Becoming more circular and sustainable is the future. It's better for your business and better for nature. It has the potential to cut up to 50% on product costs1.
Immediate more valueNew business opportunities come with reconsidering your business model if you are now selling products. The basic question is how to close the circle of products, components and materials that you put on the market, how to get them back.
It is important to remember that extending the life of a product or component gives immediate value. Maintenance and making a returned product ready for a next cycle of service is very profitable in relation to manufacturing a completely new product. A service or hybrid based business model might be a good way to get products and components back and re-use them.
A new role for productsProducts and components can play a new role. They may stay your property and help you to earn money from services. Or you may want to use components multiple times in different products. For that reason they will need to be durable, easy to maintain, and compatible, upgradeble and easy to disassemble. A whole new set of important factors comes into play.
From purchasing benefits to valuable insightsA business model which is for instance focused on providing services delivers a stable cash flow, whereas you stay the owner of the products. The products are a platform for selling services. It also provides a purchasing advantage because products can be maintained, repaired and therefore last much longer. Customers get more involved with the company as they buy a service rather than a single product. In the meanwhile products can be upgraded, so that customers do not need to make a new purchase decision, but keep using your products and realize that your business is doing business sustainably.
Running a service based model also renders very valuable data, about parts that wear in a product, how people use the products, new ideas and complaints from users about the product. Information that greatly helps to improve the products, create upgrades and create customer loyalty.
There are also great circular possibilities with hybrid business models or business models based on product sales, where a transfer of ownership of the product is involved, although getting the products back may be a challenge.
Developing products that are ready for the circular economyIn the transition towards a service-based business model, the view on products becomes radically different. They should ideally be very durable, easy to maintain, create a certain attachment with people, they must be compatible, upgradeable and easy to disassemble. Or they need to be prepared for later remanufacturing. A whole new series of important factors come into play.
We can help you to re-design existing products so they get ready for a different business model, for maintenance, repair, re-manufacturing or for re-use.
Practical tools to help you to get circularOur powerful practical tools help to transfer your company into a circular business. They help you to create new business models, opportunities for maintenance, refurbishment or remanufacturing of products, re-use of components, new partnerships that can transform returned parts and materials into usable input for production, rethink energy use, material selection and much more.
Call us on +31 20 820 22 11 to discuss your circular opportunities or get started with our Designguide.
1 McKinsey & Company: Manufacturing resource productivity (http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/manufacturing-resource-productivity)
Case: inline skate wheels, in a circular designThe patented wheel is build in two parts: a high quality aerospace alloy aluminum rim that will last for decades, with a durable nylon and TPU tire construction that allows the user to change tires, he does not need to dump the total wheel.
The tires can be collected and recycled, turning them into new tires. The nylon can be separated from the TPU, both of the materials are non-toxic.
"The interchangeable rim/rubber concept is a perfect example for ecological engineering. "