Circular economy

Circular Business Model

Successful business models for the circular economy

With the Circular Economy Action Plan, European policymakers have created a regulatory framework for the sustainable economy of the future. However, for companies to implement the circular economy in the long term, it must first and foremost be profitable. The key question is therefore: how can companies gradually transform their linear business model into a profitable circular business model?

With our Circular Business Model, we accompany this transformation process and prepare your company for the requirements of the circular economy. To do this, we analyze your existing linear business model and work with you to define the scope and objectives for the circular business model.

Together with you, we develop the value proposition, the value creation architecture and the revenue model. The value proposition is based on customer needs in terms of functionality and environmental compatibility. The value creation architecture defines the design of the product portfolio and the key elements of the supply chain that are necessary for the provision of services. The revenue model describes the sources of income, be it through the sale of new and refurbished products or through the pricing of services within the scope of the usage and refurbishment cycles.

Service packages

• Analyze existing business model and define goals
• Define sustainable value propositions for products and services
• Developing a recyclable product portfolio
• Formulating a strategy for a circular supply chain
• Creating a sustainable revenue model for the circular economy

Your benefit:

1. You position your company for a sustainable future.
2. They open up new markets and customer groups.
3. You increase the profitability of your company.

Circular Product Design

Consider circularity in the product architecture

The deep and sometimes irreversible integration of components with different lifetimes limits the recyclability of your products. Wear due to mechanical or chemical influences as well as time-related material changes (e.g. loss of function due to leakage or loss of elasticity) limit the service life. An everyday example is the modern car: the service life of the bodywork is often many times longer than that of the combustion engine. Nevertheless, engine damage can often lead to total economic loss. Design elements and electronic systems often have even shorter life cycles.

To enable a functioning circular economy, the product architecture must be rethought and designed in a modular way. The aim is to create interchangeable functional units that extend the overall useful life of the product. This reduces costs and waste for remanufacturing. Products designed according to these principles can therefore go through a large number of use and reprocessing cycles.

Products in integral design must be broken down into their starting materials and processed. Mixing of materials should be minimized and irreversible contamination, e.g. with operating materials, should be spatially limited. Ideally, detachable connections between materials or areas that can and cannot be processed are used.

Service packages

• Analyze usage and wear behavior of the products
• Define service life-oriented functional units
• Modularize product architecture
• Quantify potential savings in costs and emissions

Your benefit:

1. They increase sales per product over the entire service life.
2. You save material and procurement costs through multiple use.
3. They minimize waste in product disposal.
4. You reduce the ecological impact of your products.

Circular Supply Chain Process Design

Operational business processes for the circular economy

The integration of the circular economy into day-to-day business requires new supply chain processes. However, a lack of information from users makes it difficult to forecast the goods to be returned. At the same time, dynamic planning and control of reverse logistics involving several partners enables more precise planning of supply chain processes.

Our experts help you to achieve a predictive circular economy: we create planning security for you in your circular economy. We also develop transparent processes for your reverse logistics and remanufacturing area. We adapt the processes to your business model so that value-added services can be carried out smoothly by service providers.

Service packages

• Developing a planning tool for the circular economy
• Designing reverse logistics processes
• Defining the value-added services of logistics service providers

Your benefit:

1. You achieve greater planning security in the circular economy.
2. You achieve a leveled utilization of your processing area.
3. You maximize your profit by cooperating with logistics partners.

Circular Supply Chain Network Design

Efficient networks for the circular economy

The transformation from a linear to a circular economy is bringing about far-reaching changes in the flow of goods in the supply chain. Companies not only have to deliver their products to customers, but also efficiently master the complex task of product return. By its very nature, product return is less clearly defined than the distribution task and therefore requires a greater degree of flexibility.

We create the necessary structures in your supply chain network for efficient forward and reverse logistics in the circular economy. We rely on the Digital Supply Chain Twin and supplement existing networks with regional or local collection and sorting points as well as corresponding transport relationships as required. This allows you to make optimum use of your existing resources, such as storage and transport capacities, to achieve an economical and sustainable circular economy.

Service packages

• Evaluate the circularity of the existing supply chain network
• Developing digital supply chain twins for forward and reverse logistics
• Designing circular structures for the supply chain network

Your benefit:

1. You ensure functioning logistics for your circular economy.
2. You make optimum use of your logistics resources.
3. They use regional collection and sorting points.

Circular Production Process Design

Efficient factories for processing and recycling

Your factory needs to be redesigned to enable the internal reconditioning of products. However, the resources available today are not sufficient to cover the entire remanufacturing process. Processes such as inspection, disassembly, repair, reconditioning and quality testing are therefore required for the returned goods. The reconditioned products then have to be brought back onto the market, which requires new planning and management of your recycling and remanufacturing processes.

With our expertise in production process and factory planning , we develop your factory for product overhaul. We place particular emphasis on the use of renewable energy to maximize the sustainability of your factory. We create a flexible factory planning layout that can be adapted to different products for overhaul and repair. We also define your production processes from the inspection of the products to the shipment of the overhauled products.

Service packages

• Planning a factory for your circular economy
• Develop remanufacturing processes
• Efficiently plan production resources for the circular economy

Your benefit:

1. They create a flexible factory for overhauling products.
2. You use your production capacities efficiently.
3. You realize a sustainable factory.

Circular Production Technology

Thinking circularity in product development

The manufacture of a product creates important prerequisites for its suitability in the circular economy. The production technologies, process chains and materials used have a significant influence on the efficiency and costs of recycling or reprocessing. This aspect is particularly important in manufacturing processes for surface treatment, joining and assembly processes.

Circularity – alongside functionality and manufacturing costs – should therefore be a key objective when selecting production methods and designing process chains. At Rothbaum, we design your process chains according to circular principles and work closely with your development department and industrial engineering. In this way, we enable your products to use production technologies that are compatible with the principles of the circular economy.

Service packages

• Analyze existing production technologies
• Adapting products conceptually and constructively
• Designing cycle-compatible process chains

Your benefit:

1. They improve efficiency and costs for recycling and refurbishment.
2. Your production makes an active contribution to climate protection.

What is circular economy?

The circular economy is an economic policy framework for the production and use of industrial goods. In the circular economy, products are reused, refurbished, repaired or recycled as often as possible after manufacture in order to maximize the cycles of use and thus the service life.

What is the opposite of circular economy?

The opposite of the circular economy is the linear economy. In a linear economy, resources are extracted, converted into products, consumed and then disposed of as waste. This model leads to a high waste of resources and environmental pollution. It is based on the principle of “take-make-dispose”.

Does Germany have a circular economy?

Yes, Germany has a circular economy and is even one of the leading examples of sustainable resource management in the world. Germany also invests in circular economy research and development to promote innovative technologies and business models that improve resource efficiency. Companies are also encouraged through various programs and funding to implement sustainable practices and optimize their production processes to reduce waste.

What is the purpose of the Circular Economy Act?

The Closed Substance Cycle Waste Management Act (KrWG) forms the basis for waste avoidance, reuse and recycling of materials in Germany. It obliges companies and households to separate waste and promotes the sustainable use of resources.

What are the advantages of the circular economy?

The circular economy offers ecological and economic benefits. It protects the environment and contributes to climate protection. Companies can also achieve higher contribution margins per unit and continuous sales over the entire product life cycle in the circular economy. The industry as a whole can also reduce its dependence on raw materials.

What are examples of circular economy?

Examples in the circular economy are much more present in everyday private life than in an industrial context. Apple’s trade-in program is very well known. When purchasing a new product, the old device can be traded in and the purchase price for the new device is reduced. The exchanged devices are either refurbished or dismantled into their component parts.

Renault is the pioneer of the circular economy in the automotive industry. Renault has set up a refactory for the reconditioning of used cars in Flins.

Why is circular economy better than recycling?

The circular economy and recycling are two closely linked approaches to the sustainable use of resources. The circular economy offers advantages by minimizing resource consumption and waste. This reduces the environmental impact and actively contributes to climate protection. In addition, the circular economy creates the
longevity of products.

What is the difference between linear economy and circular economy?

In the linear economy, products are disposed of at the end of their service life and only a small proportion of the resulting waste is recycled. In contrast, in the circular economy, products are kept in use for a longer period of time through repeated processing and repair. In the linear economy, disposal is merely a cost factor. In the circular economy, refurbishment and repair is another important source of income for manufacturing companies. Products must be adapted for the circular economy and their production must be designed to be recyclable.