With the right innovations, the circular economy can contribute to economic growth while meeting sustainability ambitions.

The EU-funded ReCiPSS project demonstrates how manufacturing can achieve this by adopting product-service systems.

Moving industry from linear to circular models offers new business opportunities, while minimising waste and environmental damage. 

While ever-increasing consumer demand for goods helps boost economies, making these products sustainably remains a challenge, as manufacturing is often based on the ‘take-make-dispose’ model. What’s more, the availability of raw materials is dwindling, environmental regulations are becoming more stringent, and consumers increasingly expect greener products.

Attractive alternative

The practice of circular manufacturing systems (CMSs) offers an attractive alternative by optimising resources and reducing waste. Yet according to Magnus Wiktorsson, project coordinator of the ReCiPSS project, “research shows that these approaches are often fragmented, complex and poorly implemented.”

To demonstrate how CMSs can meaningfully contribute to the circular economy, ReCiPSS transformed the business models of two very different industries – white goods and automotive cores (remanufactured parts), by introducing product-service solutions to both.

These industries were selected as they differ in how tightly their value chains are operated. The original equipment manufacturers (OEMs) of white goods typically have a lot of control over their value chain, while the value chain is more complex for automotive parts.

“By developing these two very different business models, we ensured that our economy principles were applicable to a range of manufacturing scenarios,” said Farazee Asif, ReCiPSS operations manager.

Revolution under way

For the white goods demonstrator, project partner Gorenje deployed 333 specially adapted pay-per-use washing machines and dryers across Denmark, the Netherlands, Slovenia and Sweden, installing them in private homes, student dormitories and community laundry rooms.

Each appliance was fitted with sensors to monitor the functioning of the machines, alongside their wash cycle statistics (temperature, load, etc), in real time. The resulting data is hosted on an internet of things platform – accessed by users, OEMs and service providers – and can provide alerts when machines need maintenance, as well as offering tips to users, such as how to make energy savings.

“We also investigated repairability and recyclability options, putting in place the infrastructure necessary to refurbish each appliance at least twice, so that it could function well over three life cycles, of five years each,” adds Asif.

This solution extends each appliance’s lifespan, increases overall resource efficiency, reduces pollution and waste, while making laundry more ecological.

More than the sum of its parts

The automotive demonstrator, which enables parts (known as ‘cores’) to be traded, was implemented by project partner C-ECO and tested in Germany. It comprised a ‘management-as-a-service’ offering, supported with a data management platform.

Compared to the white goods demonstrator, the value chain for automotive parts trading is more complicated, involving reliance on third parties for logistics, supplies and remanufacturing. This complexity increases time, costs and quality variability, making the parts’ reuse less appealing than simply finding new parts, for those in vehicle manufacture and maintenance.

ReCiPSS simplifies the process by including all the steps of cores trading – such as inspection, sorting and transportation – in a one-stop shop, while also ensuring that information about the cores is accessible and reliable.

To evaluate the performance of both demonstrators, five simulation models were developed and enabled the team to experiment with different operational, supply chain, lifecycle cost and product design settings. The outputs from these have informed marketing and revenue strategies.

“We estimated that collectively our 333 laundry appliances could generate revenues of EUR 90-150 000 annually, saving four tonnes net CO2 equivalent and 2.8-8.3 tonnes of materials net per year,” says Asif. “The 100 000 cores identified and evaluated in our automotive demonstrator led to an estimated savings of 390 tonnes CO2 equivalent through improved logistics and 450 tonnes CO2 equivalent from remanufacturing.”

From processes to policies

A policy brief developed by ReCiPSS identifies the obstacles faced when trying to adopt circular manufacturing practices and includes recommendations for a product policy framework. This would help industries and governments transition to a circular economy by improving regulations and providing greater economic certainty for manufacturers.

The project coordinator, KTH Royal Institute of Technology, has already contributed findings from ReCiPSS to help develop ‘ISO 59010: Circular Economy – Guidelines on business models and value networks’. This included lessons learnt about value chain activities such as circular design, reverse logistics, product life extension and resource management.

Partner Gorenje continues to gather data from their pay-per-use laundry appliances to inform future innovations, with a full commercial roll-out planned for 2024.

Meanwhile C-ECO’s ‘management-as-a-service’ for automotive cores is already a vital part of its product portfolio. Both testers of the demonstrator continue using it, accompanied by over 7 000 automotive workshops and a newly signed up company.

“As this approach has sparked interest beyond the automotive industry, C-ECO continues to work on tailoring the service and developing new features to realise that potential in other sectors, partly within the EU-supported (DiCiM) project,” said Asif.