Section 3.1: Business, the economy and sustainability
Section 3.2: Linear economy and the limits to linear consumption
Section 3.3: Changing business contexts and the imperative to act
Section 3.4: Closing the loop – towards a circular economy
Section 3.5: Circular economy in practice
3.5.1 Leakages from dispersed geographical distribution
Watch this video to learn how businesses can transition towards the circular economy of the future.
Closed loop production in practice
The concept and principles of a circular economy have been already been adapted and put into practice by various companies across the manufacturing landscape. Some of prominent examples are listed below
Ricoh
Ricoh manufactures printers and photocopiers, mostly to offices, in over 180 countries. Its GreenLine programme aims to minimize environmental impact of products for customers. Copiers and printers that returned from leasing are inspected, dismantled and its components undergo and extensive renewal and refurbishment process before being re-introduced under the GreenLine label with the same warranty scheme provided for new devices. The GreenLine programme increases customers’ options and the programme’s success is evident by its ability to keep pace with new equipment sales.
Michelin
Michelin pioneered the idea of leasing tyres under a pay-per-kilometer scheme as early as the 1920s. As of 2011, Michelin Fleet Solutions had 290’000 vehicles on contract in 23 countries, and offered tyre management services to optimize the performance of large truck fleets. Retaining control over the ownership of the tyres, Michelin has been able to recollect them at the end of their leases and extend their lifespans (retreading) as well as ensure their proper reintegration into the material cascade at the end of life.
Renault
Renault operates a dedicated re-manufacturing plant near Paris, where 17 different mechanical sub-assemblies including engines and water-pumps are re-engineered. The company collaborates with its distributor network to obtain used/non-functional sub-assemblies and supplements these with used parts directly purchased from end of life vehicle dis-assemblers. Renault’s ability to structure and run its reverse logistics chain gives it access to a steady stream of core resource materials which has allowed it to grow its re-manufacturing operations into a 200 million euro business
Coors
Bill Coors (founder) of Coors Brewing developed his company according to a “closed loop” production model that resembles a food web. The feedback loops of his model transmit environmental costs back to the company, encouraging them to develop methods to reduce waste and create new opportunities for profit through material reuse or re-creation. This has leveraged the business, a traditional industrial mass market brewing company into establishing its own diverse high technology spinoff – ACX Technologies. The profits of which are derived more from environmental re-design than outright consumption of resources
Leakage Points in a circular economy
A shift towards a circular business and economic models involves addressing the systemic leakages associated with global, fragmented materials and product flows. Leakages have different meanings for biological and technical inputs. Leakages of biomaterials represent a loss to maximize their use prior to decomposition, or the inability to reintroduce them into the biosphere due to contamination.
Technical production leakages represent losses of material, energy and labor within products, components and material resources that cannot be reused, refurbished, recycled or upcycled. These losses translate to increased resource, energy and labor costs for future production opportunities. Closing the economic production loop focuses primarily on technical product leakages.
Explore the links below for more information:
3.5.1 Leakages from dispersed geographical distribution
Corporate Sustainability Management 