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world

Circular Economy

In the circular economy products and materials are reused and retain their value value. Unlike the current linear system, in which raw materials are converted into products to be destroyed at the end of their life. The new economical model will create new values for materials and products for users and for the producers. That leads to more chain co-operation, less resource consumption and less waste, innovation and new business.

Re-thinking Progress

Source: Ellen MacArthur Foundation


product

Product Design

We refer to product design in a circular economy as ‘Circular Product Design’. Although recycling has recently received a lot of attention in the business world, extending the useful life of products is about more than just recycling materials. It is about keeping a product as close as possible to its original state over time, for instance through longer use, repair, upgrading, refurbishment or remanufacturing.

The five principles for circular product design together form a concise guide to what circular product design entails.

Circulair product design:

  1. Elevates design to a systems level
  2. Strives to maintain product integrity
  3. Is about cycling at a different pace
  4. Explores new relationships and experiences with products
  5. Is driven by different business models

Six strategies for Circular Product Design

Clustering the result of existing research has led to the identification of six design strategies for circular product design:

  1. Design for Product Attachment and Trust: creating products that will be loved, liked or trusted longer
  2. Design for Product Durability: developing products that can take wear and tear without breaking down
  3. Design for Standardization & Compatibility: creating products with parts or interfaces that fit other products as well
  4. Design for Ease of maintenance and Repair: enabling products to be maintained in tip-top condition
  5. Design for Upgradability & Adaptability: allowing for future expansion and modification
  6. Design for Dis- and Reassembly: ensuring products and parts can be separated and reassembled easily

Source: Products that Last


business

Business model innovation

Business Model Archetypes

The five business model archetypes for “Products That Last” are intended to serve as a starting point for businesses and designers in thinking about longer-lasting products in a circular economy. They range from being primarily about product to being primarily about service.

  1. The classic long-life model: primary revenue stream from sales of high-grade products (e.g. the German company Miele’s washing machines) with a long useful life.
  2. The hybrid model: combination of a durable product and short-lived consumables (e.g. Océ-Canon, printers and copiers). Main revenue stream from repeat sales of the fast-cycling consumables.
  3. The gap-exploiter model: exploits ‘lifetime value gaps’ or leftover value in product systems. Main revenue stream from selling products, parts and services based on the mixed product life of components (e.g. printer cartridges outlasting the ink they contain, shoes lasting longer than their soles).
  4. The access model: provides product access rather than ownership (e.g. (i.e. the Dutch company GreenWheels’ shared car use)). Main revenue stream from payments for product access.
  5. The performance model: delivers product performance rather than the product itself (e.g. hours of thrust in a Rolls- Royce, ‘Power-by-the-Hour’ jet engines). Primary revenue stream from payments for performance delivered

Source: Products that Last

Business Model Canvas

Source: Strategyzer

Business Model Kit

Source: Board of Innovation


service

Service design

This is Service Design Thinking

source: This is Service Design Thinking

Product Service System

TukkerTischner-PSS-20041

1. Product oriented service

1.1 Product-related service
In this case, the provider not only sells a product, but also offers services that are needed during the use phase of the product. This can imply, for example, a maintenance contract, a financing
scheme or the supply of consumables, but also a take-back agreement when the product reaches its end of life. Product oriented services cause only incremental changes for the environmental impact.

1.2. Product-related advice and consultancy
Here, in relation to the product sold, the provider gives advice on its most efficient use. This can include, for example, advice on the organizational structure of the team using the product, or optimizing the logistics in a factory where the product is used as a production unit. This also causes incremental change for the environmental impact Often the advice is related to energy-efficiency solutions.

2. Use oriented service

2.1 Product lease
Here, the product does not shift in ownership. The provider has ownership, and is also often responsible for maintenance, repair and control. The lessee pays a regular fee for the use of the product; in this case normally he/she has unlimited and individual access to the leased product. Leasing barely influences the production and consumption level. The service providers does has influence of control, maintenance and repair. This might lead to slight increase in the environmental impact.

2.2. Product renting or sharing
Here also, the product in general is owned by a provider, who is also responsible for maintenance, repair and control. The user pays for the use of the product. The main difference to product leasing is, however, that the user does not have unlimited and individual access; others can use the product at other times. The same product is sequentially used by different users. Although renting or sharing doesn’t influence the production level, it does has influence on the consumption level. The product is used more intensely, increasing the utility, and this leads to a reduction of the environmental impact. This even more relevant when the environmental impact of the product is mainly caused by the production.

2.3 Product poolen
This greatly resembles product renting or sharing. However, here there is a simultaneous use of the product. The environmental impact might even be lower than product renting or sharing, because it also lowers the consumption of the product. This is caused because more people can make use of the product simultaneously.

 

3. Resultat oriented service

3.1 Activity management of outsourcing

Here a part of an activity of a company is outsourced to a third party. Since most of the outsourcing contracts include performance indicators to control the quality of the outsourced service,
they are grouped under result-oriented services. Activity management of outsourcing will not change the use of technology, the organisation and customer behaviour. The third party has to be more efficient and less costly than the company itself. This might lead to a lower environmental impact.

3.2 Pay-per-unit
The service still has a fairly common product as a basis, but the user no longer buys the product, only the output of the product according to the level of use. Examples are  ‘pay-per-use’, ‘pay-per-view’ of ‘pay-per-click’. Two aspects are important for ‘pay-per-unit’ concerning the environmental impact. Firstly, the service-provider is responsible for all the life-cycle costs. This stimulates to design a product in the most optimal way in terms of costs and parts that can be reused after the lifespan of the product. Secondly, ‘pay-per-unit’ has a direct influence on consumer behaviour, because the customer has to pay for direct use and thus lowers the environmental impact.

3.3 Functioneel Resultaat

Here, the provider agrees with the client the delivery of a result. This category is used in this article, in contrast to activity management/outsourcing, for a functional result in rather abstract terms,
which is not directly related to a specific technological system.Offering a functional result can have a radical change in both terms of used technology as well as the consumption level. The provider is, in principle, completely free as to how to deliver the result and can do this in the most efficient and effective way. This can lead to huge reduction in environmental impact.

source: Tukker et al, 2002