Purpose: The transition from linear to circular product systems is a big step for any organization. This may require an organization to change the way it does business, designs product and manages supply chain. As these three areas are interdependent, bringing change in one area will influence the others, for instance, changing the business model from conventional sales to leasing will demand changes in both product design and the supply chain. At the same time, it is essential for an organization to anticipate the economic and environmental impact of all changes before it may decide to implement the circular product systems. However, there is no tool available today that can assess economic and environmental performance of circular product systems. The purpose of this research is to develop a multi-method simulation based tool that can help to evaluate economic and environmental performance of circular product systems. Method: The conceptual models that are used to develop the tool have been formulated based on review of the state-of-the-art research. System Dynamics (SD) and Agent Based (AB) principles have been used to create the simulation model which has been implemented in Anylogic software platform. Originality: This research presents the first multi-method simulation based tool that can evaluate economic and environmental performance of circular product systems. Findings: Multi-method simulation technique is useful in designing dynamic simulation model that takes into consideration mutual interactions among critical factors of business model, product design and supply chain. It also allows predicting system's behaviour and its influence on the economic and environmental performance of circular product systems.
The transition towards a circular economy has become important. Manufacturing industry being a major stakeholder in this transition has started exploring the potential of this transition and challenges in implementation. Ambitious companies such as Gorenje d.d. has taken the circular economy transition seriously and aims to become a pioneer in implementing circular manufacturing systems. One vital step in this transition is the business model shift from the linear (sales model) to a circular model such as 'product as a service'. This brings new challenges to Original Equipment Manufacturers (OEMs) that have never been experienced in their conventional businesses. One of the challenges is to establish an information communication and technology (ICT) infrastructure that enables information management and sharing as well as establishes a real-time communication between relevant stakeholders. Outlining such an ICT infrastructure is the objective of this paper.
Circular Economy (CE) promotes trading functions of a product as aservice instead of selling the product in conventional ways. For a product like ababy stroller, the function means ensuring mobility with infants without needingto own a stroller. This approach of acquiring functions only when needed opensup the possibility to share the same products with multiple users. For a manufacturer that has built its business on a conventional sales model over the decades,this shift may be too radical. Therefore, for the manufacturers, it is important tounderstand consumer perceptions of the service-oriented business model beforeentering this unknown territory. To develop a thorough understanding of consumerperceptions of leasing a stroller instead of buying one, a survey among 200 parentsin Stockholm is conducted. The survey brings out quantitative results such as 39%of respondents are open to leasing and identifies key influencing factors such asconvenience and environmental image that play a key role for the remaining 61%of respondents to choose leasing. This research concludes that a large numberof consumers are open to leasing if a high level of service and environmentallysustainable strollers are offered at a competitive price.
Resource efficiency has become an important topic due to dramatic increase of world-population and globalization. A company that is not able to efficiently utilize its resources is less sustainable. It produces at higher cost as well as with higher environmental impact. Especially small and medium-sized enterprises are mostly not able to deal with these kinds of issues in addition to their daily business. Their characteristics differentiate them from large companies and require approaches that respond to their specific needs. Not only technological aspects but also organizational problems as well as lack of methodology are reasons for low resource efficiency in small companies. This thesis therefore focuses on developing a tool which facilitates the increase of resource efficiency particularly for small and medium-sized enterprises.To start with, this thesis investigates the meaning of resource efficiency and the basics of performance measures as well as special characteristics of small and medium-sized enter-prises. Afterwards, measures are designed in order to quantify resource efficiency. A case study is carried out as well to investigate how to ensure applicability of a supporting tool in small and medium-sized enterprises from different industries. In the final part, a computer-based tool is developed which facilitates the assessment of resource efficiency potentials using 12 resource efficiency measures, a consistent approach and a ranking method.Keywords: Resource efficiency, performance measures, small and medium-sized enterprises
Manufacturing industry is under permanent pressure to maintain its economic growth and profitability as strong societal backbone. At the same time pressures of waste generation and resource consumption are increasing as result of manufacturing operations. Since manufacturing industry is one of the major consumers of natural resources it is therefore essential to reduce dependency on natural resources by decoupling economic growth from consumption. Resource efficiency approaches can improve the performance of production systems by reducing resource losses. However, the fundamental assumption at the basis of resource efficiency approaches is that resources are available infinitely. As a consequence, challenges of sustainability and resource scarcity remain inadequately addressed. The objective of this research is to develop analysis methods and decision support tools for manufacturing industry to facilitate its transition from linear production systems to circular manufacturing systems, which are economically viable and environmentally sustainable. The initial scope of study focuses on industrial resource efficiency assessment in production systems. Expanding the view to a manufacturing system perspective, the current research is explored with regard to circular manufacturing systems in the context of economic benefits, resource scarcity and waste generation. Systematic analysis methods and decision support tools are developed for industrial companies to facilitate the adaption of circular manufacturing systems. These developments are supported by industrial case studies. The analysis methods are to the largest extent based on agent-based simulation approaches. The tools are capable of assessing the economic and environmental impact of different business models, design strategies as well as supply chains settings. Moreover, the tools are able to determine whether introductions of new (circular) business models will be adopted by customers. One empirical market study is performed to investigate value propositions of a circular business approaches based on customer decisions.
Improved use of resources is of enormously high relevance and crucial for achieving as well as maintaining a sustainable condition. Especially industrial production has a superior responsibility in creating a long-term viable way of living. However, there is a lack of systematic evaluation procedures for operational resources in production systems, meaning product material, energy, equipment and humans. Especially small and medium-sized enterprises, representing the largest number of all companies in Europe, are mostly not able to deal with these kinds of issues in addition to their daily business.
The purpose of this licentiate thesis is the investigation for and development of an evaluation approach for resource efficiency and effectiveness in small and medium-sized enterprises. Two literature reviews and one industrial case study have been carried out. To start with, the first literature review founds a theoretical basis for the meaning of resource efficiency and effectiveness. The second literature review investigates latest measures and approaches for production system evaluation. In the next step an evaluation approach for resource efficiency and effectiveness evaluation in small and medium-sized enterprises is developed and tested within a single case study. The result consists of a comprehensive approach for small and medium-sized enterprises with focus on economic short-term and long-term improvements.
This paper introduces an agent-based approach to study customer behavior in terms of their acceptance of new business models in Circular Economy (CE) context. In a CE customers are perceived as integral part of the business and therefore customer acceptance of new business models becomes crucial as it determines the successful implementation of CE. However, tools or methods are missing to capture customer behavior to assess how customers will react if an organization introduces a new business model such as leasing or functional sales. The purpose of this research is to bring forward a quantitative analysis tool for identifying proper marketing and pricing strategies to obtain best fit demand behavior for the chosen new business model. This tool will support decision makers in determining the impact of introducing new (circular) business models. The model has been developed using an agent-based modeling approach which delivers results based on socio-demographic factors of a population and customers’ relative preferences of product attributes price, environmental friendliness and service-orientation. The implementation of the model has been tested using the practical business example of a washing machine. This research presents the first agent-based tool that can assess customer behavior and determine whether introduction of new business models will be accepted or not and how customer acceptance can be influenced to accelerate CE implementation. The tool integrates socio-demographic factors, product utility functions, social network structures and inter-agent communication in order to comprehensively describe behavior on individual customer level. In addition to the tool itself the results of this research indicates the need for systematic marketing strategies which emphasize CE value propositions in order to accelerate customer acceptance and shorten the transition time from linear to circular. Agent-based models are emphasized as highly capable to fill the gap between diffusion-based penetration of information and resulting behavior in the form of purchase decisions.
The recent circular economy movement has raised awareness and interest about untapped environmental and economic potential in the manufacturing industry. One of the crucial aspects in the implementation of circular or closed-loop manufacturing approach is the design of circular products. While it is obvious that three post-use strategies, i.e., reuse, remanufacturing, and recycling, are highly relevant to achieve loop closure, it is enormously challenging to choose “the right” strategy (if at all) during the early design stage and especially at the single component level. One reason is that economic and environmental impacts of adapting these strategies are not explicit as they vary depending on the chosen business model and associated supply chains. In this scenario, decision support is essential to motivate adaptation of regenerative design strategies. The main purpose of this paper is to provide reliable decision support at the intersection of multiple lifecycle design and business models in the circular economy context to identify effects on cost and CO2 emissions. The development of this work consists of a systematic method to quantify design effort for different circular design options through a multi-method simulation approach. The simulation model combines an agent-based product architecture and a discrete event closed-loop supply chain model. Feasibility of the model is tested using a case of a washing machine provided by Gorenje d.d. Firstly, design efforts for reuse, remanufacturing, and recycling are quantified. Secondly, cost and emissions of different design options are explored with different business model configurations. Finally, an optimization experiment is run to identify the most cost-effective combination of reused, remanufactured, and recycled components for a business model chosen on the basis of the explorative study results.
Background: Transitions from a linear (take-make-dispose) to a circular product system (consideringreuse/remanufacturing/recycling) require changes of business models through new value propositions.Therefore, the focus for industrial businesses shifts from selling physical products to, for example,providing access to functionality through business innovation. In this context it is particularly challengingto understand what complexity a new concept like circular economy (CE) brings to establishedbusinesses where the success and the failure of the business is dependent on customer’s acceptance ofnew value propositions.Objective: The objective of this paper is to develop an algorithm based on gathered survey data to “learn”choice behavior of a small customer group and then replicate that choice behavior on a larger populationlevel.Purpose: This paper explores the opportunities of different circular business offers in the city of Stockholmby embedding support vector machine classifiers, which are trained on CE survey data, in asimulation model to quantify and study choice behavior on city level.Method: Stated choices from CE surveys including unique demographic data from the respondents, i.e.age, income, gender and education, are used for algorithm training. Based on the survey data, supportvector machine algorithms are trained to replicate the decision-making process of a small sample ofrespondents. The example of a washing machine is used as a case study with the attributes price andpayment scheme, environmental friendliness as well as service level. The trained support vector machinesare then implemented in a simulation model to simulate choice behavior on population level(Stockholm city).Originality: This paper is the first of its kind to use both machine learning and simulation approaches in aCE market acceptance context.Findings: Based on the washing machine-specific survey and Stockholm-specific customer data, resultsindicate that larger share of the Stockholm population would be willing to opt for circular washingmachine offers compared to the existing linear sales model. Given the data-driven nature of machinelearning algorithms and the process-oriented structure of simulations programs allows for generatinglarge amounts of data from small samples. This supports exploration of new emerging areas like CE inaddition to saving time and expenses.
Background: In industrial practice a transition from a linear (take-make-dispose) to a circular product system (considering reuse/remanufacturing/recycling) requires the change of business models through new value propositions. In doing so the focus of the value proposition shifts from selling a physical product to providing access to functionality through business innovation. One key factor related to circular business transitions is market acceptance. It is particularly challenging to understand what complexity a new concept like circular economy (CE) brings to established businesses where the success and the failure of the business is dependent on customer's acceptance of new value propositions. Purpose: This paper empirically explores the opportunities of a circular business approach for washing machines in the city of Stockholm by quantifying and assessing customer preferences for CE value propositions for a business to customer (B2C) scenario. Method: This study uses the method of choice-based conjoint analysis to investigate preferences based on the attributes price and payment scheme, environmental friendliness as well as service level. Originality: This paper is the first of its kind to assess customer preferences from the CE market acceptance point of view using a conjoint approach and provides insight to what extent new CE value propositions may be adopted. Findings: Results indicate that there is general interest in paying for access rather than for ownership. Service levels have the strongest impact on customer utility of a washing machine offer. If associated with reduction in CO2 emissions the number of remanufacturing cycles can increase purchase probability. As a method choice-based conjoint analysis is highlighted as beneficial to break down CE value propositions and to identify to what extent particular service-related attributes and product-related attributes contribute to overall customer utility. (C) 2017 Elsevier Ltd. All rights reserved.
The concept of circular economy (CE) is to an increasing extent treated as a solution to series of challenges such as waste generation, resource scarcity and sustaining economic benefits. However the concept of circularity is not of novel as such. Specific circumstances and motivations have stimulated ideas relevant to circularity in the past through activities such as reuse, remanufacturing or recycling. Main objectives of this work are: to provide a comprehensive review of research efforts encompassing aspects of resources scarcity, waste generation and economic advantages; to explore the CE landscape in the context of these three aspects especially when they are considered simultaneously; based on an idea of a comprehensive CE framework, propose an implementation strategy using top-down and bottom-up approach in a concurrent manner. To fulfill this objective a comprehensive review of state-of-the-art research is carried out to understand different ideas relevant to CE, motivation for the research and context of their recurrence. Main contributions of this paper are a comprehensive CE framework and a practical implementation strategy for a regenerative economy and natural environment. The framework emphasizes on a combined view of three main aspects i.e. environment, resources and economic benefits. It also underlines that joint support of all stakeholders is necessary in order to successfully implement the CE concept at large scale. The proposed framework and implementation strategy also identify new avenues for future research and practice in the field of CE.
Resource efficiency has become a topic of greater importance due to dramatic increase of world-population and globalization. A company that is not able to efficiently utilize its resources is less sustainable and competitive. This paper introduces an assessment approach as a tracking and analyzing system to facilitate improvement of resource efficiency particularly for SMEs. The approach supports common economic KPIs of producing companies using resource-based measures. Two main elements are used. One for tracking resource efficiency measures (REC) and one for analyzing efficiency losses (REF). A tool has been designed to support the application and interpretation of the system elements.
It is estimated that the adaptation of the Circular Economy approach can yield material cost savings of hundreds of billions of dollars per year for the EU and can result in huge environmental benefits. To tap this potential, the manufacturing industry needs to take a circular approach, where the products are designed intentionally to be used for multiple lifecycles. However, there is a lack of methodologies to date that can support such an approach. To fill this gap, this research has proposed a novel methodological approach that can support designing products for multiple lifecycles to keep the products as well as the components and the materials at their highest utility and value at all times. This research has identified that there is a strong synergy among the concepts of product design strategies, product obsolescence and product end-of-life options. Taking this synergy as the foundation and adopting modular architectures in the product design and development process, lifecycle planning can be performed for products that will sustain multiple lifecycles. This research is performed in two steps: first, the research review process is used to explore the knowledge base in the field of product design methodologies and based on the insights from the literature a novel methodological approach is proposed; second, a case example is used to demonstrate the applicability and effectiveness of the proposed methodological approach.
Future manufacturing systems need to be more flexible, to embrace tougher and constantly changing market demands. They also need to make better use of plant data, ideally utilizing all data from the entire plant. Low-level data should be refined to real-time information for decision making, to facilitate competitiveness through informed and timely decisions. The Line.inf or mai on System, Architecture. LISA, is designed to enable flexible factory integration and data utilization. In LISA, international standards and established off-thevslielf technologies have been combined with the main objective to be industrially applicable. LISA is an event-driven architecture with a prototype-oriented information model and formalized transformation services. It features loose coupling, flexibility, and ease of retrofitting legacy devices. The architecture has been evaluated on both real industrial data and industrial demonstrators and is also being installed at a large automotive company.
Future manufacturing systems need to be more flexible, to embrace tougher and constantly changing market demands. They need to make better use of plant data, ideally utilising all data from the entire plant. Low-level data should be refined to real-time information for decision-making, to facilitate competitiveness through informed and timely decisions. The Line Information System Architecture (LISA), is presented in this paper. It is an event-driven architecture featuring loose coupling, a prototype-oriented information model and formalised transformation services. LISA is designed to enable flexible factory integration and data utilisation. The focus of LISA is on integration of devices and services on all levels, simplifying hardware changes and integration of new smart services as well as supporting continuous improvements on information visualisation and control. The architecture has been evaluated on both real industrial data and industrial demonstrators and it is also being installed at a large automotive company. This article is an extended and revised version of the paper presented at the 2015 IFAC Symposium on Information Control in Manufacturing (INCOM 2015). The paper has been restructured in regards to the order and title of the chapters, and additional information about the integration between devices and services aspects have been added. The introduction and the general structure of the paper now better highlight the contributions of the paper and the uniqueness of the framework.