Companies can MODERATE the costs of the resources they use to save money and generate financial gains.
Resource reuse, remanufacturing, recycling, by-product exchange, circular procurement and selling services instead of products are some of the strategies companies have taken.
Renault is a circular economy pioneer.
Renault has implemented circular strategies at all stages of the vehicle life cycle, including dematerialization through design as well as end-of-life vehicle collection and dismantling, reuse, remanufacture and recycling. In 2008, Renault entered a joint venture with SUEZ to acquire 100% of INDRA vehicle recycling services. The objective of the partnership was to recover 95% of all end of life vehicles in France, addressing the European Community ELV Directive 2000/53. INDRA’s dismantling network processed 400,000 end of life vehicles in 2016. Renault supported INDRA’s development to supply its own plant and foundries (Plastics, Aluminum, Platinoides or cupper), as well as second hand part premium services for repair in its dealer network (offering more affordable solutions for repair to its customers).
Simultaneously, Renault is increasing recycled content in its vehicles, achieving over 32% of new vehicles by weight in EU in 2016. The large amount of recycled plastics reintroduced into the system saves between 10% and 15% of the cost virgin material.
Thanks to INDRA and other company operations, like the Choisy-le-Roi gearbox and injection pumps remanufacturing plant, Renault’s remanufacturing division is more than a €200M business. This is still a small fraction of the European automobile remanufacturing market estimated at €8-10B. Additionally, the company has €370M turnover of dismantling and material recycling.
Global resource constraints are driving a shift to value-based healthcare approaches that reduce cost, increase access to care and improve patient outcomes. At the same time, the rapid pace of technology development triggers the replacement of medical equipment with significant residual value. Therefore, Philips is transforming its business model, moving from selling equipment alone to providing solutions to hospitals and other care providers, sharing risk for results through long-term partnerships.
Through this new approach, Philips can directly manage when to upgrade equipment, refurbish systems, reuse parts and recycle materials. This allows Philips to reduce the total lifecycle costs of equipment and extend their lifetimes. The model enables care providers to also reduce costs and access state-of-the-art technology at a more predictable cost.
By moving away from a purely transactional sales approach, Philips has achieved 50-90% material reuse (depending on the product) through its refurbishing activities, including its reuse of 940 tons of refurbished medical imaging equipment in 2016. Currently 9% of Philips total revenues (in 2016) is circular, with a goal to reach 15% in 2020.