Burgess COMMENTARY

Peter Burgess

Five business models in the circular economy: #2 Resource recovery Quentin Drewell • Accenture • Blog Post • 25 Sep 2014 Research by Accenture has revealed five business models companies can adopt - alone or in combinations. Here Quentin Drewell takes a look at resource recovery. The 'resource recovery' model is all about salvaging products at the end of their lives and taking them back into the manufacturing loop. The 'resource recovery' model is all about salvaging products at the end of their lives and taking them back into the manufacturing loop. Through this blog series, I am seeking to address, and summarise at a high level each one of the five business models covered in Accenture’s research, 'The Circular Advantage'. This post elaborates on the 'Resource recovery' model. This is all about salvaging products at the end of their lives and taking them back into the manufacturing loop. So, with this approach, one company’s trash is another company’s treasure. (Or, sometimes, one company’s trash is now also its own treasure depending on how they source it.) 'Resource recovery' means rethinking the way products are designed. Making disassembly easy is priority one. That may mean using clips or screws to connect components, rather than applying glue to fuse them, making sorting easy through identification carriers, using only pure materials or cutting down on the number of parts. However they do it, the goal should be to protect the value of embedded components and material through a product’s life cycle and to reduce costs of collecting, sorting and reprocessing. The better a company can do this, the more primary material can be substituted for secondary, reducing costs and environmental impact. This model is used by companies in one of two ways: to recover the end of life products to recapture and reuse valuable material, energy, and components, or to recover waste and by-products from a production process. 'Ricoh, the document management technology manufacturer, serves as just one example of how to use this model to recover end of life products.' Ricoh, the document management technology manufacturer, serves as just one example of how to use this model to recover end of life products. The company has an ambitious effort in place to reuse components in printers, scanners and other such equipment when they’re retired. Ricoh established a centralized return program across Europe that enables customers to send back used toner cartridges at no charge, and has collection and treatment centers in Europe to handle used service parts after they’re replaced. As for recovering waste, US grocer, Kroger, used to view the 150 tons of food waste it produces each day as a major cost in terms of lost revenue, disposal fees and emissions. Now, Kroger sees it as a provider of inexpensive and clean energy. That energy powers a 49-acre campus that houses offices as well as the distribution center. The company relies on an “anaerobic digestion” system that converts food waste into biogas that runs the campus’s micro turbines and boilers. It replaces virtually all of the natural gas the company previously used to power the distribution center. So far, the initiative has yielded an 18% return on Kroger’s investment. Companies most sophisticated at 'Resource recovery' embed circular practices into the lifecycles of their products. They even reuse waste from other value chains in their production. And those that used to outsource waste management can now make money from it instead. Do you have a circular story to tell? Categories include awards for leaders, cities, digital disrupters, entrepreneurship and pioneers. What are you waiting for? Enter the awards today. Deadline is October 31. Read blog one on 'Circular supplies'.