of studies on transforming warehouses into more sustainable operations. This paper studies the ability to transform the linear supply chain of a distribution warehouse into a circular supply chain by applying lean manufacturing principles to eliminate cardboard waste. A structured framework is presented to outline the project’s methodology and illustrate the steps taken to apply the concept of CE. The paper also tests the capability to simulate warehouse operations with engineering software using limited available data to generate various scenarios. This study contributes by showing how discrete-event simulation combined with VSM and 6R principles can provide operational insights under data-constrained conditions. Bridging the gap between theory and practice. Multiple operational scenarios were modelled and run, including peak and off-peak demand periods, as well as a sensitivity analysis for recycling durations. A comparative evaluation is shown to demonstrate the effectiveness of each alternative and determine the most feasible solution. Results indicate that introducing recycling activities created some bottlenecks in the system and reduced its efficiency. Furthermore, suggestions for future improvements are presented, ensuring that on-site actions are grounded in a simulation that reflects reality.