Would you like to reduce waste and make your company more environmentally friendly and possibly increase sales in the process?
If that sounds appealing, now is a good time to take action.
Instead of continuing the waste of the current production cycle of making, using and throwing goods, join a forward-thinking group of UK manufacturers who are realizing the benefits of a more circular product lifecycle.
This shift in focus is aimed at reducing waste and reusing materials and is known as the circular economy.
You are at the height of the wave and if you focus your product life cycle on predictive maintenance, recycling, remanufacturing and remanufacturing, you will get financial benefits in the long run, including:
- New sources of income for “officially refurbished” used products
- Efficiency savings and reduction of expenses for constantly increasing resource costs
- Increased market share through a “green” brand image.
So what should you be doing to implement it and what common pitfalls should you avoid? Here are seven tips to get you started.
1. Build a solid business model for a circular economy
Reducing your company’s carbon footprint is a worthy goal in itself. Realistically, however, you need to show the board some solid numbers if you want your circular economy implementation to be a priority.
Just like any type of organizational change, an enthusiastic buy-in will make all the difference when everyone else comes on board. Your business case is the first step in making this happen.
It is of course worth taking your time here.
Go into detail on the benefits of the circular economy and provide some realistic numbers to support your claims.
Take the three areas listed above (new revenue streams, efficiency savings, higher market share) as a starting point and drill down from there.
2. Avoid overdoing too soon
The benefits that the circular economy brings to manufacturers are tempting, and now it’s time to move on that front – climate issues have never weighed so heavily on people, and this is your opportunity to make a real difference.
Still, don’t be tempted to rush.
Better to have a gradual, well-designed implementation with long-term results than go all out and not get the impact it needs.
The key to success lies in embedding manageable changes in your company’s routine. For example, start by setting up a refurbishment program to repair and resell used products.
Once you’ve trained your staff, successfully launched the program, and received good feedback from customers, move on to the next phase.
No action is too small, so don’t be afraid to build up gradually. Even if your first step is as simple as making all of your packaging recyclable, this is a solid start. Everything adds up.
3. Keep everyone in the loop
Think how each stage of your circular economy implementation would affect your wider workforce. If the burden seems too great in too short a time, reconsider your plan and consider their concerns.
This is a very easy problem to deal with.
Your co-workers are an instant message away at best. All you have to do is ask them for help and most of the time they will be happy to commit.
In practice, you might want to put together a representative product team. Implementing a circular economy is a transformation that affects every single department in your company. So make sure everyone is on the same page and ready to work with you.
Your sales team needs to rethink how they sell your products. Your supply chain must adapt to new patterns of supply and returns. The amount and type of materials you need may need to change.
And that’s just the tip of the iceberg.
Instead of guessing the potentially challenging adjustments people will need to make to solve these problems, let them tell you about themselves.
By including representatives of all important stakeholders in your project team, you increase the efficiency of the implementation, win the buy-in of employees on site and ultimately realize more of the advantages mentioned above.
The perfect circular economy implementation team will vary from organization to organization, but your basic list of internal stakeholders should look something like this:
- Supply chain and logistics: If you are switching to a buy-return-service-send model, you need to make sure your supply chain is aligned with it before making the switch.
- Procurement: The way you source your materials and parts may need to change as you look for less wasteful alternatives.
- Sales and Marketing: They move away from the assumption that after a certain amount of time a product will be out of date and that your customers will have to buy a new one. This may not fit your current sales cycle or campaign strategy. You must therefore allow time for the adjustment.
- Manufacturing / workshop: The way you handle orders changes when you implement a circular economy. Your factory needs to figure out how to make this change while meeting the requirements on time.
- Finances: A circular economy changes how and when the company generates income.
- IT: Do you have to make software purchases or infrastructure changes? If you involve your IT experts early on, you can avoid problems later.
- Engineering / product design: A successful circular economy depends on how your products are designed. Your engineers or your product design team are your number one ally here.
4. Check that your supply chain is up to date
At the moment the main focus of your logistics activity as a discrete manufacturer is likely to be “parts and raw materials in, complete products out”.
This will change if you want to integrate remanufacturing, leasing, asset management and incentive return into your business model as these products have to come back down the supply chain for reuse or repair.
Your supply chain is the life or death of these services.
If everything goes smoothly for your customers, they keep coming back. When things are lost, damaged, or delayed, it is harder to persuade them to come back and you can lose them to competitors.
This means that a reliable, watertight supply chain should be a top priority when implementing a circular economy. Before starting new services, make sure you can answer the following:
- What kind of movement of goods do these new services need?
- Do you have enough driver capacity to provide the promised service?
- Will the demand for these services increase over time and how are you going to achieve that?
- What kind of training do your drivers and supply chain operators need to get used to new ways of working?
5. Can your current systems hack it?
You need the right tools for the job. Trying to implement a circular economy with an old IT structure will, at best, produce lukewarm results.
So, if you haven’t looked at your current technology in a while, it might be a good time to do a thorough review.
Your workforce will have to make fundamental changes to how they work when you implement a circular economy. Trying to use systems that are not up to the job will slow you down.
Imagine an enterprise management solution that can meet the needs of implementing a new variety of services and provide the functionality you need for a circular economy.
To get the ball rolling, examine:
- Automation and AI: Reduce the likelihood of human error from an increasing number of manufacturing processes, reduce waste, and complete jobs faster.
- 3d printing: 3D printing is definitely a great choice for quickly producing cheap replacement parts.
- The Internet of Things: When you connect your products to the Internet, you can receive real-time data on their performance and predict when they should be sent in for service. You can also use the IoT to speed up daily operations (e.g. smart lenses for warehouse keepers).
Buying software can prolong your implementation in the circular economy, but keep in mind that you are in for the long run. It’s better to invest the time and money in laying solid foundations on which your business can thrive.
6. Be the Circular Economy’s greatest cheerleader
Nobody will be delighted with your circular economy implementation if you aren’t.
Believe in your vision more than anyone else. Do drop-ins so coworkers can ask questions. Celebrate new services with internal launch events. Treat your team when they have met important goals or deadlines.
In short, do whatever you can to make the difference a circular economy would make for your business.
7. Tell the world about the changes you are making
A circular economy not only generates additional income and saves costs, but also offers you a significant incentive for increasingly environmentally conscious consumers.
You can already see the effects of this demand.
For example, more and more companies are using recyclable plastic packaging for online deliveries. While filming is there, the circular economy has not yet entered the phase of mass adoption.
This means that if you choose to implement a circular economy, you are ahead of the curve. It’s a major selling point for you. So make it a focal point of the public’s perception of who you are and what you do as an organization.
Get your marketing team involved. Encourage your leaders to speak about this at conferences and public events. Never miss the opportunity to let everyone know what you are working towards.
After all, you are overseeing an incredible transformation. Let the world celebrate with you.
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