Jyri Arponen: Circular economy playbook

Jyri Arponen: Circular economy playbook

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  Bringing the circulareconomy from strategy to revenues Introducing www.circularplaybook.fi Jyri Arponen Senior Lead
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  Three drivers underpinthe shift towards a circular economy Circular Technology Enables new solutions Customer-centricity Delivers customer outcomes Sustainability Improvesresource utilisation Right purpose Right efficiency Right delivery Source: Accenture @SitraFund @jyri_Arponen www.circularplaybook.fi
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  3 From selling products… Bettercustomer values can be delivered through offering outcomes instead of selling products Source: 1: Company website Profit is generated by selling as many products as possible, fuelling inefficiencies along the value chain Profit is generated by delivering solutions that fit specific customer needs, minimising inefficiencies and increasing consumer experience Example: From Rolls Royce selling engines… … to Rolls Royce selling “Power by the hour” to customers for a fixed charge per hour of operation, per ship. Rolls Royce offers planned maintenance and monitoring services for the equipment aboard from on- shore with the help of sensors1 … to offering outcomes 6. Deep dives1. Why 2. What 3. Capabilities 4. Technologies 5. HowExecutive Summary
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  4 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 1960 1970 19801990 2000 2010 2020 2030 2040 2050 Billion tonnes Development of resource demand1 Our overuse of natural resources drives regulators, investors and companies towards sustainability Sources: 1: Accenture, Appendix 2 for more details, 2: CNN, 3: CDP New consumption pattern needed Gap in supply is driving changing market conditions Regulatory pressure is increasing Investments are shifting towards responsible businesses Businesses raise supplier requirements 6. Deep dives1. Why 2. What 3. Capabilities 4. Technologies 5. HowExecutive Summary
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  5 Finnish technology adaptorsare already successfully using the three drivers to generate value and oppose disruptors Tamturbo provides “Compressed air-as-a-Service” to industrial companies eRent offers a platform to track, manage, rent and rent out equipment Wärtsilä subsidiary Eniram offers full visibility of onboard operations of a vessel with an analytics solution Compressor has high-efficiency electric motor Customers avoid high initial investment and hassles with maintenance Compressors are reinstalled at new clients at the end of contract Service combines digital tracking methods, internet of things and cloud services Customers get easily accessible, mobile application Platform maximises usage rate of equipment Advanced algorithms decompose and model data Mobile app was jointly developed with customers Fuel savings are derived from optimisation and breakdown is reduced 6. Deep dives1. Why 2. What 3. Capabilities 4. Technologies 5. HowExecutive Summary
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  EARLY MOVERS WITHINMANUFACTURING INDUSTRY HAVE ALREADY STARTED CIRCULAR SUPPLY CHAIN SHARING PLATFORM PRODUCT LIFE EXTENSION PRODUCT AS A SERVICE RECOVERY & RECYCLING Machinery & Equipment Marine Energy Transportation @SitraFund @jyri_Arponen cirularplaybook.fi
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  7 3 KEY AREASOF DEVELOPMENT, TO MOVE FROM LINEAR TO CIRCULAR ECONOMY Customer value delivery Resource handling Organisation and collaboration Strategy & Leadership Sourcing & procurement (Re)manu- facturing (Re)sales AftersalesTake-back Recycling Design/ R&D A B C #kasvuakiertotaloudesta @SitraFund @TechFinland @AccentureFI
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  With the CircularEconomy Playbook and tools you achieve circular advantage and measurable business cases www.circularplaybook.fi Value case tool Business model development toolkit Capability maturity assessment Technology maturity assessment Roadmap development PLAYBOOK CHAPTERS EXAMPLE TOOLS1 The playbook consists of 6 chapters with circular economy concepts, best practices and tools to guide your business to identify and define your circular economy opportunity and develop a plan to realize circular advantage 1. Why a circular economy? 2. What opportunities exist? 3. Which capabilities are required? 4. Which technologies can support? 5. How to design the transformation journey? 6. Industry deep dives Business model canvas 1 Additional tools available in the playbook @SitraFund @jyri_Arponen www.circularplaybook.fi
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  The circular economyis about turning inefficiencies in linear value chains into business value 5. UNEXPLOITED CUSTOMER ENGAGEMENTS Sales organisation focus on selling functionality of product rather than the customer problem 1. UNSUSTAINABLE MATERIALS Material and energy that cannot be continually regenerated 2. UNDERUTILISED CAPACITIES Underutilised or unused products and assets 3. PREMATURE PRODUCT LIVES Products are not used to fullest possible working life 4. WASTED END-OF-LIFE VALUE Valuable components, materials and energy is not recovered at disposal Sourcing Manufacturing Logistics Marketing & sales End of life disposalProduct useProduct design @SitraFund @jyri_Arponen www.circularplaybook.fi
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  Five circular businessmodels reduce inefficiencies in the linear model and create value for companies Reform use of resources CIRCULAR SUPPLY CHAIN Use of renewable energy, bio-based or potentially completely recyclable materials Logistics Marketing & sales End of life disposal Reverse logistics Sourcing Manufacturing Product use Circular value chain Optimise capacity use SHARING PLATFORM Increased usage rates through collaborative models for usage, access, or ownership Extend life cycles PRODUCT LIFE EXTENSION Extension of the life cycle through repair, maintenance, upgrading, resale and remanufacturing PRODUCT AS A SERVICE Offering of products for use with retention of product ownership which incentivises increase in resource productivity along the whole life cycle Recover value in waste RECOVERY & RECYCLING Recovery of usable resources or energy from waste or by-products Offer outcome oriented solutions 10 @SitraFund @jyri_Arponen www.circularplaybook.fi Source: Accenture
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  Business model specificsub-models modify different steps of the value chain to make it circular Circular sub-models Recycle/upcycle Circular supplies Build to last Return Repair & Maintain Resell Remanufacture Product design Sourcing Manufacturing Logistics Product use End of life disposal Share Product as a Service Performance as a Service As-a-Service models are mostly concerned with the operation phase, but span across the value chain Marketing & sales Upgrade LEGEND Linear value chain Circular Economy Value Chain Circular Supply Chain Product Life Extension Sharing platform Product as a service Recovery & Recycling @SitraFund @jyri_Arponen circularplaybook.fi Source: Accenture
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  We engaged alarge group of players in the Finnish manufacturing ecosystem, time for global scale up up NON-EXHAUSTIVE @SitraFund @jyri_Arponen www.circularplaybook.fi
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  @sitrafund