Circular Economy Flashcards
Definition
an industrial economy that is restorative or regenerative by intention and design
from a linear economy dominated by the sale of products: rewards are based on resource consumption
to an economy that rewards resource conservation and restoration.
Aims
to create a regenerative system, in which resource input and waste, emission and energy leakage are minimised by slowing, closing, and narrowing material and energy loops.
This can be achieved through:
long-lasting design,
maintenance,
repair,
reuse,
remanufacturing,
refurbishing and
recycling
Three Key Principles
Eliminate waste and pollution. We need to consider waste and pollution as design flaws rather than inevitable by-products of the things we make. By changing our mindset and harnessing new materials and technology, we can ensure they’re not created in the first place
Circulate products and materials. We can design products to be reused, repaired, or remanufactured. But making things last forever isn’t the only solution. When it comes to products like food or packaging, we should be able to keep them in circulation, so they don’t end up in landfill straight away. Examples could include but not limited to replenish, repurposing products and materials, the design for serviceability to extend the life of products and assets, operate with user-oriented services that maximise the use of products such as leasing, pooling, optimization of transport and logistics, among others
Regenerate nature. There’s no concept of waste in nature. Everything is food for something else – a leaf that falls from the tree feeds the forest. By returning nutrients to the soil and other systems, we can enhance natural resources. Examples could include but not limited to residual supply chains, etc.
Benefits
Operational as well as strategic
Opportunities for value creation within the economical, business, environmental & societal spheres.
Fewer greenhouse emissions
Increase potential for economic growth
Employment growth
Volatility reduction and safeguarded supplies
New profit opportunities
Demand for new services
Getting to know clients better
What you need
Internal change management:
customer/consumer/user’s readaptation,
supply-contracts’ change
new training needs, process reengineering
Barriers
Social and environmental externalities are not considered in prices, privileging financial market signals instead of people and nature when economic decisions are made
Prices of raw materials are fickle and at low prices alternative, good-quality secondary resources are not competitive;
Circular economy business models are harder to develop, as most investors are still working under a linear economy logic and sometimes upfront investments are required;
The demand for circular products and alternatives is still small.
Insufficient technical knowledge to support the growth of CE. There aren’t still many qualified professionals with technical or ‘information and communication technology’ (ICT) knowledge.
Strategies for Improving Environmental Performance
Internal
affect industrial processes but are not seen by the customer.
I.e. Toyota’s own internal manufacturing leadership– waste/energy/water. None of which are intended to appeal to customers but do reduce the cost of manufacture.
Ecover only uses naturally grown materials to produce cleaning products – a sector dominated by chemical processing companies using oil and other bases, this is an example of material substitution.
External
do involve and positively affect the customer.
External examples include the Toyota Prius product which claims superior environmental performance and reduced petrol cost for the customer.
MacArthur Foundation
Outer loops are more energy and resource intensive so try to make use of as many inner loops as possible
The inner circle reduces risk
recycle - refurfish remanufacture - reuse - maintain
Examples
Notpla
100% made of plants and seaweed
Biodegradable
Cheaper than plastic
Nappies
Disposable inserts
Product Oriented Services
Maintenance: Preventative, predictive and reactive
the PS provider offers maintenance services that may be performed on- or off-site, directly or remotely, programmed or available 24/7 for emergencies.
By using an advanced virtual private network (VPN), Philips Healthcare provides a global remote diagnostic service, allowing the identification of system errors for diagnosing, troubleshooting and performing an immediate remote repair
Repair: activities are likely to be covered by a standard warranty, in accordance with the current laws and regulations.
DAF repairs
Remanufacturing
Refurbish
The PS provider sells remanufactured/refurbished products or refurbishment services for the existing products.
The CAT Certified Rebuild Program offers a like-new machine with a like-new warranty and a new serial number starting from an old product that has been completely disassembled and rebuilt from the ground up to include all CAT product updates. Apple provides special offers for refurbished Macs & iPods.
Refurbishing services may be offered in combination with a safekeeping service.
Annabella Pelliccerie provides a free fur coat “summer storage” service.
Ecolo Green Car Wash offers car-cleaning services to companies directly in car parks using eco-friendly cleaning products
User and Result Oriented Services
Leasing: the lessee pays a regular fee for unlimited and individual use of the product.
Thanks to lease line solutions, the customers of Norbain SD, which is an English distributor of Access Control and Intruder Detection equipment, benefit from no capital outlay,
100% tax deduction and fixed costs. Most car manufacturers offer a lease for their electric or hybrid cars, particularly when introducing new technology.
Renting: Short-term / Long-term renting
The customer uses the product individually for a predetermined (short/long) period.
For instance, with Peugeot Renting, the customer pays a monthly fee based on the required vehicle type, contract length and mileage with no initial investment, residual value risk or product disposal.
The contract can be tailored based on the customers’ needs and includes the cost related to the vehicle use, such as maintenance and repair services, insurance, emergency assistance, tyre replacement, and administrative management. With the final bill the company provides a report summarising the CO2 emissions of the rented vehicle over a chosen interval.
Sharing : product is sequentially used by different customers.
Zipcar is a membership-based car sharing company providing automobile rentals to its members that are billed by the hour or day.
Companies for eMilan is a project launched in Northern Italy by Arval and Bosch that offers electric car sharing. The employees of the companies subscribed to the service may use electric cars in the Milan area
Pooling: The pooling approach requires the simultaneous use of a product by different customers. A Pool Service is provided by Turbine Apache, which is a servlet-based framework that allows experienced Java developers to build web applications quickly
Rideshare is an American company that provides van- and car-pooling services called Easy Green Carpools and is characterised by a hybrid car fleet.
Pay per use:
Ricoh provides PS solutions and offers a cost per- page formula. The service provider covers the activities needed to maintain the availability of the copying function in the customer office; the customer pays based on the number of printed copies.
Canon offers a pay-per-print with consultancy services that include a customer process analysis to support the customer and customise the PS offering based on the customer’s needs, activities and organisation.
Ricoh expands this pay-per-use service to the sustainability domain by introducing its pay-per-page-green solution. Ricoh considers the environmental variables when designing and providing the service.
With the “Total Care package” service, Rolls-Royce Aerospace Plc retains the ownership of the gas turbine engine instead of transferring it to the airline companies to deliver “power-by-thehour
Pay by result:
Orica provides a functionality-based pay-per-result solution; with the “Rock On the Ground” (ROG) solution, it can provide its customers with complete services tailored in-situ, including design, process simulation and mining support for blasting process optimisation; this optimisation includes planning the blast, drilling the holes, inserting the explosive and firing the blast. Thales Training & Simulation is a solution for training pilots and managing simulator-building facilities.
In the chemical sector, PPG Industries is a worldwide supplier of paints, coatings, chemicals, glass, fibreglass and optical products. Houghton is one of the world’s largest suppliers of specialist industrial production lubricants and fluid management services.
Houghton’s fluid management services are mostly based on a fixed-price business model; Houghton overtakes the customer’s lubricant management. In some cases, the contracts include gain-sharing mechanisms.
Outsourcing: The PS provider manages one or more activities for the customer, but the decision regarding how to perform and control these activities remains the customer’s responsibility.
With the Full Service Maintenance Performance Management, ABB takes the responsibility for the engineering, planning, execution, and management of an entire plant’s maintenance activities under a long-term, shared-risk, shared-reward contract.
End of Life
Recycling: The PS provider removes the product and provides recycling/dismantling services. This service is common in the electronic and home appliance industry. Examples include: Braun, Electrolux, Motorola, Nokia, Sony
Repurposing
Disposal
Phillips
High Value Manufacturing
Value proposition: “Extending the life of your MRI scan’
This business model: allows for magnet reuse and provides a system that has the same serviceability as new systems, and a one year warranty
Reverse logistics
Design: repurposed system design makes it possible to offer a high-performance system at an affordable price.
Partnering: 3rd Party contractor for reverse logistics
Rolls-Royce
Value proposition: ”On-time aircraft departure and fuel efficiency”.
Business model: RR tailored for individual operators, offers a range of services extending to aspects of support such as the latest predictive maintenance, asset and logistics mgmt., as well as repair and overhaul.
Partnering: multiple partners worldwide are interconnected to share maintenance workload and risk.
Digital Technology to: Profile Per Asset per Customer. Customer Metrics. Prognostics, traceability, moving to Digital twins and blockchain
