Periodic Reporting for period 3 - ReCiPSS (Resource-efficient Circular Product-Service Systems)
Berichtszeitraum: 2021-06-01 bis 2022-12-31
Circular Manufacturing Systems (CMS) are estimated to bring tremendous environmental, social, and economic benefits and advantages. However, research shows that the circular manufacturing landscape is fragmented, highly granular and rarely touching implementation level. In order to elevate CMS implementation in practice, it is critical to raise the interest, involvement and support of the OEMs, and to integrate product-service systems into the mainstream business. In this backdrop, the overarching goal of the ReCiPSS project is to demonstrate the implementation of CMS addressing different aspects of the industrial and business environment. In doing so, ReCiPSS team has worked on two large-scale demonstrators from the White Goods and the Automotive sectors by taking a systemic approach where the entire value chain is in the scope of the project.
The White Goods demonstrator, Gorenje, has been practicing a linear business approach built upon the model of product sales and after-sales services for decades. As part of the ReCiPSS project, Gorenje aimed at implementing CMS based on 'pay-per-use' offering for their Asko laundry appliances and by exploring the potential of retaining the value of the appliances to an optimum level and for a significant longer time through repair and refurbishing.
The Automotive demonstrator, Bosch, has been in the business of remanufacturing of parts and components for decades but faces many challenges in the reverse supply chain of cores. As part of ReCiPSS project, C-ECO together with Bosch aimed at developing and implementing an innovative ‘core management-as-service’ offering with key focus on developing a part data management platform to improve the quantity and quality of core return.
The White Goods demonstrator, Gorenje, has been practicing a linear business approach built upon the model of product sales and after-sales services for decades. As part of the ReCiPSS project, Gorenje aimed at implementing CMS based on 'pay-per-use' offering for their Asko laundry appliances and by exploring the potential of retaining the value of the appliances to an optimum level and for a significant longer time through repair and refurbishing.
The Automotive demonstrator, Bosch, has been in the business of remanufacturing of parts and components for decades but faces many challenges in the reverse supply chain of cores. As part of ReCiPSS project, C-ECO together with Bosch aimed at developing and implementing an innovative ‘core management-as-service’ offering with key focus on developing a part data management platform to improve the quantity and quality of core return.
The White Goods demonstrator has deployed 333 appliances as part of ‘pay-per-use’ offering in Denmark, the Netherlands, Slovenia, and Sweden to serve both B2B and B2C segments. A new model of Asko washing machine and tumble dryer is developed for 15,000 cycles. These appliances are equipped with integrated sensors that can monitor the usage data and operating conditions in real-time. Long-lasting appliances ensure high reliability and fewer maintenance and service interventions and repair, thus, low operating costs. A full functioning Internet of Things (IoT) platform is developed including web and mobile applications. This platform connects appliances, users, OEM, and service providers in real-time which manages pay-per-use from orders placed by customers to end-of-life. The White Goods demonstrator has also planned, assessed and established capabilities to refurbish the appliances as part of the pay-per-use offer.
The automotive demonstrator has implemented ‘core management-as-service’ offer at three wholesalers and collected more than 100.000 cores. The ‘core management-as-service’ includes both digital and physical services. The digital service is offered through the part data management platform that is developed in the ReCiPSS project. This platform has made reman-specific data collection, storing and sharing significantly efficient. This has also improved significantly the availability of information that is necessary for core sorting and selection. For example, a procedure for deriving recommended actions for wholesalers to proactively manage their options (surcharge associated with core return) portfolio is established, which is a result of the transparency generated by the ICT platform. The platform has greatly impacted core management efficiency. As part of the physical service, cores now can be shipped directly from the workshops to the remanufacturers bypassing the complex trade levels and the right stakeholder in the trade level could be compensated. Furthermore, the core selection is now possible to be centralized and organized by skilled labours obsoleting the need for multiple core selections at each trade level. This also opened up the possibility for better bundling of cores and shortening the logistics routes.
As a support to the implementation of the demonstrators, the project has brought significant innovation in business models, product design and supply chains. Several product design methodologies and modelling and simulation tools have been developed which not only well-prepared the demonstrators for the pilot phase but also for the scale-up in the future.
The automotive demonstrator has implemented ‘core management-as-service’ offer at three wholesalers and collected more than 100.000 cores. The ‘core management-as-service’ includes both digital and physical services. The digital service is offered through the part data management platform that is developed in the ReCiPSS project. This platform has made reman-specific data collection, storing and sharing significantly efficient. This has also improved significantly the availability of information that is necessary for core sorting and selection. For example, a procedure for deriving recommended actions for wholesalers to proactively manage their options (surcharge associated with core return) portfolio is established, which is a result of the transparency generated by the ICT platform. The platform has greatly impacted core management efficiency. As part of the physical service, cores now can be shipped directly from the workshops to the remanufacturers bypassing the complex trade levels and the right stakeholder in the trade level could be compensated. Furthermore, the core selection is now possible to be centralized and organized by skilled labours obsoleting the need for multiple core selections at each trade level. This also opened up the possibility for better bundling of cores and shortening the logistics routes.
As a support to the implementation of the demonstrators, the project has brought significant innovation in business models, product design and supply chains. Several product design methodologies and modelling and simulation tools have been developed which not only well-prepared the demonstrators for the pilot phase but also for the scale-up in the future.
Both demonstrators have challenged the status quo of their respective sectors. A fully-functioning pay-per-use offer by a major Original Equipment Manufacturer (OEM) with a clear strategy and capability to use the appliances for multiple life cycles is unique in the current linear economy. A well-designed business strategy that includes appliances that are built to last (15,000 cycles appliances vs 2500 cycles regular domestic appliances), integrated sensors that can monitor the usage data, operating conditions in real-time and IoT platform that connects OEM, customers and 3rd party service providers and refurbishment of the appliances are several puzzles in the transition to CMS. The White Goods demonstrator through the ReCiPSS project has shown how a successful transition can take place in a traditional sector that has operated for many decades in a linear system. The demonstrator is expected to generate revenue of approximately €91,700 – 147,800 per year and €65,600,000 – 105,700,000 per year if scaled up. Similarly, the demonstrator is expected to save 4 ton CO2 eq. in the demonstration phase with the potential to save 2,941 tons CO2 eq., if scaled up.
Similarly, the ‘core management-as-service’ offering that includes both digital and physical services is a breakthrough for the traditional reman business in the automotive sectors. Separating the economic incentive from the physical item, the possibility to bypass the trade levels in core transportation, single point core selections and a one-stop information management platform to collect all reman criteria by major Original Equipment Suppliers (OES) may sound trivial. These innovations have, in fact, changed the rules of the game of the automotive remanufacturing sector. All these innovations are made part of the automotive part data platform that is developed in the ReCiPSS project. The platform has enabled options tradeable among stakeholders opening up possibilities to source cores from the open market. Furthermore, the information regarding available options and the date of expiry has significantly reduced the financial risks for the wholesalers. Single-point core selection has reduced the core rejection rate significantly and eased the process of the payment of a surcharge to the right stakeholders at the right time. The single-point core selection also means better bundling of cores and the possibility to transport cores directly from the workshops, resulting in efficient logistics. All in all this has improved the quality, quantity and timing of core return to enable CMS.
The demonstrator has shown that a saving of approx. 70 % in transport costs per core can be achieved through efficient core selection and better bundling. This has led to cost savings of up to €500,000 during the demonstration phase which could be projected to €180,000,000 per year if scaled up. The demonstrator has also shown savings in CO2 emissions of up to 390 tons CO2 eq. during the demonstrator phase and 138,000 tons CO2 eq. per year if scaled up.
Similarly, the ‘core management-as-service’ offering that includes both digital and physical services is a breakthrough for the traditional reman business in the automotive sectors. Separating the economic incentive from the physical item, the possibility to bypass the trade levels in core transportation, single point core selections and a one-stop information management platform to collect all reman criteria by major Original Equipment Suppliers (OES) may sound trivial. These innovations have, in fact, changed the rules of the game of the automotive remanufacturing sector. All these innovations are made part of the automotive part data platform that is developed in the ReCiPSS project. The platform has enabled options tradeable among stakeholders opening up possibilities to source cores from the open market. Furthermore, the information regarding available options and the date of expiry has significantly reduced the financial risks for the wholesalers. Single-point core selection has reduced the core rejection rate significantly and eased the process of the payment of a surcharge to the right stakeholders at the right time. The single-point core selection also means better bundling of cores and the possibility to transport cores directly from the workshops, resulting in efficient logistics. All in all this has improved the quality, quantity and timing of core return to enable CMS.
The demonstrator has shown that a saving of approx. 70 % in transport costs per core can be achieved through efficient core selection and better bundling. This has led to cost savings of up to €500,000 during the demonstration phase which could be projected to €180,000,000 per year if scaled up. The demonstrator has also shown savings in CO2 emissions of up to 390 tons CO2 eq. during the demonstrator phase and 138,000 tons CO2 eq. per year if scaled up.