The Future of Manufacturing
The manufacturing industry has extracted natural resources for centuries, without any consideration for designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. What if we apply circular principles as the foundations of a new system in the manufacturing sector? How can the Nordics lead the way? And what does the industry need to work on in order to close the loop?
Photography: Sam Moqadam via Unsplash
When looking at the 17 Sustainable Development Goals (SDGs) and 169 targets, Paula Lehtomäki, Secretary General, Nordic Council of Ministers, the first woman to hold this position, believes “the Nordics are doing generally very well,” with two exceptions: taking urgent action to combat climate change and its impacts (SDG 13) and ensuring sustainable consumption and production patterns (SDG 12). How will the future of manufacturing look like if we would go circular?
There are several measures we can make to achieve a sustainable manufacturing industry. Below you will find five suggestions related to what industry could work on to go circular:
1) Preserve value and avoid quality loss in the materials
“In the EU, materials such as steel, aluminium and plastic loose about 59 per cent of their value after one lifecycle,” says Per-Anders Enkvist, CEO, Material Economics, Sweden. Retaining the value after several life cycles is a key factor to become more circular.
Plastic is worst in class, with only eleven per cent retained value after a single use. This is due to the fact that plastic products are often designed in a way that makes them hard to recycle. For example, a lot of plastic products contain different types of plastics. When you buy a soft drink, for instance, the plastic in cap may be different from that of the bottle. This makes it challenging to recycle—even though plastic is a material that lasts for hundreds of years. It is a paradox that we often dispose of plastic after only one single use, while a circular economy for plastic in which it never becomes waste is possible.
Steel, on the other hand, has a particularly high retained value after recycling, with 66 per cent of its value after one lifecycle. In general, metals tend to have a higher degree of retained value, but, for example, aluminium retains on average 52 per cent of the value after one cycle. This is because aluminium is alloyed in the production, which makes it more difficult for the next user to retain full usage.
The Better Effect Index by Kinnarps AB
2) Smart design
In addition to preserving material value, circular economy advocates using products longer. A key element here for manufacturing is to make smarter designs. Not only can design help extend product lifetimes, but it can also have the added benefit of helping to avoid quality loss in materials as mentioned above. One way to incentivise the extended lifecycle of products is by increasing the quality of each component. Swedish furniture manufacturer Kinnarps AB makes components for furniture, assembles the furniture and delivers the end product to its customers. Johanna Ljunggren, Corporate Sustainability Manager, Kinnarps, has several interesting examples of how to extend the lifetime of materials. One is the importance of creating dynamic designs which take into account trends and users’ changing needs over time. This is why, at Kinnarps, you can change the fabrics on almost all of its furniture. After all, the fabric is subject to most of the wear and tear, and is more sensitive to a shift in trends.
Furthermore, manufacturers must consider the need for spare parts and repairs in the product’s lifecycle. It is difficult to fix something if spare parts are not available.
Patch designed by Mia Culling and Axel Bjurström
3) Waste as a resource
A next step towards circularity is employing “waste as a resource,” i.e. using waste as inputs in the production of new products. We need to see “waste” as a resource in new products. At Kinnarps, discarded textiles are used to make new stools, which the firm sells under the name “Patch.” For example, the Patch stool, designed by Mia Cullin and Axel Bjurström, is fully upholstered with “waste” fabric from Materia AB’s upholstery workshop. Each upholstery combination is unique. Materia stands for experimentation and creativity, and the Tranås, Sweden-based company, founded in 1992, has been part of the Kinnarps Group since 2004.
Reusing materials is also good for business. In the future, circular material streams are expected to expand and eventually become commonplace. In fact, there are already a number of platforms that allow for exchange of materials, such as Excess Materials Exchange (EME) in The Netherlands, a young and innovative technology company. EME’s digital matching platform finds new, high-value reuse options for secondary materials and (waste) products of businesses.
“One also needs to think quite carefully as a manufacturer on what alloys you use and how you put your products together, so that the next user can also do something high value with that materials,” Enkvist adds.
Photography: Juliane Liebermann via Unsplash
4) Circular business models can be highly profitable
Consumers are becoming more aware of sustainability issues, while their interest for used and recycled products is increasing. Recent research, “Is there demand for circular products?”, conducted by the Sustainable Business Unit at RISE Research Institutes of Sweden (RISE) and financed by the Marianne and Marcus Wallenberg Foundation, suggests there is demand for circular products. It seems circular products can likely successfully enter the existing market at the retail price of a new product. In fact, customers may even be willing to pay more for “circular” products than brand-new, “non-circular” products.
According to Enkvist, having more “green” and circular product lines often come from the corporate sustainability departments. It is, however, of utmost importance to get senior executives and management to embrace and lead the circular transition as well. This can be done by quantifying and demonstrating the fact that the transition will also be good for the overall profit of the company. Circular business models can give businesses a competitive edge, while remaining profitable. For example, reusing waste can be a way to save costs or identify new revenue streams.
5) Product as a service
A key element of the circular economy and in the manufacturing industry is to implement “products as a service” in the sales strategy. “Product as a service” means that instead of selling the product, it is leased to the user. This means that the manufacturer owns the product and is also responsible for it. This allows for easier upkeep of the product, i.e. repairs and service, which helps to extend its lifetime. It also ensures products are returned to manufacturers, enabling them to be reused and their materials recycled.
Ljunggren highlights that this incentivises the manufacturer to keep products in the loop for as long as possible. She gave a few Kinnarps examples related to their services for renovation and updates, which can be given on site. Doing repairs and updates on site reduces the need for transportation.
How do we speed up the transition?
The change is already happening, as new products, services and entire markets are created. However, the change is not happening fast enough, or on a large enough scale. Hence, we cannot wait for the demand side to pull the circular transition home. We need policy makers to shape the economic framework so that circular solutions become accessible and profitable at a much larger scale.
Enkvist, Ljunggren and Marthe Haugland, Senior Adviser, Nordic Innovation, point out the following four factors that could speed up the transition to a circular economy in the manufacturing industry:
Pricing carbon and pricing materials will speed up the transition;
Testing more, and working together with customers. Attractive business models might then turn up in the process;
Quantify everything in economic terms so it gets easier for the executives to be included in the business models;
Challenge the designers to design products that are as valuable for the second user as the first one.
This article has been written by Marie Storli and Peter Michel Heilmann based on the speeches and conversations that took place during “Circular Food Systems” session of the Nordic Circular Summit 2020.
