PLM and Circular Economy

Summary & Goals

The goal of the Circular Economy (CE) is simple: keep products and their component materials in use for a longer period of time before they are discarded or put into the trash. CE provides a vision that can inspire then motivate industries of all types to design and manufacture their products in smarter, far more sustainable ways. As a result, short-term living standards are not harmed by CE, as some may worry, but instead they are sustained for the long term due to reduced extraction of the planet’s finite resources with less impact on the environment.

The need for transitioning away from the current “Take, Make, and Dispose Linear Economy (LE),” which was based on thinking that evolved largely from the 17th century, has become ever more apparent in recent years. This is especially so given the projections of population growth where by 2030 the size of the global middle class will be double that of today.

Economists, scientists and politicians alike have failed to articulate a viable sustainable solution based on legacy LE thinking for how to meet the world’s ever-increasing demand for food, products, energy, mobility, and housing along with all the raw, processed, and manufactured materials required. Citing the Ellen MacArthur Foundation, the leading NGO that is advocating for a CE, “We need to rethink the system as we know it.”

The implementation of CE requires a focus on minimizing waste. However, absolute waste can´t be found in nature. The concept of waste is a human construct that runs counter to the innate efficiencies of natural ecosystems. As waste does not have value – though it does have externalized risks and costs – it should be avoided. This can be accomplished by applying business models that capitalize upon reuse, life extension, repurpose and remanufacturing products and materials back into a looping regenerative cycle again and again.

“We deplete natural capital to produce manufactured capital, and then we massively underutilize that same manufactured capital for which we have paid so dearly.” – Stuchtey et al. (2016).

Product Lifecycle Management strategies typically focus on improving multidisciplinary digital collaboration across the enterprise and value chain from the ideation stage of a product concept, through its engineering design, virtual prototyping, production, maintenance and finally end of life. PLM-enabling software solutions, when correctly implemented, can enable this strategy across individual departments and global-spanning business units. Thus, the foundation created by PLM has tremendous potential to be extended past original use and deployment of a product or asset to address the needs of a circular economy. Equally important is that PLM processes can be prepended to influence design decisions at the very front end to improve downstream disassembly, repairability, upgradeability, and reusability of a product or a complete system.

With that background, the PLM Green Global Alliance theme group on the Circular Economy, led by Hannes Lindfred, aims to gather knowledge, share examples, perform research, and discuss insights on the role, potential and value of PLM strategies and solutions in supporting the Circular Economy.  In doing so, we hope to help reverse these disturbing numbers cited by the McKinsey Center for Business and Environment and the Ellen MacArthur Foundation:

  • 80% of all consumer products in Europe ends up in landfill after one use cycle
  • 30% of all produced clothes are never sold, and another 30% leaves the store with a discount
  • Packaging accounts for 40% of all plastics used globally. Since most packaging is only used once, an estimated to 100 billion dollars is lost to the economy, yearly
  • 10-15% of all material becomes waste during the construction of a new building
  • 30% of all food is wasted throughout its value chain

Theme Moderator

Hannes Lindfred, Business Development Executive

hannes.lindfred@gmail.com

Focus & Objectives

As the Circular Economy is itself an innovation, it provides an opportunity to innovate business models and reimagine how we consider something to be a product, a service, or a product as a service. Similarly, a more circular way of thinking requires different expectations when it comes to Information Technology systems, including PLM, that support the enablement of these new business models and execution of their commercial strategies. Continue reading