Introduction to The Circular Economy

BESST: Back -2-Basics 2015

Andy Whyle

Ricoh UK Products Ltd

Worldwide sales of $23billion

(£14.6 billion) year end March 2012

No 1 Share of Global MFP Market

100,000+ Employees Worldwide

Market Leader since 1936

200+ Countries & Regions

Who are Ricoh?

Ricoh Global Manufacturing

■ Shanghai Ricoh Digital Equipment Co.,

Ltd.

■ Ricoh UK Products Ltd. (RPL) ■ Ricoh Industrie France S.A.S.

■ Ricoh Asia Industry (Shenzhen), Ltd. ■ Ricoh Manufacturing (Thailand), Ltd.

■ Ricoh Electronics, Inc

California & Georgia

U.S.A

UK

France

China

Thailand ■ Ricoh Components &

Products (Shenzhen) Co.,

Ltd.

■ Ricoh Japan

14 Production

Sites.

2010 20502000 2013 2020 2030 2040

100%

80%

60%

40%

20%

0%

TECHNO-CENTRIC

Technical

innovation effect

Ricoh’s long-term goals for

environmental impact reduction

ECO-CENTRIC

Encouraging all employees

to participate in

environmental activities

1/8

TECHNO-CENTRIC

Technical

innovation effect

2013 Goal

25% reduction

2010 Goal

20% reduction

2030 Goal

30% Reduction

2050 Goal

87.5% Reduction

Product Range

Site

Entrance

RPL

3

RPL

2

RPL

1

Cartridge Recycling

Colour toner

+ Moulding

Remanufactured

Copiers

Production Printers

Colour toner

+ Moulding

The Future -Resource Conservation

Ricoh Group's global

environmental conservation:

Keeping environmental impact

within the self-recovery

capabilities of the Earth

12

THE PERFECT STORM

2030

World's population

will rise from 6bn

to 8bn (33%)

Demand for food will

increase by 50%

Demand for energy will increase by

40%

Demand for water will

increase by 30%

Professor Sir John Beddington, UK

Government Chief Scientist (2009)

What’s the problem?

WHAT’S THE PROBLEM?

OECD Development Centre, Working Paper 285 (Kharas, 2010)gfh

2014

Resource Security - “Peakonomics”

Chris Martenson (Crash Course)

Jae Mather (Carbon Free Group)

Heed the warnings …….

Gold

Copper

Copper

Big Nuggets

Small Nuggets

Copper Ore Vein - 10%

Copper Ore Vein: 0.2%

Copper

Earth movers capacity = 255 tonnes

0.2% = 0.5 tonnes of copper per load

Business Opportunity?

Oil prices / mining capacity decreasing

1 Load = Equivalent to 3,400 donkeys

Future manufacturing impact?

Copper availability decreases

Copper price rises to unaffordable

manufacturing costs …….

No production / products ……

No Business Continuity .

Transition to a sustainable economy

Resilient to changing environmental conditions

Operates within environmental limits

Low carbon and resource efficient

IEMA – From Waste to Resources

Resources are the life blood of

manufacturing. Without a clear

view of supply risks and an active

and ambitious strategy to manage

those risks, businesses will be

increasingly vulnerable to price

volatility, supply chain

disruption and business

continuity risks.

Susanne Baker, AIEMA, EEF and Chair of

Materials Security Working Group Read

more about Susanne’s work at

www.iema.net/rm111

22/04/2015 16

The Circular Economy

COLLECTION

Extradition of

biochemical

feedstock2

Anaerobic

digestion

/composting

Biogas

Restoration

Biological

nutrients

Mining/materials

manufacturing

Technical nutrients

Farming

collection1

Biochemical

feedstock

COLLECTION

1. Hunting and fishing

2. Can take both post harvest & post consumer waste as an input

Source: Ellen MacArthur Foundation economy team

IEMA – From Waste to Resources report

22/04/2015 18

Ricoh Comet Circle

22/04/2015 19

RemanufacturingReducing Operational Impact

Ricoh Group's global

environmental conservation:

Keeping environmental impact

within the self-recovery

capabilities of the Earth

12

Manufacturing Today

The sustainable ideal is a balanced

3Ps approach

Most of today’s product tends towards

1st life/ single use (profit centric)

Sustainable design is increasing, but

not yet the mainstream

Paradigm Solution -

Robust reverse logistics

Life cycle (Comet Circle) drive

towards retention of assets

Ricoh’s role is to learn, and move

towards resource conservation.

Planet

People ProfitProfit

20502000

100%

80%

60%

40%

20%

0%

Ricoh’s 2050 Plan

Impact reduction

Virgin Fossil and

Mineral materials

Reuse of products

and parts

50%of incoming

materials

from

Recycled

or Reused

Land use(factory construction/

landscaping).

Collection/ Recycling

Water Timber

Crude Oil

(fuel)

Natural

GasCoal

Zinc Ore

Nickel Ore

Copper Ore

Molybdenum

Platinum

Chromium Ore

Manganese Ore

Silver

Ore

Bauxite

Lead

OreTin Ore

Crude Oil

(raw Material)

Silver

Ore

Gold Ore

Titanium

C O

(carbon Monoxide)

NOx

(Nitrogen Oxide)

SOx

(Sulphur Oxide)

CO2

(Carbon Dioxide)

N20

(Nitrous

Oxide)

CxHy

(hydro

Carbons)

CH4

(Methane)Dust

NMVOC

(Non-methane

Hydrocarbons)

Slag

Unspecified Solid Waste

Sludge

BOD

(Biological Oxygen

Demand)

COD

(Chemical Oxygen

Demand)SS

(suspended Solids)

Logistics/ Marketing

Procurement of raw materials

Use/ Maintenance

Input Output

Design/ Manufacturing

Continuous INPUT of resources to create products and OUTPUT of chemical substances, a linear relationship between these two are to be the basis of increasing the negative environmental impact on the

Earth.

In the future, if natural resources are to be depleted the we won’t be able to continue our normal business activities. We wonder if there is

a way to avoid running out of resources as opposed to such linear activities.

Extracted Resources for the business activities

such as

•Energy resource

•Mineral resource

•Renewable Resources

Substances that discharge in the

process of business activities.

Resource Security

Eco-Line products

UK Remanufactured

Products

TELFORD FACTORY

Ricoh Remanufacturing

Green centre

Firmware upgrades

Technical modifications

PRODUCTION LINE

COMPONENTS

Eco Line - Remanufacturing Process

Remanufactured machines (BS-MADE

8887-220)

Striped to chassis

All mortality parts replaced /All panels

sprayed

All firmware / software modifications fitted

Completely Re-branded and sold as new

line

Quality Control: inspected and assured the

same as new products

Extending the life cycle, reducing

environmental impact

Life Cycle Analysis

Raw material Manufacture Customer usageRecycle

& disposal

Remanufacturing = 38% Environmental impact reduction

Life Cycle: Comet Circle deployment

Customer

Operating

Company

Product

Manf.

Parts

Manf.

Materials

Manf.

Materials

Supplier

MaintenanceParts

Recovery

Materials

Recovery

Material

Separation

Raw material

recovery

Incineration with

Energy Recovery

Final

Disposal

Recovery

Secondary User of

Materials

Recycling

Centre

Green

Centre

Remanufacturing Zero Waste

Business Benefits

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Asset Remanufacturing of Ferrite Rollers

Product /

Process

Apolon C1 Fuser

How

Much

200 units per month

Business

Benefit

Saving compared to manufacturing new

= £13/Roller

Comment

s

First stage of Remanufacturing

development, development and

justification of the process was

challenging, but ultimately developed a

low skill cost effective process

requirement.

+ Comet

Shifts

2

Business Benefits

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Asset Jupiter OPC unit

Product /

Process

Remanufacture of unit including reuse

of aluminium drum and weight (rather

than recycling).

How

Much

7000 drums saved over 1 years

production.

Business

Benefit

Savings compared to buying new units

= £61,000

Comment

s

extension and development of the

Ferrite roller process

+ Comet

Shifts

2

Business Benefits

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Asset Supplies Remanufacturing Department

Product /

Process

European wide sourced Toner cartridge

Remanufacturing of AIO / PCU / Fuser units

How Much reverse logistics return 55tonnes / month. 52

tonnes are remanufactured (Process yield is

95%, with 5% sent for recycling).

Business

Benefit

Based on the avg selling cost within the

Ricoh demand chain the process is worth

€11 million per month, the direct benefit to

the manufacturing process compared to

buying virgin materials and parts is €2

million per month.

Comments Now established as part of European

manufacturing operations

+ Comet

Shifts

3

Business Benefits

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Asset Machines Remanufacturing

Product /

Process

Remanufacturing of copiers and production

printers following BS887-2

How Much 160 units per month

Business

Benefit

40% cost savings compared to new models,

reducing environmental impact by 38%

Comments Established as part of RPL manufacturing

operations

+ Comet

Shifts

3

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Caterpillar estimate that 35% of their costs

lie in overheads, while the majority – 65%

– are materials costs. So salvaging

materials gives a greater business

advantage for the company over their

competitors, where goals are often focused

on driving down overhead costs.

Michelin Fleet Solutions, offering tyre

management to optimise the performance of

large truck fleets— in Europe, 50% of large

truck fleets externalise their tyre

management. By maintaining control over the

tyres throughout their usage period, Michelin

is able to collect them at end of the leases

and extend their technical life (i.e. re-

treading) and reintegration into the material

cascade at end of life.From Selling Tires

to Selling Kilometres

Resource Conservation

34

Renault’s ability to structure and run its

reverse logistics chain and access a

steady stream of cores, together with its

deployment of highly skilled labour, has

allowed the company to grow its

remanufacturing operations into a 200

million euro business.

Resource Conservation

Kingfisher

• Researching, developing and

implementing circular business model

trials

• Delivering Kingfisher’s Net Positive

objective of selling 1000 products with

closed loop credentials by 2020

• Creating a strong network of suppliers

who are aligned around the need to

transition to a circular economy

Summary

Strategy: to develop business to maintain materials for productivity

Develop a long term approach (2050 Plan)

Zero Waste underpins Remanufacturing

Increasing Supply Chain awareness of Reverse Logistics

Circular Economy deployment

Diversification of operation (remanufacturing)

Result:

Manufacturers and Customers now beginning to grasp Resource

Conservation as a strategic issue.

Reduced environmental impact of operation, extended life cycle of

materials, resulting in an increased ability to maintain future business

continuity (Sustainability).