In the traditional sense, the circular economy is a production and consumption model in which existing materials and products are shared, rented, reused, repaired, remanufactured and recycled for as long as possible. This extends the life cycle of products and resources. The aim is to minimise rejects and waste, and thus the devaluation of raw materials and resources, to a minimum.
We want to take the term more broadly. From our point of view, the circular economy is a building block of the twin transformation, which combines sustainability and digital transformation under one roof. In the broadest sense, it is about new, resource-saving business models, about the transformation of value chains and industrial structures, and about the way in which the various stages of production and consumption work together. Digitization plays a decisive role in this and, if used correctly, is indispensable for change. The circular economy is thus increasingly becoming a data economy.
Sustainability and digitalization form a flywheel that drives each other. In the future, industrial competitiveness and technological leadership will increasingly be defined by the competence to coordinate and shape data relationships.
We see 3 levels of impact on which digitization and the intelligent design of data relationships in the circular economy make the decisive difference and have also included some examples for better understanding:
IMPROVE – Achieving Improvements
- Digital process mapping for the assignment of emissions and energy consumption to products and services and their optimization
- Digital trading platforms as new channels for the marketing of products and secondary materials (recyclates)
- Tracking & tracing for the evaluation of material flows, usage patterns and quality of recycling processes for optimized product design
- Automated repair & service cycles based on actual usage behavior (IoT)
- Paperless logistics in an integrated customer portal
- Capture relevant data points for purchasing decisions and analyze data to improve logistics planning and avoid returns
- Digitally empowered diversity and inclusion through accessible and digital workplaces
- Introduction of digital training measures
CONVERT – Achieving realignment
- Take-back of products and separation of raw materials facilitated by digitally available product components and automated processes
- Feeding to the secondary market via platforms (second hand market)
- Refurbishment
- Data-driven marketing for fact-based preparation and targeted communication of sustainability key figures (avoidance of greenwashing)
- Digital technologies and methods for measuring customer satisfaction (e.g. Net Promoter Score)
TRANSFORM – Realizing reorientation and restructuring
- Reduction of transaction costs through platforms and apps for organization and scaling (digital workplace, collaboration with customers and partners)
- Pay per use (usage-based business models – product remains the property of the manufacturer and can be used multiple times) – incentive to produce products that are as durable and robust as possible
- More intensive use of products through sharing or bundling of services and functions via platforms or apps
- Digital product passport to facilitate purchasing decisions
One conclusion that can be drawn from the presentation is the following: Only digitization creates the basis for a comprehensive ecological transformation of our economy.
We are experts if you want to usher in or further advance the circular economy in connection with digital transformation in your company in a sustainable way:
We consistently think digitization through to the end
- A strategic approach to digital transformation (see also Digital Transformation Strategy)
- Common data models and reference architectures for end-to-end data cycles (see also Architecture Consulting)
- the creation of a reliable and secure data infrastructure and the promotion of the convergence of the different data across system boundaries in order to connect physical material flows and digital data streams
- a consideration of the business goals from a social, economic and ecological point of view (see Digital Business Sweet Spot)
- Consideration of the impact on your organization, processes and cultural challenge (see Organizational Development)
Do you have any questions? Then contact us!