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Copyright © 2015 Accenture All rights reserved.
Example companies studied
2
Accenture and WEF YGL have studied 120 successful circular pioneers
5 business
models
10 enabling
technologies
5 capability
shifts
50 executive
interviews
120 case
studies
Accenture research show there are five circular business models to consider
The Circular Economy options
Recovery &
Recycling
Circular
Supply-Chain
Product as a
Service
Product Life-
Extension
Sharing
Platform
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Three types of technologies are key
4
Digital
Enabling entirely new ways
to access and understand
product use-phase and aid
customers in use efficiency
Hybrid
Enabling moving physical
objects back and forth from
value chains with digital
services to drive down cost
Engineering
Enabling production and
supply of new types of
resources as well as new
product designs to use
them
Advanced recycling tech
Modular design technology
Life & Material sciences
Circular economy enabling technologies
Source: Circular Economy book project
Three types of technologies are key
6
Digital
Enabling entirely new ways
to access and understand
product use-phase and aid
customers in use efficiency
Hybrid
Enabling moving physical
objects back and forth from
value chains with digital
services to drive down cost
Engineering
Enabling production and
supply of new types of
resources as well as new
product designs to use
them
3D Printing
Advanced recycling tech
Trace and return systems
Modular design technology
Life & Material sciences
Circular economy enabling technologies
Source: Circular Economy book project
Three types of technologies are key
10
Digital
Enabling entirely new ways
to access and understand
product use-phase and aid
customers in use efficiency
Hybrid
Enabling moving physical
objects back and forth from
value chains with digital
services to drive down cost
Engineering
Enabling production and
supply of new types of
resources as well as new
product designs to use
them
Social
Mobile
M2M Communication
Cloud
Analytics
3D Printing
Advanced recycling tech
Trace and return systems
Modular design technology
Life & Material sciences
Circular economy enabling technologies
Source: Circular Economy book project
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Poshmark combines all digital technologies and realized a personalized and active secondhand clothing market
Copyright © 2015 Accenture All rights reserved.
The five major shifts in business capabilities cover all components of the business operations
5 Circular economy capability shifts
1. Strategy From focus only on core business to manage complex & collaborative networks
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Copyright © 2015 Accenture All rights reserved. 13
1. Capability shift in Strategy
From focus only on core business to manage complex and collaborative networks
Copyright © 2015 Accenture All rights reserved.
The five major shifts in business capabilities cover all components of the business operations
5 Circular economy capability shifts
2. Innovation & product development From designing for single use to designing for many life cycles and users
1. Strategy From focus only on core business to manage complex & collaborative networks
14
Copyright © 2015 Accenture All rights reserved. 15
2. Capability shift in Innovation & Product Development
From designing for single use to designing for many life cycles and users
Design for • Longevity • Leasing or Service • Reusability • Material recovery
Copyright © 2015 Accenture All rights reserved.
The five major shifts in business capabilities cover all components of the business operations
5 Circular economy capability shifts
2. Innovation & product development From designing for single use to designing for many life cycles and users
3. Sourcing and manufacturing From homogenous supply chain to heterogeneous resource flow innovation and cascading
1. Strategy From focus only on core business to manage complex & collaborative networks
Copyright © 2015 Accenture All rights reserved. 17
3. Capability shift in Sourcing and Manufacturing
From homogenous supply chain to heterogeneous resource flow innovation and cascading
Copyright © 2015 Accenture All rights reserved.
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3. Capability shift in Sourcing and Manufacturing
General Motors is applying the Reduce, Reuse, Recycle principle and created 102 landfill-free facilities in the USA. Most materials are reused or recycled onsite and the materials unsuitable for this purpose are converted into energy.
$1B annual benefit through recycling efforts
From homogenous supply chain to heterogeneous resource flow innovation and cascading
Copyright © 2015 Accenture All rights reserved.
The five major shifts in business capabilities cover all components of the business operations
5 Circular economy capability shifts
2. Innovation & product development From designing for single use to designing for many life cycles and users
4. Sales & product use From never seeing your product again to customer and asset life cycle management
3. Sourcing and manufacturing From homogenous supply chain to heterogeneous resource flow innovation and cascading
1. Strategy From focus only on core business to manage complex & collaborative networks
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Copyright © 2015 Accenture All rights reserved.
4. Capability shift in Sales and Product Use
From never seeing your product again to customer and asset life cycle management
SKF developed advanced services for maintaining, monitoring, repairing and optimizing its customers’ assets, thus, helping customers maximize productivity while minimizing total cost of ownership of machinery.
$3,5bn net sales is generated from the asset efficiency optimization offer (40% of total revenue)
Refurbishing, certifying and reselling of Kindles (e-readers) at a reduced price to customers. Amazon makes a profit on the e-books sold not on the Kindles so reducing costs of the e-reader is profitable.
Substantial lower costs in providing Kindles to customers
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Copyright © 2015 Accenture All rights reserved.
The five major shifts in business capabilities cover all components of the business operations
5 Circular economy capability shifts
2. Innovation & product development From designing for single use to designing for many life cycles and users
4. Sales & product use From never seeing your product again to customer and asset life cycle management
3. Sourcing and manufacturing From homogenous supply chain to heterogeneous resource flow innovation and cascading
5. Return chains From compliance to opportunity driven take-back
1. Strategy From focus only on core business to manage complex & collaborative networks
21
Copyright © 2015 Accenture All rights reserved.
5. Capability shift in Return Chains
From compliance to opportunity driven take-back
The networking equipment company established nine different reverse logistics programs. 25% of all returned products are refurbished, reused or resold at 80% of the new price.
More than $360 million of reused equipment
Encouraging customers to participate in return chains by awarding customers with credits when recycling, reducing and choosing consciously. Credits can be used to get a discount at multiple businesses.
Sustainability becomes a priority and awareness is created.
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Copyright © 2015 Accenture All rights reserved.
1. Identifying and concentrating on the actual opportunity
2. Rethinking how value is created and delivered to customers
3. Putting in place a focused set of new capabilities (and not trying to implement
the ‘perfect’ circular setup, at least not initially)
4. Investing in technology to make value chains circular
5. Timing the balance between capturing near-term, low-hanging fruit and
engendering long-term, large scale change
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Right, but how to get started?
Copyright © 2015 Accenture All rights reserved. 24
Along the way of business transformation, governments play an essential role in facilitating the transition towards a circular economy
www.govsgocircular.com
Copyright © 2015 Accenture All rights reserved. 25
For inspiration: The Circulars & Accenture Innovation Awards
thecirculars.org
innovation-awards.nl
Copyright © 2015 Accenture All rights reserved.
More information
Joost Brinkman
Lead Sustainable Services Benelux
@JoostBrinkman
Or google “Circular Advantage”
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Jakob Rutqvist Global Lead Circular Economy [email protected] @JakobRutqvist >