More than 100 billion tons of resources enter the global economy every year, from metals, minerals and fossil fuels to organic materials from plants and animals.
The use of these resources has tripled since 1970 and could grow 70% by 2050 if businesses continue to use them at this rate. However, less than 9% of his total such resources are recycled and reused, contributing to the global waste problem.
This unsustainable rate of consumption has devastating effects on humans, wildlife and the planet. This growing waste will quickly get out of hand, and an expert believes he would need 1.7 planets to make consumption sustainable at current rates.
Abandon the “use once” mentality
More than ever, moving from a “use once and throw away” mindset to a circular economy that limits waste and pollution at the design stage, allows products and materials to last longer, and regenerates natural systems. is an urgent matter.
There is no endless supply of materials. For this reason, many companies are starting to turn to circular economy models and change the way they think about disposal. Every year, more companies adopt this platform and move to a circular economy system of production to become more sustainable and reduce long-term operating costs.
In a report entitled From Waste to Wealth, Accenture predicts that a shift to a circular economy model will add $4.5 trillion to economic output by 2030. This equates to 4-5% of the projected global Gross Domestic Product (GDP).
Changes to the linear supply chain model
Supply chains in the past were linear, with manufacturing facilities turning raw materials into finished goods that were often discarded after use.
Today’s supply chains are circular with the addition of links to create a closed loop system. This link includes returns and recycling, turning waste and returned goods into resalable products.
Reclaiming parts and materials from used products to make new products is not the same as sourcing virgin materials and new parts for manufacturing operations. Supply is subject to the availability of materials from waste streams, which can vary.
Establishing an efficient return channel for used goods is a major challenge, especially in the consumer market. Some businesses are looking at e-commerce return services as a convenient channel for collecting used products.
The future of the Product-as-a-Service model
A circular economy requires companies to rethink their business models to build value not only in manufacturing and commissioning products, but also in product disposal and recycling.
Participating in a circular economy requires companies to evaluate alternative revenue sources beyond producing new products, such as revenue generated from the value embedded in their products. A circular business model is only sustainable if the economically embedded value can be recovered from the product. Embedded value in products can be realized by reusing or recycling materials.
As a result of new product-as-a-service (PaaS) models, companies are investing in processes to extend product life, facilitate recycling, and provide consumers with incentives to return used products. Offering a product as a service is a shift away from a “buy and throw away” approach.
Working together to drive change
While the PaaS model drives innovation, returns and recycling can also be costly. Collaborative initiatives and innovative approaches are needed to reduce these costs and facilitate the return of used electronic products, which are already the fastest growing waste stream in the world. .
For example, over 1.5 billion cell phones are manufactured worldwide each year, but only 12% of these cell phones are recycled globally.
Innovative, automated systems that combine hardware and software can speed equipment grading. This is the process by which equipment is graded to enable resale, reuse, or low-grade recycling. These systems can not only increase device grading speed, but also improve cost efficiency and accuracy. These systems perform highly accurate and rapid appearance grading on returned and refurbished devices to help extend device life and improve the global waste problem.
Forward-looking companies recognize the value in a circular economy and are moving towards sustainable processes and products. It is imperative that businesses work towards adopting a circular economy to tackle the growing global waste problem. We can all make a world of difference and our new model will help us do that together.
About the author
Mark Wass is CloudBlue’s EMEA Strategic Sales Director. Mark is part of CloudBlue’s European leadership team, leading the Enterprise, Channel and New Business teams in EMEA. With over 17 years of experience in the IT infrastructure industry at SunnGard, Mark has seen the channels and his IoT industry change and adapt to what is today before moving to CloudBlue. As a result, he was able to provide key insights into the future of the industry and how IoT can transform businesses in different areas.
Featured Image: Adobe Stock
