11. Ex 14 - WWL Research note to explore circular business model Flashcards
Why is WWL looking into circular business models?
As the carpet industry is increasingly being accused of being wasteful of env resources & of being a polluter for future generations
So created impetus to reduce env impact, especially with end of life carpets going into land fill
Looking into circular to try and combat this
What is circularity?
A circular economy is one that uses the output of one product as the input to another
means finding a way to use end of life carpets so that the underlying components can be recovered and re-used
What is WWL’s current position on circularity?
- Wool = renewable source, 100% wool yarn is biodegradable
- Synthetic madd from PP yarn (nylon & polyester): in principle highly recyclable (PP used in plastic bottles, bags, PP carpets)
WWL uses both, so could claim to be responsible business
Reality = most carpets aren’t recycled as traditional construction carpet construction is designed to hold them together, so doesn’t consider recyclability
E.g. 80:20 difficult to separate as tightly stitched and glued onto backing layer onto backing layer , which is made of variety of synthetic materials
To deconstruct traditional carpets means separating out and purifying all diff materials = time consuming & expensive
Would WWL need to make many changes to build recycling into current processes?
To build recycling into current processes without change, the construction methods and materials would only be feasible by increasing price - but not something that customers would tolerate.
Commercially - better to let consumers throw away old carpets and buy brand new one
How can WWL change their PP process to become more env friendly?
At present, PP still in early stages
But as sales increase and PP becomes more significant part of business, we have an app to build our sustainability credentials
So to make recycling of WWL end of time PP carpets to become commercially attractive, would need to radically change how PP carpets are made
- Yarn & all parts of backing would need to be fully recyclable PP if they are to be deconstructed & 100% re-use with no loss of underlying material
Can hen supply suitable recycling plant with HQ PP components, uncontaminated by other materials, which can in turn provide a new source of PP to be turned into new yarn, backing material & thus new PP carpet
What are the barriers for circular business model?
- Circular model needs to be commercially advantageous (i.e. help earn profit), but upfront costs of designing fully recyclable PP carpet and setting up required processes = £500k - £1m. This is significant inv so requires suitable return
- Need to find suppliers for fully recyclable materials
- Need supportive infrastructure of partners to provide collection & recycling facilities
- Need to find technical solutions for sustainable processing of end-of-life carpets
- Needs to be change in consumer behaviours and attitudes. Need to encourage to purchase recyclable carpets & ensure their perception of WWL is that of a sustainable carpet manufacture
Overall, need to manage tension between env sustainable and being accountable for providing commercially sustainable business
What would be the cost of introducing fully recyclable PP carpet and what does this cost involve?
£500k - £1m
TO design fully recyclable carpet and setting yp manufacturing process
What changes must be made to consumer attitude to make a fully recyclable carpet line become feasible?
1) encourage them to purchase recyclable carpets
2) ensure customer perception of WWL is that of a sustainable carpet manufacturer
How many of WWL’s carpets are recycled?
None -as carpets are designed to stay together so makes rcycling expensive and time consuming as have to separate out and purify all the different materials
What is the CIRCLE framework?
Design & marketing teams produced it as a communication device to develop WWL’s position in the market as a sustainable carpet manufacturer
Aim is to formulate the plans and performance metrics required to transition away from traditional manufacturer and move towards a circular business model
Clarity - establish clear strategic direction and design the business model around it
Inspiration - influence teh attitudes of key stakeholders through innovation and thought leadership
Redesign - ensure carpets are designed to be recyclable, incluidng both construction method and components used
Collaboration: work with key players in the value chain, including suppliers and relevant authorities
Leverage - ensure that commercial benefits from circular model are sustainable and help to achieve WWL’s long term goals
Ethics - ensure ethics drives strategic decision making
What is the acronym for the circle framework
Clarity - establish clear strategic direction and design the business model around it
Inspiration - influence teh attitudes of key stakeholders through innovation and thought leadership
Redesign - ensure carpets are designed to be recyclable, incluidng both construction method and components used
Collaboration: work with key players in the value chain, including suppliers and relevant authorities
Leverage - ensure that commercial benefits from circular model are sustainable and help to achieve WWL’s long term goals
Ethics - ensure ethics drives strategic decision making
