Becoming more circular is the future. It's better for nature and better for your business, with the potential to cut up to 50% on product costs1. And it offers great other business opportunities.
Using more sustainable business modelsThe new 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. In addition, it is important to remember that extending the life of a product 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.
Deploying used components in a new product is a fantastic way to maintain value and earn money. However, it means that in many cases the business model and thinking needs to be changed.
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)