Circular Economy For Dummies Cheat Sheet

The circular economy is focused on eliminating waste, keeping products in use for longer periods, and allowing natural systems to regenerate themselves. Eliminating waste is a huge undertaking, because thousands of companies around the world and billions of citizens of the globe play a role in making it happen. Allowing natural systems to regenerate themselves is dependent on the reduction of the demand for raw material.

If people are effectively and efficiently using the materials they have harvested, there’s no need to keep going back for more. Keeping products in use for longer periods is where the consumer plays a big role. Let’s explore some opportunities:

• Share: Sharing is caring, right? Not only that but sharing also helps eliminate waste — both monetary and material waste. Think about how many products you have purchased and used only once or twice. Some items have a low rate of use — like tools that are needed only once and then sit in the garage for the rest of their useful lives. However, additional value can be created by sharing products — rather than storing them — when they’re not in use. Imagine, for example, that you have the ability to rent out your car (for cash) when you aren’t using it. Given that cars sit unused for over 90 percent of their useful lives, there’s a real opportunity to minimize the number of cars needed in the first place (material waste) and recuperate the money lost (monetary waste) in purchasing the car.
• Reuse: Why those flimsy, white, single-use plastic forks are still offered to the public should be considered the Eighth Wonder of the World. Although disposable products are sometimes critical for sanitation purposes — within the medical field, for example — more often than not, single-use products are avoidable and have been successfully sold under the false impression that they’re the cheaper in the long run. Though disposable utensils, bags, and packaging are often cheaper options in the short-term, they end up being the more costly option in the long run because of replacement and pollution-remediation costs. Reusable products don’t require new and raw materials to be harvested to make a replacement, and they don’t pollute the environment, because they’re not thrown out.
• Repair: Unlike earlier generations, current generations don’t prioritize the purchase of repairable products. Today, if something breaks, it gets tossed in the bin and replaced with the latest-and-greatest model. However, by purchasing products that are repairable, consumers can eliminate waste by preventing products from entering the landfill while also trading their large replacement costs with smaller maintenance-and-repair costs instead. Imagine if you threw out your car and bought a new one every time it needed a repair. Absurd, right? So, why treat your other belongings differently?
• Remanufacture: Many of the technical products in use today — such as cell phones, laptops, car engines and many others — are composed of hundreds of individual components. When the entire product stops working because only a single component malfunctioned, it would be extremely wasteful to dispose of the entire product. Instead, by simply remanufacturing the item and repairing or replacing the faulty component, the embodied energy and value of that technical product can live on, not only eliminating the need to build a new product out of raw materials but also saving the customer a lot of money in the end.
• Recycle: As waste is within a linear economy, recycling is within a circular economy: the last resort. Before a product is recycled, opportunities for sharing, reuse, repair, and remanufacturing should be explored. Why? Because, although recycling is an extremely important step to ensure that materials can serve another purpose at the end of their lives, the energy-intensive process of recycling typically results in a material or product of lower value than its original use.

The circular economy is driven by not only consumers but businesses, governments, and other institutions as well. Though it’s important to cover the ways the consumer can minimize waste, it’s also important to discover how those in charge of entire product lifecycles can transition from linear operations to circular operations.

Circular lifecycles (cradle-to-cradle) differ from linear lifecycles (cradle-to-grave) in the sense that once a product or material reaches the end of its useful life, infrastructure is in place to ensure that the product or material is able to be re-created into something new rather than something to be simply disposed of. Many steps are embedded within a product’s lifecycle, which makes it difficult to optimize in a circular manner — from material sourcing and manufacturing to shipment and the eventual disposal (or lack thereof).

Because it’s unlikely that you will be responsible for managing every step within a product’s lifecycle — unless you’re involved in some sort of cartel — then only one or two of these steps may be impacted by you. However, it’s important to know that even if you cannot directly impact all steps in a lifecycle, you can indirectly impact them.

Here’s how:

• What drives product design? This question acts as the first area of focus on your supply chain because it forces you to consider what is often dismissed: the other variables that contribute to the creation of a circular supply chain. What drives your product design should be driven by customer needs, the interaction between the product and the user (direct sale or lease?), the stakeholders involved (are wholesalers required?), the materials involved (and how many?), and the production, sale, delivery, repair, maintenance, and eventual recovery of your product. If all these factors are properly addressed, elimination of waste will be a natural outcome. So, what drives your design?
• What are the user’s needs? Initial cost isn’t the only variable. Product designs typically assume that low cost is the primary user need, and the durability and ease of maintenance of the product are dismissed. Although users do find competitive pricing attractive, it certainly isn’t the only variable in play. Consider the other user needs in play and how they can contribute to developing a circular supply chain. Will the user need to lease or purchase the product? Will the user need support in the repair or maintenance of the product after they’ve received it? Will the user have the option to sell your own product back to you or easily replace it after the product reaches its end-of-life? Consider how you optimize all these areas to benefit the user.
• Will the product be sold or leased? Determining whether you will sell or lease a product will greatly influence the product’s supply chain. If products have a high use rate — like a cell phone — it makes sense to design the supply chain with the intention of selling this product. If a product has a relatively low use rate — like an automobile, which on average spends 95 percent of its life in Park — it makes sense to design the supply chain with the intention of renting this product instead. Because one goal of the circular economy is to increase the usage of a product during its lifetime, by determining the use rate of a product, you can determine what the most attractive business/customer transaction might be and maximize the use rate of a single product before it reaches its end-of-life.
• Who are your partners? Identifying your partners isn’t important only for logistical reasons, such as who produces the packing in which the product will be delivered or even who is responsible for delivering the product to the user’s front door, but selecting the right partners determines your ability to optimize your supply chain. It’s extremely unlikely that you will be in control of the entire supply chain on which your product is dependent, which is why it’s important to identify the partners who are willing to work with you and adjust their services to meet your interests in eliminating waste, increasing the rate of use, or eliminating the need for raw materials. The best partners are the ones who are willing to improve their operations not only with you, but for you.
• Which materials are required? By first identifying which materials are required, you have the opportunity to make improvements when possible. Once all materials and areas of improvement are identified, four priority steps are involved in the optimization of those materials. First, phase out materials and substances that are harmful to the environment and humans. Only materials that have a net-neutral or net-positive impact on the environment and human health should be utilized within a circular economy framework. Second, utilize durable materials that allow for high levels of utilization. By relying on cheap materials that fail soon after they’re used, the value of durability is lost to the capture, recycling, and remanufacturing of that material. Third, when a material has reached the end of its life, it should be easily recyclable. This means that not only the material itself needs to be recyclable but also the other materials it’s paired with. Lastly, prioritize the use of renewable materials. Although finite materials are a critical component of the global economy, they cannot be generated and therefore should be considered a last resort.
• How will you produce your product? To allow for a circular supply chain to exist, products must be produced with reclaimed materials, not raw materials. If the product can’t be produced with reclaimed materials, it will forever depend on raw materials, and with no opportunity for recycling, the product will have no value at the end of its life. If some raw material is absolutely necessary, be sure that that it’s renewable rather than finite. Given that one goal of the circular economy is to provide the natural environment with the chance to regenerate itself, relying on harmful substances that hold the potential to pollute the natural environment is counterintuitive. Reconsider how the same product can be manufactured without the use of harmful substances. This may be successfully done via the generation of a new process or alternative material.
• How will users receive your product? In-store shopping allows you to physically review the item before you buy it, but online purchasing allows you to order from the comfort of your own home. Even products that were once considered too large to ship — like cars — are now considered shippable. Carvana, for example, lets a user select a car online and have it delivered right to their door. What’s next? Houses? Knowing that people are increasingly preferring the shipping route will shape other areas of your supply chain, like what partners you’ll need in order to deliver your product and in what state it will be delivered.
• How will you recapture your product at its end of life? All products still have innate value at the end of their lives, via their functionality or just their material content, and therefore there’s value in developing a supply chain that recaptures products at the end of their life and reincorporates those elements back into the system. If the product is beyond the point of being refurbished, there’s still innate value in the materials themselves. The biggest roadblock to reclaiming products at the end of their life is setting up a system that properly incentivizes users to return their products to the supply chain after the product is broken or they no longer want or need it. A potential solution is a buyback program that distributes payments to customers who return their previously purchased items. These items will then be repaired, as needed, and resold to future users. Items that aren’t resold will either be recycled or donated to local community projects. Reincorporating elements will require the repair of products and the recycling of materials — as a last resort — if elements of a product are beyond repair. Although recycling is a last resort and there is little value in recycling materials, the true value stems from the efforts made early on in the supply chain to increase durability and repairability of the product to begin with.