CANON: A Circular Economy Business Model Case

This report presents the case study of Canon’s EMEA business for Document Solutions (DS), with a focus on the business model for remanufacturing and refurbishment. It was chosen as it provided an example of a mature remanufacturing model, as well as potential for further circularity and business benefit through expansion of refurbishment activities. Canon EMEA has also been growing services such as Managed Print Service (MPS) – a service-based model for providing printer copiers – which, while not a focus of the case study, provides opportunities for both remanufacturing and refurbishment. Canon operates in a market which is currently in decline, with vendors competing intensely for market share. This is creating a stark contrast between a business model driven by new product sales, and one that emphasises the cultivation and reutilisation of existing deployed assets. In this context, it is important to emphasise that this case study focuses on the circular business models and potential for Canon EMEA, whose business is principally a combination of sales/marketing and service delivery. This is in contrast to Canon Inc. (Japan) who manufactures and supplies equipment for Canon EMEA to sell and integrate into its service offerings. This case study explores the opportunities, as well as enablers and barriers, to Canon expanding the role of remanufacturing and refurbishment within its circular business models. We believe this will have important positive implications for Canon given the broader strategic challenges it face

Remanufacturing and product design: designing for the 7th generation

The following is taken directly from the research report. This report investigates Design for Remanufacture in terms of both detailed product design and the business context in which Design for Remanufacture may operate. Key Study Objectives • To understand the link between design and remanufacture • To understand how Design for Remanufacture can lead to increased innovation and Sustainable Development (SD) • To identify proactive strategies to further Design for Remanufactur

Circular Return Strategies for the Indian Dairy Market

Background Companies producing premium products with high quality and long product life can experience challenges when trying to penetrate price-sensitive customer segments on emerging markets due to a high product price. One way to achieve growth in these segments is to introduce new innovative business models. From the theory of circular economy, a concept combining sustainable and economical growth, innovative circular business models exist. The question has been raised if these business models can be used to help durable premium products to reach price-sensitive customers on emerging markets. Purpose The purpose of the project is to develop a business model aiming to increase the case company’s market share of dairy processing components on the Indian market while maintaining their position as a high quality brand. Methodology The project is performed as a case study in collaboration with a case company and therefore the research approach is qualitative and the research purpose is exploratory. However a market analysis of the Indian market is conducted and for this reason the purpose is also descriptive. Secondary data regarding the theory behind circular economy and the Indian market is collected through an extensive literature review. Primary data is mostly gathered through a number of interviews with the case company’s employees providing insights to the case company’s operations on the Indian market and knowledge about their customer base. Conclusion The recommended circular return strategy for the case company includes the product return models leasing, trade-ins and products repurchase and product recovery by either refurbishing or remanufacturing are most suitable for the case company. Indications show that this business model is a possible way for the case company to take market shares on the Indian market. In particular, private Indian companies with medium to high capacity can be receptive for circular return strategies. Furthermore, it could give the case company a competitive advantage since no similar business models are currently used on the Indian dairy market. The availability of CIP components to recover is currently the largest obstacle from the customers’ point of view. However, before implementing of circular return strategies their suitability need to be evaluated from the company’s perspective and factors such as reversed logistics, organizational mindset and costs need to be taken into consideration

Understanding circular business models: drivers, obstacles and conditions towards a successful transition

Abstract A circular economy is an alternative to a traditional linear economy (make, use, dispose) in which resources are kept in use for as long as possible, value creation is maximized in the use phase and products and materials are recovered at the end of each service life. The thesis explores this concept by taking a business model perspective. The theoretical part of the thesis clarifies the phenomenon of circular economy. It summarizes the development of the concept from an historical perspective and clarifies its position with regards to existing contemporary concepts (biomimicry, industrial ecology, cradle to cradle, blue economy, performance economy). By taking a business model perspective on the concept, the thesis attempts to offers a first typology of circular business models. Through the field work, the thesis extends knowledge on the understanding of circular business models at practical level. It highlights the differences between the theoretical underpinnings of the concept (its principles) and its implementation, showing that there is a gap between the concept and the way companies implement it. The findings allow the author to discuss how circular business models are classified and shows that many hybrid circular approaches can emerge. The analysis of the common features of the cases allow the author to draw a first set of normative requirements that define how a circular business model is organized. The cross analysis of the cases supports the development of a framework highlighting the current drivers at internal and external level pushing company to operate within circular economy principles, addressing a set of conditions allowing for the successful implementation of circular business models, while acknowledging a number of recurrent challenges preventing from a full implementation of the concept. At the core of the framework is set of key steps explaining how the transition occurs

Integrating Closed-loop Supply Chains and Spare Parts Management at IBM

Ever more companies are recognizing the benefits of closed-loop supplychains that integrate product returns into business operations. IBMhas been among the pioneers seeking to unlock the value dormant inthese resources. We report on a project exploiting product returns asa source of spare parts. Key decisions include the choice of recoveryopportunities to use, the channel design, and the coordination ofalternative supply sources. We developed an analytic inventory controlmodel and a simulation model to address these issues. Our results showthat procurement cost savings largely outweigh reverse logistics costsand that information management is key to an efficient solution. Ourrecommendations provide a basis for significantly expanding the usageof the novel parts supply source, which allows for cutting procurementcosts.supply chain management;reverse logistics;product recovery;inventory management;service management

Supply planning for a closed loop system with uncertain demand and return

This proposed model considers a supply network consisting of a manufacturer, its external suppliers, and a remanufacturing facility. The manufacturer, facing an uncertain market demand and return, has two options for supplying parts: either ordering the required parts to external suppliers or remanufacturing used products and bringing those back to \u27as new\u27 conditions. We propose a general framework for this multi product, closed loop system and develop a non-linear programming (NLP) model to maximize the total expected profit by optimally deciding quantity of parts to be remanufactured and quantity of parts to be purchased from external suppliers. We solved the mathematical model using two different solution techniques to find optimal or near optimal solution values. With a numerical example we compared the results from both solution techniques and introduced sensitivity analysis to illustrate the interacting effects among critical parameters in the model

Remanufacturing and product design

This article is the result of long-standing research in eco-design, and builds directly on a report produced in 2007 for South East England Development Agency (SEEDA) on 'Remanufacturing and Production' and particularly 'Design for Remanufacturing' (DfR). Although DfR is an under-researched area, there is growing interest worldwide in 'cradle to cradle', 'closed loop' and 'circular economy' concepts, thinking and practice. While remanufacture has been a consideration of much of my research since the mid-1990s, not least within the areas of 'producer responsibility', legislation (such as the WEEE Directive) and eco-design, this article draws together a diverse body of research for the first time around this theme. Drawing on desk research, personal interviews and an expert workshop, undertaken as part of the aforementioned SEEDA project that I developed and led, the article focuses on DfR as a new business model that needs to incorporate a more holistic perspective, including design principles, reverse logistics, manufacturing, marketing and business strategy. On the basis of research undertaken through two DTI missions and an EC funded project concerned with eco-design, recycling, and electronics manufacture in Japan, China, Hong Kong and Taiwan, the paper argues that DfR is a strategic rather than an operational design concept, one that has been implemented successfully by only a few global leadership companies. As the senior researcher, I led the conception, structuring and writing of this paper based substantially on my personal research activities, previous reports and presentations in this area. My co-author provided specific details derived from desk research