Manufacturing development, with the purpose of decreasing companies’ dependence

Manufacturing

PERSONAL ASSIGNMENT – THE CIRCULAR ECONOMY

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How will the
circular economy change the way manufacturing is done? In what ways

will product innovation and process design
need to change compared to today’s linear

economy?

 

The circular economy is a new concept which
fits into the framework of sustainable development, with the purpose of
decreasing companies’ dependence on scarce resources while adding more value.

In other words; producing goods and services while limiting the waste of raw
materials, energy and water, thanks to regenerative cycles;

 

« Nothing is lost, nothing is created, everything is
transformed »

 

At the opposite, a linear economy involves
the use of closing cycles, based on the “take, make and dispose” system.

 

The way
manufacturing is done will therefore change in:

 

Rethink the perception of materials:

Materials
will be viewed as essential components of a stock, not just as items flowing
through the making process only once.

 

Make the distinction with recycling:

By adopting systematic processes
(several life cycles), as well as the use and reuse of products and their
components, waste will become a valuable, reusable element within the chain.

 

Make the distinction between the
“consumable et durable” elements of a product:

With a circular economy system,
the difference between both is made. The consumable parts will be made with
pure and nontoxic components in order to guarantee their return to earth. The
durable elements will be reused or improved to ensure their utilisation in the
most efficient way.

 

Rethink the consumer/user role:

Restoration is the key element
in a circular economy. By extension, the role of the consumer is replaced by
the role of the end-user. Meaning that when selling a product, companies have
to ensure the user will return it in order to reuse its materials. This system
implicates a change in the way companies interact with customers, as they will
have to build strategies/motivations which will ensure the materials’ return.

 

Product innovation
and process design:

 

Thinking new:

Innovative processes will be
required in order to create products easily reusable, with a simple disassembly
procedure, and sustainable and long-lasting, for maximum efficiency.

 

Implementing a circular economy
within a process means the end of the traditional product’s life cycle
beginning-middle-end. When original materials stop being used, companies will
have to adapt and find ways/processes to put them back into another useful
cycle. Options could be reuse (back to users), remanufacture (back to
manufacturing process), refurbish (back to the company/”maker”) or recycle
(back to processors).

 

The manufacturers will have to
design specifically for re-use, longevity and material recovery

 

 

Referring to the
above circular economy cases (or other cases published on the Ellen MacArthur
Foundation website) how does the re-manufacturing process change compared to
linear manufacturing?

 

The main differences when comparing a
linear and a circular economy lie in the step plan, the way sustainability
processes are applied and in the re-use practices. To summarize, in a linear
economy, the products are used until they are worn out, and they are then
considered as waste. In order to create value, companies maximize the
production and sale of products.

At the opposite, a circular economy is
based on an approach called the 3R: « Reduce, Reuse, Recycle ».

 

Renault

 

·     
At
Renault, they remanufacture diverse components such as automotive engines or
pumps, with the aim of re-selling them instead of wasting them.

 

·     
They
also reshape components to facilitate their disassembly. The goal is to create
new products from these materials.

 

·     
They
convert worn out materials to re-use them for new cars to reduce material
extraction as possible. Therefore, they retain value instead of only focusing
on maximizing it.

 

Ricoh

 

·     
At
Ricoh, they designed a special green line aiming at maximizing products
reusability and to save materials. The products come back to them and are then
refurbished. The components are replaced and the software updated.

à They therefore anticipate and
design the components in a way that will ensure they will be appropriately
reused, recycled, or refurbished. Which, contrary to the linear strategy,
enables them to save labour, energy, capital, to reduce waste and dependence on
new materials.

 

·     
Regarding
products that cannot be remanufactured, they are recycled, just like in a
linear economy. However, they are currently building a process which would
allow them to return some recycled materials to their Asian manufacturing
plants, to use them as brand new components. Unlike linear economy, this system
would enable them to save up to 30% of materials costs.

 

Which KPIs would
you propose for a remanufacturing operation?

 

Finance

 

New Component Cost
(NCC)

In my opinion, it is important to determine
the implied costs of components during the remanufacturing process in order to
prevent and to reduce them.

 

Process

 

Salvage Rate by
Product (SRP) and Salvage Rate by Component (SRC)

These KPIs consists of measuring the
percentage of reused components and could therefore help to have an overview of
which products are too costly, which ones are successfully remanufactured and
how the company can decrease its remanufacturing costs.

 

Core/Product Ratio
(CPR)

The goal with CPR would be to find an
average of the cores used for the production of a remanufactured product.

Thanks to this method, we could reduce the number of used core for an output.

In other words, the total amount of finished remanufactured products.

 

Innovation

 

Core Class Assessment
(CCA)

This KPI helps to assess the quality of the
core process. Thanks to it, we could ensure the proper sourcing of cores, as
well as a precise forecasting.

 

Environment

 

Material Used (MU) and Recycled Material Used (RMU)

As one of
the main purpose of the circular economy is to preserve the environment, it is essential
to know the total amount of materials used in remanufacturing, to then compare
it with the amount of RMU in the manufacturing process. This measure would
maximise efficiency and minimise costs and process’s waste.

 

In what ways can
improvements in technical materials contribute to building the circular economy?
Give three examples from the articles and/or from other sources

 

1)            
Renault

 

      Renault
redesigns its components to make them easy to disassemble. “Renault leases batteries
for electric cars, in large part to recover them more easily so they can be
reengineered or recycled for additional duty”. This technique involves the good
management of the stock of materials. Particularly for technical materials such
as plastics, metals, fossil fuels. Improving techniques of their utilization
(for instance making sure that the left parts are used to re-produce other
materials) contributes significantly to the circular economy as we are totally
focused on value retention.

 

2)    Nespresso

 

A few years ago, Nespresso rose
the question about how to recycle small metal packaging such as the company’s
capsules, if no industry to make it exist. Nespresso understood quickly that
the solution was to create a system itself. Therefore, with the support of
“Eco-Emballages” and other players in the “Aluminum and Steel Small Packaging
Club (Celaa)”, the company stated that electromagnetic induction fields,
already used in the sorting of large metallic elements, should be adapted to
small packages. As a consequence, local authorities, Celaa, Eco-Emballages and
others have joined the “Metal Project”, financially supported by Nespresso.

I think this is a good example of new
techniques supporting the framework of the circular economy. Indeed, Nespresso
and its supporters have been further than just thinking about “recycling big”;
they created a new cycle enabling to reprocess small packaging.

 

3)    IKEA

 

Indeed, the company is very involved and it
really encourages the circular economy.

They start by eco-designing their products.

Meaning that during the product development process, they make sure that the
end product will be easily re-used, disassembled, reassembled, and recycled. They
have 2 essential requirements: provide for the product’s recyclability at its
term, and the utilisation of reused or recycled materials in their manufacture.

Examples of products would be their “LISABO”
table, with solid wooden legs that can be very easily clipped, or the sprayer
“TOMAT”, made with 50% recycled plastic coming form their stores, preserving
60% of energy and avoiding 80% of C02 emissions.