01732 759725
24
MPS
The circular economy is fast gaining
ground as the latest buzzword in
sustainability, bringing together
emerging practices, such as
collaborative consumption, and
traditional concepts like recycling
and remanufacturing. The circular
economy aims to eradicate waste by
departing from the linear ‘take, make
and dispose’ model and its reliance
on infinite natural resources and
energy. According to McKinsey, each
year around 80% of the $3.2 trillion
worth of materials used in consumer
goods are not recovered
1
.
Through a more effective use of
materials, the circular economy envisions
a smarter approach to the creation, use
and disposal/recycling of products. As well
as the obvious environmental benefits,
the transition to a circular economy will
be driven by the promise of over $1tn
in business opportunities, according
to estimates by the Ellen MacArthur
Foundation
2
. This includes material savings,
increased productivity, new jobs and new
categories of product and business.
International momentum
Some countries are already starting to
introduce legislative drivers such as waste
prevention targets and incentives around
eco-design to promote products that
are easier to reuse, remanufacture and
disassemble.
China has set up CACE, a government-
backed association to encourage circular
growth, while Scotland has issued its own
circular economy blueprint. In a significant
move, the European Commission’s circular
economy framework, to be released in
late 2015, is expected to introduce higher
recycling targets and a landfill ban on
recyclable materials across all 28 EU
member states.
According to weight-based material
flow analysis conducted in 2010 by the
Waste & Resources Action Programme
(WRAP)
3
,19% of the UK economy is
already operating in a circular fashion.
This relates to the weight of domestic
material input entering the economy (600
million tonnes), compared to the amount
of material recycled (115 million tonnes).
WRAP predicts this figure could rise to
nearly 27% by 2020, assuming 137 million
tonnes of material is recycled from a direct
material input of 510 million tonnes.
Services innovation
The circular economy is also enabling
some companies to think differently.
Whereas previously profits may have been
created by getting customers to buy new
equipment on a regular basis, in the future
taxes and other costs – such as those
forced on companies through the European
Waste Electrical and Electronic Equipment
(WEEE) regulations – may encourage more
design for longevity backed with a more
service-oriented profit line.
Our relationship with the products
and services we purchase could change
dramatically under a circular economy,
from ownership to favouring access and
performance. By selling the benefits
of products as part of an overall
solution, instead of the actual products,
manufacturers begin to design against
As WRAP launches a new report suggesting that expansion of the
circular economy could create three million extra jobs in Europe by 2030,
Quocirca’s Louella Fernandes explains how MPS can help reduce waste
Rethinking MPS for
the Circular Economy
different criteria, monetising product
longevity through service, upgrade and
remanufacturing.
Some product categories are more
likely to benefit from being a service-based
proposition than others. A recent
Guardian
survey found a majority of business owners
(66%) felt technology hardware/equipment
offered most value as a product-service
model, followed by electronic and electrical
equipment (56%) and cars, tyres and parts
(51%)
4
.
Indeed, smart, connected products
are expected to transform the next
wave of manufacturing. Self-monitoring
enables remote control, optimisation and
automation and the tracking of a product’s
operating characteristics and history to
better understand product usage. This
data has important implications for both
product design and after-sales service –
enabling proactive and automated service
and maintenance.
This approach facilitates a shift to
usage-based models, offering the potential
to extend the ‘pay per use’ contracts
associated with smartphones to other
products, such as washing machines or
even clothes. Already, Philips, a strong
advocate of the circular economy, sells
lighting as a service to its business
customers. Customers only pay for the light
and Philips takes care of the technology
risk and investment. It can also take the
equipment back to recycle the materials or
upgrade them for reuse.
The next frontier for printer
manufacturers
The circular economy approach is nothing
new in the print industry, which has long
been striving to enhance its sustainability
credentials. This includes the manufacturing
process, the responsible recycling of ink
and toner and the provision of hardware,
software and services that eliminate
wasteful paper and energy usage.
From a manufacturer perspective,
many are already designing and building
products that are part of a value network
where reuse and refurbishment at a
product, component and material level
assures continuous re-use of resources.
Some
countries
are already
starting to
introduce
legislative
drivers such
as waste
prevention
targets and
inventives
around eco-
design
Louella Fernandes,
Quocirca
