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Radical Rethink: The Birth of Circular Manufacturing

van-den-heuvel-robCapitalizing on the significant new business opportunities offered by circular economics can be best realized by developing three key approaches: shifting from asset owning models to service based ones, utilizing the Internet of Things technology to track products and materials and developing strong take back systems.

Circular economics is fast becoming more mainstream than ever. Greater numbers of companies realize there are profits to be made from this new, more sustainable way of doing business. Some manufacturers feared that second- or third-life product streams would cannibalize their regular, new product lines. However, research suggests this is not the case. They tend to provide goods for a different set of customers. The business case for the circular model is going global. Having gained ground in Europe, the interest in circular economics is now spreading across the world including the United States. One reporter captured the mood: “Laptops made of plastic from old laptops. Aluminum car body parts made from old cars. Chemicals leased out, recovered and leased again. These are just a few examples of how the circular economy, once seen as a Scandinavian specialty, is starting to spin in the United States.”

The circular economy is a regenerative model in which manufacturers find ways to use materials and goods for much longer, creating more than one product lifecycle.

This kind of innovation goes to the heart of what it means to be human: generating wealth and success but in the context of respect for the planet, supporting its survival for future generations.

As Ken Webster, Head of Innovation for the Ellen MacArthur Foundation, writes in his new book, The Circular Economy: A Wealth of Flows, the old “smash and grab” model simply doesn’t work when the “easy surplus” of resources has gone. Indeed, according to a recent report from the Club of Rome, we’d need four planets to sustain everyone with the same standard of living as those in the US. Webster goes on to say, “A systems approach can help, as the requisites in such uncertain, game-changing times are innovation and creativity.”

It is not surprising, therefore, that the World Economic Forum, which brings the world’s leading thinkers, scientists, innovators, politicians and business people together to discuss the big issues we face, put the circular economy on its agenda. At the Annual New Champions summit in Dalian in China last September, the World Economic Forum’s Project MainStream continued to discuss key ways to drive the circular economy forward including the use of new tracking technology to enable manufacturers to monitor and manage the materials and goods for future life cycles.

Rob van den Heuvel
Rob van den Heuvel is the senior vice president of global asset management at DLL. He started his career in several roles within risk management at DLL before he joined the strategic planning department and moved to the US in 2005. After this international assignment, he was named global CFO of the construction, transportation and industrial and food and agriculture business units (GBUs) and managed both GBUs successfully during the credit crunch. In 2013, he was appointed senior vice president of asset management and insurance. Rob holds a master's degree in econometrics, and finished his executive MBA at TIAS/Nimbas in the Netherlands.
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