What can enable business to go circular at scale?

Reimagining the way we live, work and do business

There is an enormous desire to change our economy to stop polluting our planet. Circular business models are widely recognized as the right direction of travel and will be mandated by fast approaching legislation.

So why isn’t it happening on the scale required?

What is preventing businesses from rolling this out beyond small-scale initiatives?

This quick-read provides a simple overview of the challenges of going circular and a strategy to overcome them, helping consumer product manufacturers pursue their circular ambitions.

Linear business models

Future proof business models are circular

Scaling Circularity

A circular ecosystem

Thechallenge

Circular principles must be considered across four levels of business.

Unlike other innovations, new circular solutions don’t automatically fit into the fabric of our value chains, organisations, economy or even our lives, as these are tightly knit to fit a linear system that benefitted decades of adoption and optimisation.

The only road to success is thinking through circular needs at each level.

Organising and partnering to reduce the impact of value chain and operationalise reverse logistics.

A circular business

Mapping the route to a desired circular business model addressing customer, financial and operational needs in various probable futures. Grow capabilities to operationalise a production process that has circular principles applied across and a (digital) infrastructure for circularity — tracking, reverse logistics, new ownership models and financial + legal implications.

Circular services & experiences

Creating services and experiences to engage customers to participate — maintain, repair, upgrade, share, return.

Circular products

Applying circular principles to products and packaging design with entire product lifecycle in mind — production, logistics, (re)use, return and regeneration.

Scaling Circularity

The four circularity strategies

And corresponding challenges

Talking to manufacturers across industries we see organisations approach their transition in 4 different ways, each with its own challenges

Reverse logistics first Particular challenges

Find ecosystem partners for setting up the reversed value chain or built and set up the internal capabilities. Set up to manage large variety of linearly produced products coming back Built decision-making capabilities to make impact trade offs: are refurbished/ updated old products better/worse than producing new product?

Circular product first

Circular service first

All-round effort

Particular challenges

Re-imagine & design product, production and product use Partner to set up the infrastructure for product tracking, reverse logistics and redistribution and underlying infrastructure (digital/legal/ accounting)

Particular challenges

(Re-)imagine & design a circular service — the desired customer experience, delivery and business model. Redesign the financial model and the way a business captures value, changing from a one-off sales transaction to recurring revenue (requires adapted accounting procedures and financial instruments)

Particular challenges

Manage multiple changes at the same timemaintain momentum and manage interdependencies whilst some parts move faster than others

Strategy agnostic challenges (1/2)

Bring customers along

Imagine and test circular offers

Internal or external set-up

Shared challenges for every business trying to scale circularity

Understand what customers need to buy into circular offers and make the behavioural change attached to that. Using product, operations and business model design to facilitating customers to take care of products and help closing the loop.

Understand which (small) steps from linear to circular can be made given the path dependencies of customer expectations, the organisational-, and value chain set-up. Test circular concepts' desirability, feasibility, viability and sustainability to understand the minimal viable set-up for circular success and de-risk roll-out.

Trade off: organise circular operation internally or outsource it (temporarily)? Depending on:

● Internal availability of capabilities

● Strength and availability of local partners

● Local legal requirements for repairing, refurbishing or recycling

Scaling Circularity