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Procedia CIRP 00 (2017) 000–000www.elsevier.com/locate/procedia
2212-8271 © 2017 The Authors. Published by Elsevier B.V.
Peer-review under responsibility of the scientific committee of the 24th CIRP Conference on Life Cycle Engineering.
The 24th CIRP Conference on Life Cycle Engineering
Product life cycle planning for sustainable manufacturing: Translating
theory into business opportunities
W. Haanstra
a*, M.E.Toxopeus
a, M.R.van Gerrevink
baUniversity of Twente, Faculty of Engineering Technology, P.O. Box 217, 7500 AE, Enschede, The Netherlands bVan Gerrevink BV, P.O.box 520, NL-7300 AM, Apeldoorn, The Netherlands
* Corresponding author. Tel.: +31-53 489 4516; E-mail address: m.e.toxopeus@utwente.nl
Abstract
Implementing sustainability principles of the circular economy and associated transitions tend to transcend the boundaries of individual businesses. This calls for a shift in traditional sustainability thinking by transitioning from business-oriented sub-optimisation to collaborative value chain optimisation. This paper proposes a framework to support companies in this transition by visualising the different relations in a morphological matrix to encourage the selection of the most appropriate principles for the specific industry context. The framework is evaluated in an industrial case with multiple stakeholders resulting in a feasible closed material loop.
© 2017 The Authors. Published by Elsevier B.V.
Peer-review under responsibility of the scientific committee of the 24th CIRP Conference on Life Cycle Engineering. Keywords: sustainable business models; life cycle development; circular economy
1. Introduction
The circular economy [1] is an emerging paradigm in the field of sustainable development that has attracted the attention of governments and organizations across the world. Fueled by success stories, it is widely regarded as a promising concept to allow for more sustainable economic development in a changing socio-economic landscape which faces resource scarcity. The interpretation of the Ellen MacArthur Foundation has become the de facto standard regarding this subject over the last few years.
However, it appears that industry has not yet widely implemented the principles of the circular economy for sustainable manufacturing [2]. Therefor this paper proposes a framework to support implementation of these principles for identification of business opportunities in specific industry contexts.
The relevant principles of the circular economy are discussed in section 2. In section 3 it is argued that the implementation of the principles of the circular economy in industry is complex due to multidimensional aspects of the problem. This leads to the proposition of a framework to
support industry in their transition towards a circular economy in section 4. To illustrate the application of the proposed framework, an industry case study is described in section 5. This paper closes with reflection and conclusions in section 6.
2. Circular economy
The main concept of the circular economy, the principle of regenerative design, can be traced back to Stahel [3]. More recently, the Cradle to Cradle philosophy of Braungart and McDonough [4] and the Ellen MacArhur Foundation are commonly identified as the driving forces behind the circular economy:
‘Circular economy is a global economic model that decouples economic growth and development from the consumption of finite resources. It distinguishes between and separates technical and biological materials, keeping them at their highest value at all times. It focuses on effective design and use of materials to optimize their flow and maintain or increase technical and natural resource stocks. Provides new opportunities for innovation across fields such as product design, service and business models, food, farming, biological
Fig. 1. The Circular Economy ‘butterfly’ diagram (modified from [1]).
feedstocks and products. It establishes a framework and building blocks for a resilient system able to work in the longer term.’[1]
The circular economy can therefore be interpreted as a collection of multiple complementary principles. The appropriate selection and application of these principles strongly depend on the problem context. In order to identify the most appropriate match, the circular economy is rationalized by dividing into its elemental principles. These principles can be used as business development tools in the framework described in section 4.
2.1. Closing material loops
In the principle of closing material loops, two distinct cycles can be identified: A biological and a technical cycle, both of which should be regenerative in nature. When combined, they form the basis of the traditional circular economy interpretation, which is emphasised in the commonly used butterfly diagram (Fig. 1).
The biological cycle closes through the earth’s ecosystems and uses biological waste as nutrients to sustain itself. Because ‘waste equals food’ in the biological cycle, any material losses (i.e. through degradation, the use of consumables or discarded products) are allowed, as long as they are metabolised by the planet’s ecosystems.
The technical cycle consists of technical materials that cannot be metabolised through biological ecosystems. It consists of technical, often artificial materials. A closed technical cycle requires recovery and recycling of these materials to avoid leakage from the technical cycle into biological ecosystems, which results in resource loss and potential adverse environmental impact. Unlike the biological cycle, a completely closed technical loop does not allow for any leakages.
2.2. Functional life extension
In the circular economy, the metabolistic cycles apply primarily to materials, whereas consumers are mostly
interested in physical products. In a product lifecycle, these materials are accumulated during production and will continue their respective cycles at the end-of-life. From a resource perspective, a product can therefore be seen as a collection of materials which are temporarily retained in their respective cycles. When a product’s life is extended, the resource efficiency for functionality increases, i.e. less material is required for the same amount of function. This efficiency improvement can be achieved by increasing the functional life of systems, products, and components through maintenance, repair, reuse, refurbishment and remanufacturing efforts.
2.3. Cascading
A hypothetical ‘perfectly circular’ product, cycles the same amount of resources indefinitely in order to keep fulfilling its function. In practice however, indefinite cycling of resources is impossible due to material degradation mechanisms or the imperfect nature of material separation and reclamation during recycling. At a product’s end-of-life, its materials are usually of diminished quality and restoration of original material properties is often infeasible. In cascading, resources that cannot be reasonably recovered for direct reuse are reutilised, but for another, often less demanding purpose. The cascading principle can be seen as a form of repurposed reuse with a focus on resource value maximisation and loss avoidance. It is one of the main principles surrounding the Blue Economy [5]. Examples of symbiotic cascades can be found in industrial sites where neighbouring plants utilise each other’s by-products as resources instead of discarding them.
2.4. Renewable energy use
Energy is required throughout the lifecycles of many products. Consumption of energy may have an adverse effect on resource depletion or on the environment, depending on the source and delivery method. Energy sources that are replenished over human timescales are considered to be renewable. The use of renewable energy avoids the consumption of depletable resources such as fossil fuels. Even though renewable energy is considered to be inherently non-depletable, these sources remain limited with regard to their local and temporal availability (e.g. wind and solar energy performance are dependent on the prevailing weather conditions). Furthermore, emissions that result from the consumption of renewable energy may still have an adverse impact on the environment, e.g. the combustion of biofuels may still cause harmful emissions into the atmosphere.
2.5. Performance economy
For certain products, end-users may not be interested in ownership, but in access to functionality [6]. This insight encourages a transition from the development of physical goods to the creation of product service systems [7] and the shift from product ownership to utility based business models. Functional abstraction [8] can be used to identify a product’s functionality and demand fulfilment on different levels of
abstraction, which can be beneficial in the identification of opportunities for the creation of product service systems.
An economy that is not defined by product sales but demand fulfilment is often called a performance economy. By focussing on product access instead of ownership, consumers can expect a lower cost for market entry. Companies may find new roles and niches in emerging business opportunities that are accompanied by new economic models [9]. Additionally, product service systems can also be used to maintain control over the product lifecycle through ownership rights or contractual obligations which can be beneficial in governing material loops or creating incentives for functional life extension.
3. Problem statement
The circular economy offers a response to sustainability issues such as resource scarcity. The intention of sustainable development is commonplace in corporate social responsibility statements of many businesses. Even though this goal can be easily formulated, e.g. in the definition of the Brundtland commission [10], its fulfilment often remains undetermined as sustainability is difficult to measure. For example, how can sustainability be quantified when it needs to account for an entire range of environmental, resource related and social concerns? Even focusing on just the environmental aspects requires subjective and context dependent weighing factors to combine the different effects. Regarding social aspects, a consensus to methodologically determine the impact seems to be lacking. This inherent ambiguity makes sustainability hard to quantify, especially when multiple aspects, such as the triple bottom line of people, planet and profits [11] are taken into account simultaneously.
Secondly, the practical implementation of sustainable developments can be a complex challenge. Although the theory of circular economy promises many evident opportunities for a more sustainable world, its practical implementation in industry may not always be straightforward. The initial state of the problem is often unclear as the starting point for business
development often requires an inventory of multidimensional and pan-organizational aspects. Industrial situations tend to be complex due to extended stakeholder networks [12]. Closing loops for even single products is complicated by the multitude of components, parts and materials, each with their own, often different, lifespans and – cycles. Not to mention that extensive product portfolios are likely to further increase complexity. As the scopes of lifecycles are broadened and more complex aspects are taken into account, the problem of sustainable development becomes increasingly irreducible.
Finally, it is difficult to describe how the transition from a linear to a more circular economy should take place [2]. Even if it is possible from a theoretical viewpoint, for individual companies it comprises a complicated problem. For a company, it is close to impossible to become circular on its own. Other companies and stakeholders will always be involved, either by supporting the transition or by impeding the process due to opposing interests. In common ‘linearly’
oriented business models, companies tend to consider themselves at the center of a product lifecycle or value chain.
These three aspects; the ambiguous nature of sustainability, the complexity of sustainable development and the paradigm shift that is required for a transition towards a circular economy, form a multidimensional and complex challenge.
Traditionally sustainability improvements were more focused on benefits for the company than on the product lifecycle. A paradigm shift is necessary that places the product lifecycle at the center instead of individual companies. This paradigm shift shows parallels with the introduction of the Helionistic model proposed by Copernicus in the 16th century,
stating that the earth was not the center of the solar system but to just one of the planets circling the sun, as illustrated by fig 2.
Fig. 2. Paradigm shift towards life cycle engineering.
Similar aspects were acknowledged by Jeswiet [13] in his definition of life cycle engineering: ‘LCE are engineering activities which include the application of technological and scientific principles to manufacturing products with the goal of protecting the environment, conserving resources, encouraging economic progress, keeping in mind social concerns, and the need for sustainability, while optimizing the product life cycle and minimizing pollution and waste.’ Umeda et al. mention life cycle planning as a systematic and strategic method to concurrently design and plan for entire product life cycles [14]. After discussing several methods, tools and case studies regarding this topic, Umeda acknowledges the issue of clarifying the relationship between the life cycle strategy (product concept, life cycle option & business option) and external factors in the product life cycle.
The application of life cycle engineering and planning seems like a logical and promising approach to bridge the apparent gap between the current limitations of the circular
economy and the need for a pragmatic approach to sustainable development. Combining the circular economy with the field of life cycle engineering can result in a pragmatic framework that supports practical sustainable development through product life cycle planning.
4. Framework
In order to support the matching and implementation of sustainability principles with different stages in the product lifecycle, a framework is proposed. This framework is based on the combination of morphological analysis and the design metaphor of the ‘problem space’ to provide a backbone for the implementation of circular principles and sustainable business development in industry-specific contexts.
4.1. General Morphological Analysis
General Morphological Analysis (GMA) [15] is proposed as methodology to support the framework. The morphological approach is useful for the study of all relevant interrelations among objects, phenomena, and concepts. It can be used in exploring all the possible solutions to a multi-dimensional complex problem [16]. Ritchey identified three interrelated factors for which GMA is useful: (1) One or more problem factors are non-quantifiable. (2) The problem complexes are in principle non-reducible. And (3) the process of going from the initial problem formulation to a solution is difficult to describe or document. These three factors concur with the aspects indicated in the problem statement (section 3).
Instead of dividing a problem into manageable smaller elements, GMA works backwards from the entire range of possibilities to allow for all possible solutions. Morphological diagrams are usually represented as a matrix consisting of multiple axes.
4.2. Problem space
A morphological matrix can be used to describe a problem space, or inversely a solution space, i.e. a design analogy for the entire range of possible solutions that exist within the boundaries of a set of given restrictions. It is a metaphoric space in which the problem solver represents the states of the problem, from an initial state through intermediate states to a goal state [17]. According to Goldschmidt, problem spaces apply to ill structured problems, where the route to the goal state must be discovered, while the goal itself is not entirely clear. This corresponds with Ritchey’s third factor for which the morphological approach is useful as well as the nature of the implementation of circular principles in industry-specific contexts (as discussed in section 3).
4.3. Morphological matrix
In order to invoke the correct interpretation, the variables on the axes of the morphological matrix must be matched with the general context of sustainable business development, as acknowledged by Umeda [14]. In figure 3 the horizontal axis
covers a range of possible stages that can occur in a circular product lifecycle.
Organizational aspects of business development are divided in three main categories. The value chain & network category in circular product development consist of different stakeholders, technologies, know-how and human resources required for practical realization of development. The category of design & realization encompasses the creation of conceptual ideas and the consequent actualization of the resulting designs, taking into account the practical feasibility of manufacturing. Business & strategy is required for successful LCE solutions, strategic and economic viability and the mitigation of risks associated with business model transitions.
These three organizational categories of business development are placed on the vertical axis in conjunction with three sustainability categories (in accordance with the LCE definition by Jeswiet, see section 3): Social Concerns, Environmental Impact and Resource Availability. The resulting morphological matrix serves as an inference model which represents the problem space of sustainable business development, as depicted in figure 3.
Fig. 3. Morphological matrix for circular development.
Each square on the matrix represents a relation between two intersecting aspects of circular development. Additionally, inference occurs along both axes, across either the product lifecycle or business development activities and their associated sustainability impacts. For each inference point, the nature of the relation depends on the problem state of the subject of study.
4.4. Application
The matrix allows for the implementation of circular principles (as discussed in section 2) to consider solutions to problems that occur at the morphological intersections or across the solution space of the problem context. The visualization of different relations in a morphological matrix encourages the selection of the most appropriate principle to initiate a transition towards a circular solution. Value chain analysis provides insight into the supply chain and which stakeholders are crucial for developing new business models and collaboration. To assess the current product lifecycle and potential future developments, the Life Cycle Assessment
(LCA) approach, already suitable for the environmental impact, should be enhanced with generally accepted methods to simultaneously determine the associated social and financial impacts.
5. Case study
To apply the proposed framework in a practical industry situation, a case study was initiated [18]. Two companies were curious about the possibilities of the circular economy and participated in the case study. The first company develops and manufactures domestic boilers, primarily for the West European market. The other company is a local recycler situated in proximity to the boiler manufacturer. Both parties already cooperate on collecting and recycling manufacturing waste. In a joint effort in this case study, the application of the principles of the circular economy would allow for a unique opportunity for a close collaboration with leverage on two ends of the value chain.
Within the case study, the focus was on a typical gas burning domestic condensing combined boiler for the Dutch market. The boiler is used to supply both central heating and potable hot water. The general lifespan of such boilers is approximately 15 years, with a thermal output between 28 kW and 40 kW. Manufacturing of boiler components is outsourced, while assembly is done at the main production location in the middle region of the Netherlands. The finished products are sold through wholesale channels to housing associations and commercial installation companies. There is no direct sale from producer to customers. During the 15 years of use, the boilers are regularly maintained by installation companies. It is not uncommon that during the lifespan of the boiler, the building is owned or occupied by different residents. At the end of life, either by wear and tear or by a change in heat demand, the boiler is replaced by an installation company (see fig 4). The decommissioned boilers are disposed over a wide range of scrap recyclers, depending on the installation company.
Fig. 4. Simplified linear product chain for the boiler.
The main research question was to find the opportunities of using the principles from the circular economy and life cycle engineering in the collaboration between both companies. An LCA and value chain analysis were conducted to obtain the necessary insights to construct the problem space matrix. The result visualizes the problem space for different aspects of the life cycle (Fig 5). Each marker in the problem space matrix highlights a specific issue or improvement opportunity in the current lifecycle of a domestic heater. Obviously the main environmental impact is related to the natural gas combustion during use of the heater. However, due to the shared interests of the two companies, the case study focusses primarily on the material aspects of the product lifecycle.
Although multiple opportunities, inspired by the principles of the circular economy, are displayed in the problem space matrix, this paper focusses on two examples. The first example consists of issues related to changes in business models (indicated with E in figure 5). The typical boiler from the case study is already suitable to apply refurbishment as part of the principle functional life extension. Some parts of the heater already have a longer technical lifespan as well as the potential to be reused. From the matrix it is evident that this solution influences many different aspects of business development.
Fig. 5. Problem space matrix for the boiler case study.
The second example, indicated with H in the matrix, is related to material loops, in particular the cast aluminum heat exchanger. This essential part represents over 1/3 of the total mass of the boiler. By closing this loop, the production of primary aluminium from bauxite can be avoided, which offers significant environmental benefits. Furthermore, cast aluminum is one of the more profitable material flows for the recycler.
Since applying the principle of closing material loops is mutually beneficial to the manufacturer and the recycler, the cast aluminum heat exchanger is used as a showcase for the implementation of circular principles by both companies. The possibilities for reverse logistics were investigated. Cooperation of an installation company was required to return decommissioned boilers to the recycler. From multiple disassembly experiments it became clear that it was economically feasible to recover the cast aluminium heat exchangers. The application of dis- and assembly knowledge from the manufacturer yielded a number of valuable insights. Manual non-destructive disassembly was not more expensive or time consuming than traditional destructive disassembly for some disassembly stages and even resulted in a safer process and higher recycling yields. Vice versa, opportunities for design for disassembly and recycling for the boiler were identified using the expertise of the recycling company.
Since the manufacturer sources the necessary heat exchangers from a supplier, it seemed obvious to ship the disassembled cast aluminum parts back to the smelter. That would create an interesting possibility to close the material loop within the same value chain. Unfortunately, this turned out to be more problematic than anticipated, due to the tactical and
legal constrains in upcycling cast aluminum to general commercial specifications.
During evaluation of the case study with both companies, it became clear that the proposed framework actually did supply necessary insight in the complexity of the product lifecycle in relation to the principles of the circular economy. Also the problem space matrix showed the different relations and influences supporting a substantiated selection of the most promising principles to apply within this product lifecycle. Although the case study is descripted quite succinctly, more benefits were acknowledged by all parties involved.
6. Conclusion
The proposed framework supports the planning of future product lifecycles and business development with respect to sustainable manufacturing, by matching appropriate principles of the circular economy to the specific industrial context.
To deal with the ambiguity of sustainability, the three elements (people, planet, profit) should be included simultaneously within a general LCA method and represented in the solution space matrix. Since such a combined method for a LCA is not yet generally accepted, this should be resolved by future research.
Although the complexity of product development in relation to circular economy is difficult to reduce, the proposed framework provides overview of the relations between lifecycle stages, business & sustainability aspects and possible development opportunities.
To support the transition toward the circular economy for a specific industrial context, the framework can be utilized to consider the necessary stakeholders, most suitable sustainability principles and the expected benefits of their implementation.
Combining the theory of General Morphological Analysis with Life Cycle Engineering resulted in a concise framework for practical application in industry. So far, the case study supported the added value of applying the framework. To initiate the necessary paradigm shift associated with life cycle engineering, the involvement of multiple stakeholders is required.
However, the generation of a problem space matrix for a specific industry context still requires knowledge and expertise of the circular economy as well as a certain degree of creativity. Achieving the intended benefits also still depends on external factors, such as the commitment of all involved stakeholders.
Future research
The identification of the aforementioned factors in future case studies should provide additional insight into the relevance of the required creativity and expertise as well as best practices for context-dependent approaches to ensure stakeholder collaboration. The development of tools facilitating implementation of circular principles in industry is continued in a new project on asset life cycle management.
Acknowledgements
Special acknowledgement goes to Ruud van der Meide for the opportunity and support of the case study. The authors thank Van Gerrevink B.V. and Remeha B.V. for providing the opportunity and close collaboration in this research project. We are grateful for the contribution of Jos de Lange.
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