Dynamic simulation methodology for implementing circular economy: A new case study

Purpose: Circular economy (CE) principles have evolved in response to natural resource depletion as a set of guidelines for eliminating the linear take-use-dispose model of product consumption. The consequences of shifting from a linear to a circular supply chain are difficult to visualize in the long term. This study aims to design a methodology for building a simulation model to implement CE strategies in any small and medium-sized enterprise SME to prove policies before implementing them in the real world. This paper applied the methodology in a biological cycle case study: a confectionery factory in Mexico. Design/methodology/approach: This study evaluated service-dominant logic, ecosystem services, system dynamics, and agent-based modeling to design the proposed methodology. A series of interviews with stakeholders were performed to assess the simulation model during the development phase. The circular economy indicator prototype (CEIP) was used as a circular maturity measure of the confectionery factory. The simulator was executed in Netlogo software, implementing a four-scenario analysis based on two CE policies for the caramel recycling process. Five state variables were proposed in this analysis: confectionery waste, recycled glucose, recycling utilization, costs of recycled glucose, and profit. Findings: The CEIP score of the confectionery factory was 52%, rated as a “good” product. Regarding scenario analysis, the first scenario had the highest profit improvement. Practical implications: The simulator allowed stakeholders to understand the operation of the recycling process and visualize all variables involved in the system. Originality/value: In the CE literature, little attention has been paid to proposing a methodology for designing a simulation model to implement CE strategies in any industry. Thus, this study implements a nine-step methodology based on services context and dynamic simulation tools to design a platform to evaluate and visualize the consequences of CE strategies implementation in the long termPeer Reviewe

Supply and demand chain management: The effect of adding services to product offerings

Purpose: The purpose of this paper is to understand how firms manage their product and service offerings, integrating supply chain management (SCM) and demand chain management (DCM) strategies. Adding services to the product portfolio of a firm may bring benefits to an organisation, but requires a reconsideration of the supply chain management approach. Design/methodology/approach: A survey is used to collect data, with valid questionnaires obtained for 4,227 UK-based respondents. Empirical analysis utilises structural equation modelling (SEM). Findings: The paper proposes that a combination of management approaches is required by firms which add services to their portfolio of traditional product offerings. A supply chain management approach may be suitable for traditional product offerings. The management of the services value chain, where the customers' role as value creator is a central feature of the construct, is better served by integration of the market orientation of DCM. Originality/value: The paper addresses a research gap related to the shift in traditional activities carried out by a firm moving from purely product to a product service offer and reconsiders the supply and demand chain management approach. The paper is from a Business to Consumer (B2C) perspective. In this context, the work pioneers analysis into a particular case where a firm's product and service offerings may be substitutes for each other in the eyes of the customer. © Emerald Group Publishing Limited

New Business Models for the Reuse of Secondary Resources from WEEEs

This open access book summarizes research being pursued within the FENIX project, funded by the EU community under the H2020 programme, the goal of which is to design a new product service paradigm able to promote innovative business models, to open added value to the vessels and to create new market segments. It experiments and validates its approach on three new concepts of added-value specialized vessels able to run requested services for several maritime sectors in the most effective, efficient, economic valuable and eco-friendly way. The three vessels share the same lean design methodology, IoT tools and HPC simulation strategy: a lean fact-based design model approach, which combines real operative data at sea with lean methodology, to support the development and implementation of the vessel concepts; IT customized tools to enable the acquisition, processing and usage of on board and local weather data, through an IoT platform, to provide business services to different stakeholders; HPC simulation, providing a virtual towing tank environment, for early vessel design improvement and testing. The book demonstrates that an integrated LCC analysis and LCC strategy to guarantee sustainability to vessels concepts and the proper environmental attention inside the maritime industry

Designing Smart Services: A System Dynamics-Based Business Modeling Method for IoT-Enabled Maintenance Services

This paper reports on a design science research project aiming to develop a method to support business decision-making regarding IoT-enabled maintenance services for Original Equipment Manufacturers (OEMs). Often, these OEMs remain reluctant to make full use of recent advances in the Internet of Things (IoT), sensor technologies and data analytics for providing services on installed equipment with Asset Owners (AOs). These new developments allow them to advance on their servitization journeys from selling products to selling product-centered services. The method is based on System dynamics (SD), a powerful modeling methodology to capture all these complexities in an integral, coherent and visible manner with all stakeholders. It also allows for a quantitative analysis of the business case for “smart maintenance services”. The paper describes servitization, smart (i.e. digitally enabled) mainte-nance services and then the method itself. A case study illustrates the application of the method for an OEM in the semiconductor industry

BUILDING TRUST FOR SERVICE ASSESSMENT IN INTERNET-ENABLED COLLABORATIVE PRODUCT DESIGN & REALIZATION ENVIRONMENTS

Reducing costs, increasing speed and leveraging the intelligence of partners involved during product design processes are important benefits of Internet-enabled collaborative product design and realization environments. The options for cost-effective product design, re-design or improvement are at their peak during the early stages of the design process and designers can collaborate with suppliers, manufacturers and other relevant contributors to acquire a better understanding of associated costs and product viability. Collaboration is by no means a new paradigm. However, companies have found distrust of collaborative partners to be the most intractable obstacle to collaborative commerce and Internet-enabled business especially in intellectual property environments, which handle propriety data on a constant basis. This problem is also reinforced in collaborative environments that are distributed in nature. Thus trust is the main driver or enabler of successful collaborative efforts or transactions in Internet-enabled product design environments. Focus is on analyzing the problem of ¡®trust for services¡¯ in distributed collaborative service provider assessment and selection, concentrating on characteristics specific to electronic product design (e-Design) environments. Current tools for such collaborative partner/provider assessment are inadequate or non-existent and researching network, user, communication and service trust problems, which hinder the growth and acceptance of true collaboration in product design, can foster new frontiers in manufacturing, business and technology. Trust and its associated issues within the context of a secure Internet-enabled product design & realization platform is a multifaceted and complex problem, which demands a strategic approach crossing disciplinary boundaries. A Design Environment Trust Service (DETS) framework is proposed to incorporate trust for services in product design environments based on client specified (or default) criteria. This involves the analysis of validated network (objective) data and non-network (subjective) data and the use of Multi Criteria Decision Making (MCDM) methodology for the selection of the most efficient service provision alternative through the minimization of distance from a specified ideal point and interpreted as a Dynamic (Design) Trust Index (DTI) or rank. Hence, the service requestor is provided with a quantifiable degree of belief to mitigate information asymmetry and enable knowledgeable decision-making regarding trustworthy service provision in a distributed environment

New Business Models for the Reuse of Secondary Resources from WEEEs

This open access book summarizes research being pursued within the FENIX project, funded by the EU community under the H2020 programme, the goal of which is to design a new product service paradigm able to promote innovative business models, to open added value to the vessels and to create new market segments. It experiments and validates its approach on three new concepts of added-value specialized vessels able to run requested services for several maritime sectors in the most effective, efficient, economic valuable and eco-friendly way. The three vessels share the same lean design methodology, IoT tools and HPC simulation strategy: a lean fact-based design model approach, which combines real operative data at sea with lean methodology, to support the development and implementation of the vessel concepts; IT customized tools to enable the acquisition, processing and usage of on board and local weather data, through an IoT platform, to provide business services to different stakeholders; HPC simulation, providing a virtual towing tank environment, for early vessel design improvement and testing. The book demonstrates that an integrated LCC analysis and LCC strategy to guarantee sustainability to vessels concepts and the proper environmental attention inside the maritime industry

Enhanced circularity in aftermarkets: logistics tradeoffs

Purpose: The purpose of this paper is to identify requirements and tradeoffs on logistics services for enhanced circularity of materials and resources. Design/methodology/approach: Based on multiple case study design and abductive reasoning, the study investigates 13 different product categories. The data were analyzed based on theoretical, a priori codes from the literature review. Inductive, emerging codes were added to the coding scheme during the analysis. Findings: Requirements of logistics services to support slowing of resource flows are categorized with respect to initiator, location of the service, single or multiple actors, and transportation of parts, products and people. Moreover, the study identifies new logistics tradeoffs: material and people, knowledge and people, and information and knowledge. Transportation of product, people and parts can be reduced by increasing local knowledge and improve information sharing. Research limitations/implications: This review contributes to the understanding of the relationship between logistics services and enhancement of circularity by highlighting requirements on logistics services in the aftermarket supply chain that support slowing of resource flows. To enhance circularity, logistics services must extend the traditional material information flow with the flow of people and knowledge, respectively. Practical implications: The categorization provides practitioners and researchers with an overview of requirements and tradeoffs on logistics services to enhance circularity of a particular circular cycle. The implications will provide an opportunity to address environmental impact of transportation and improve the utilization of scarce materials. Social implications: Variety of tradeoffs in logistics services can enhance slowing and hence circularity of scarce materials. Originality/value: First, the authors illustrate how traditional tradeoffs in logistics such as flow of materials, resources and people need to be addressed to enhance circularity through slowing. Second, the authors identify two new tradeoffs in logistics services: knowledge flow and degree of customer involvement

Motivations for servitization: the impact of product complexity

Purpose To identify the commonalities and differences in manufacturers’ motivations to servitize. Design/methodology/approach UK study based on interviews with 40 managers in 25 companies in 12 sectors. Using the concept of product complexity, sectors were grouped using the Complex Products and Systems (CoPS) typology: non-complex products, complex products, and systems. Findings Motivations to servitize were categorised as competitive, demand-based (i.e., derived from the customer) or economic. Motivations to servitize vary according to product complexity, although cost savings and improved service quality appear important demand-based motivations for all manufacturers. Non-complex product manufacturers also focus on services to help product differentiation. For CoPS manufacturers, both risk reduction and developing a new revenue stream were important motivations. For uniquely complex product manufacturers, stabilising revenue and increased profitability were strong motivations. For uniquely systems manufacturers, customers sought business transformation, whilst new service business models were also identified. Research limitations/implications Using the CoPS typology, this study delineates motivations to servitize by sector. The findings show varying motivations to servitize as product complexity increases, although some motivational commonality existed across all groups. Manufacturers may have products of differing complexity within their portfolio. To overcome this limitation the unit of analysis was the SBU. Practical implications Managers can reflect on and benchmark their motivation for, and opportunities from, servitization, by considering product complexity. Originality/value The first study to categorise servitization motivations by product complexity. Identifying that some customers of systems manufacturers seek business transformation through outsourcing

Technology-based Product-services for Supporting Frugal Innovation

In recent years, European manufacturing companies are gradually applying innovative PSS (Product Service Systems), as strategic opportunity for differentiating from competitors, offering an integrated bundle of products and services, targeted on specific needs of different customers. At the same time, frugal innovation has also surged as a new business concept based upon an intelligent use of resources to fulfill region-dependent customers' needs. Both approaches bring forth rethinking of established business models, which in turn asks for an in-depth analysis of the implications on the company organization and infrastructure, at supply chain and plant levels, urging towards manufacturing networks and reconfigurable assembly lines. This paper presents a formalized framework to support product-service design and the related business model characterization, in the context of frugal innovation. The methodology is applied to three real industrial scenarios respectively in the aeronautics, the domestic appliances and the machinery industry, which are analyzed within the framework of the H2020 European funded project 'ProRegio'