RecycleMatch Webinar - How to manage commercial waste as a product, Part 2
The first era of sustainability, sustainability call 1 0, focused on cleaning increasingly restricted air environmental mess federal legislation and water pollution of the planet, as well as hazardous waste, and companies adapted to the new sustainability regulations 2 0 has a broader perspective, which not only reduces the toxic waste, but the waste of all types the business community realized that less waste means lower cost and pitched in, more and more often the efficiency and increase profits in the process.
But in this whole era of ecology more and more, the linear business model, which dominated the modern world since the industrial revolution, has remained basically unchanged Take, do and have is what Ken Webster, chief innovation at the Ellen MacArthur Foundation, she calls for his recent book, the circular economy a wealth flows.
What Webster and others are now advocating is something much more radical that recent efforts to reduce waste in its purest form, durability 3 0 circular economy emulates the natural world Allen Hershkowitz is a strong supporter of veteran recycling Natural Resources Defense Council and co-founder emeritus president of the Alliance Green sports He noted in his opening speech at the Wharton conference, the circular economy concept to business reality in nature there is no waste of waste becomes a nutrient body to another body.
Similarly, the circular economy passes the notion of consumables, visualization of manufactured products that have outlived their usefulness as nutrients that help feed more production The concept of waste disappears and irreplaceable natural assets preserved lives products are extended and new products are generated from the remains of old.
Gary Survive, Professor Wharton and IGEL colleagues hosted the circular economy conference he noted in his opening speech that this new approach represents an incredible opportunity for business Survive but also stressed that the realization of this potential demand in disruptive innovation technology, manufacturing, supply chains and business models, as well as in the corporate culture and society in general is still early, Survive said, but the momentum is rapidly building as large companies, including Dow Chemical, Caterpillar, HM Phillips and enthusiastically embrace the concept of circular economy.
At heart, the circular economy is to preserve the traditional recycling value reduces waste, but only gets a small fraction of the potential benefits of a product manufactured according Helga Vanthournout, senior expert with the Business Center and McKinsey environment co when you recycle a product after a single use, you lose the entire value of the energy, labor and assembly that were added by the manufacturing process.
A 2013 report of the circular economy of the Working Group, the resilient resources in the UK, offers a dramatic example The study found that iPhone keeps reused about 48 of its initial value while recycling its components retains only 0 24 less complex manufactured products offer less dramatic, but still significant returns recycling one ton of textiles, for example, retains June 9 from baseline compared to recycle 0 4.
Recycling is also too late in the process to address the environmental damage caused by himself making As noted Hershkovitz, more than 90 of the impact of a product arrived before opening the package.
The business community is becoming increasingly excited about the potential benefits of circular economy, both for the environment and the bottom line instead of limiting their sustainability efforts to increase efficiency-to- ie waste reduction, more and more companies focus on the rise in productivity, the ability to produce more without using more resources or incurring more cost Survive as pointed out, it is too early in the process but already the pioneers of circular economy are successful on many fronts.
The remanufacturing companies that manufacture products with high intrinsic value, says Vanthournout, realize that when a customer is finished with a product for any reason, he still has a lot of residual stresses She Phillips as a good example not take Phillips only obsolete, but also defective or broken parts and whole goods of medical imaging equipment, for example to restore good as new condition and then redeploy them in the market these remanufactured products appeal to smaller hospitals can not always afford the latest and best equipment, but can not accept anything that is not in good condition.
Caterpillar is another leading remanufacture 65 of the company's costs are generated by materials, which gives a strong incentive to fully embrace the concept With its cost-effective program Cat Reman Caterpillar encourages the return of the parts used in sharing reducing manufacturing costs with the once restored consumer good as new, the recovered parts are either used in the manufacture of new equipment or sold as cheaper spare parts, opening a new market for the business.
Remanufacturing is not only good for the bottom line, of course; it also has enormous benefits for the environment Caterpillar, for example, estimated that the refurbishment of a yoke led to 61 fewer greenhouse gases, a 93 reduction in water use, reduced 86 of the energy consumed and a reduction in the 99 landfill waste.
Cascading significant in its own right, Rework is also part of a circular economy concept more Cascading refers to the successive use of materials, components and whole products for use in the cycle to another While there is generally a loss value at each stage, over time the overall value from the original product is significantly improved.
For example, an old cotton sweater, instead of being discarded may continue to generate value in thrift stores or even tertiary secondary markets historically and more recently eBay and Craigslist Once the clothing is more appropriate to bring, experts say, its fibers can be used as fiber fill the furniture industry, after which the same fiber can be used again in the rock wool insulation for the construction Even after anaerobic digestion can be used to extract fuel and fertilizer from the old cotton.
There are times when the use of cascading actually increases the value of the original product in a process known as upcycling When HM fashion company uses recycled polyester from plastic PET polyethylene terephthalate bottles to manufacture clothing, for example, it is upcycling the material to a more sustainable use, and to prevent the use of petroleum hydrocarbons in the manufacture of the fiber.
New business models in the linear economy, consumers spend heavily on their own cars that spend most of their product lives more than 90 sitting idle in garages and parking spaces Uber, Lyft and other sharing economy companies suggest a different approach which, again, extracts more value from a single product.
Digital technology and big data are possible, sharing economy, its growth has been spectacular in virtually all sectors, including, travel, consumer goods, services, taxis, bikes and cars , finance, music, employment and the reduction of waste and the increase of the new approach the company can permanently change consumer attitudes to property in a recent PwC study, 81 of the people familiar with the economy of sharing agreed that it is cheaper to share the goods that possess individually and 57 agree with the statement of access is the new property.
But sharing is just one of the new ownership models embraced by leaders Servitization circular economy is another, a new business model that converts traditional products to services, either simultaneously with the sale of a traditional product or as a kind of Phillips leasing arrangement, for example, now sells lighting as a service According to the company, customers pay a service fee for a lighting system, while Phillips keeps property company installs, maintains and upgrades the system as needed, and at the end of the agreement, recycles equipment, saving the client the property of headaches and reduce energy bills by 55.
The interface is another pioneer, selling carpet service delivery to businesses and households, subcontracting to replace and recycle used tiles over time, rather than just selling floor as a single disposable product from the Wharton School now uses interface carpet in all its buildings.
In the aviation industry, the TotalCare aircraft engine Rolls-Royce program illustrates one form of the 21st century to rent instead of buying a motor for a fixed price, customers pay to use depending on the number of hours the engine is switched actually a plane, but the engine is not all that customers hire because Rolls-Royce also monitors the engine remotely and maintain, amend and replace parts as necessary the manufacturer engine generates more than 50 of its revenues through this program, while maintaining long-term customer commitment and greatly increases the lifetime value of the original product.
Renault's electric cars offer another approach servitization Instead of including the battery in the purchase price of the car, the company rents to French customers that allows Renault to replace the battery pack used as needed may be reconsidered or recycled to extract more value without any service delays for the customer.
When they wrote their book 2002 seminal Cradle to Cradle Redo the Way We Make Things William McDonough and Michael Braungart spoke of technical and biological cycles and nutrients.
Nature, of course, is the model of a circular economy, and as long as the population in some areas doesn t get too dense, nature makes good use of biological nutrients there are three hundred years, for example, natural processes kept the water flowing down the Delaware river clean enough to drink, notes Patrick Cairo, took his retirement senior vice president for business development at Suez in North America, but the 1960s, he said, there was so much waste dumped in Delaware as bacteria, that developed to attack the organic material consumed all the oxygen, so you had areas where there was zero oxygen in the water.
To reduce this environmental degradation, the towns in all the treatment plants built worldwide wastewater, which has reduced pollution, but did little to capture all the value in the original clean water Cairo says Hyperion, the huge processing plant in Los Angeles that receives 80 the city of wastewater for a long time pouring effluent into the Pacific.
Today, about 15 Hyperion wastewater is channeled to the plant near West Basin, operated by Suez, where the flow of secondary waste is treated at five different levels of purity and piped to customers who can use this particular water quality in another factory operated by Suez in Edmonton, Canada, biogas is extracted from the waste being treated.
Food waste, too, is reused in many ways at the highest level, uneaten food waterfalls to people without enough to eat elsewhere, compost takes a growing share of food waste that was simply rotting in landfills But by Nate Morris, founder and global CEO of Rubicon a world leader in solutions for waste and sustainable recycling, anaerobic digestion that extracts value from organic waste by converting it into energy or fuel, optimizes the use of equipment and is one of the most environmentally friendly and energy efficient solutions.
The circular economy also redefines the traditional relationship between manufacturers, suppliers and consumers in a circular economy, consumers who recycle products and distributors that will recover used products become suppliers and suppliers can sometimes play a key role in remake Vanthournout notes that Foxconn, which makes smartphones and other products for Apple and many other companies, is better positioned than the manufacturers to check the phones returned for quality, clean them if necessary, make appropriate labels on them, put software on the chip and put them on the market.
In his renovation factory near Seattle, Phillips offers a concrete example of this kind of collaboration One of the company's medical equipment providers now working on site at the Phillips factory, helping to refurbish key Vanthournout explains They found that this model has created the best margins for businesses, while maintaining a very high level of quality the arrangement also helps to resolve any concerns about intellectual property, an issue raised whenever s Collaboration on a product company.
For this kind of realignment of roles and work collaboration along the supply chain, it is important to consider the motivation of each player One approach is to share the value created by remanufacture with suppliers that contribute to the effort while ensuring that the manufacturer initiating cooperation gets enough added value to justify its investment.
Vanthournout used another experiment automakers as an example of how the right motivation can drive a Renault win-win solution had bought his cutting oil supplier on a volume basis The more oil the car company used more money supplier Renault has developed a supplier agreement that shifted the maintenance and service involving the oil supplier and changed the volume base purchase contract-based transactions in this new system supplier prosper through improvements that have enabled oil and reused many times that is exactly what happened with the implementation of design changes, the extended supplier considerably the period of use of oil, and in the process was able to improve its margin of 125 and total cost of ownership for Renault cutting fluids has ch UTE about 20.
Rethinking the supply chains and business models, establishing new collaborative relationships, finding ways to extract value manufacturing and biological materials none of this is easy, and most elements radically transformed are interconnected, the linear economy begins to curve, but it is still a long way to go.
The reason I say it is the beginning because it is so complex, says Survive But the enormous commitment of large companies is promising is incredibly powerful, adds Survive, but it's not like we are now, aujourd ay, in the circular economy is much talk about it, there's a lot of buzz about it, but we haven t done yet.
Turning waste streams into value streams, waste, value, business models chains.