Creating the Circular Economy, Part I

Or, putting some wheels on the Ricoh comet circle…

The end of my last article, I spoke of the need to do a better job of communicating just what sustainability is. That is, of course, one of the objectives of these articles – or at least as it applies to manufacturing, design and all things related to product creation and production.

An early concept introduced way back in September 2009 was the circular nature of sustainability as practiced in society represented by the Ricoh Comet Circle reproduced here below.

The circle diagram visualizes nested loops of tight or loose linkage between the consumer and the forward and reverse supply chain. The forward loop is from material extraction through production to delivery and use. The reverse loop (at the bottom of the comet) is after the consumer is done with the product and winds back through recycling, recovery, and return to material supply chain. Usually when a green supply chain is mentioned it is in the context of the return loop – resource recovery. That is only half the battle and, if the forward loop is done correctly, is much easier.

The nested loops start with the consumer as “the comet’s core” and can be you or me at home, or a company buying something (machinery, paper, electronic components) and the loops represent “the comet’s tail.” A key idea of the comet circle is that the closer to the consumer that the circle loops, the more sustainable/green is the scenario.

I use this image in my sustainable manufacturing class as well as in other presentations to illustrate the circularity concept of material/product use and reuse as higher valued than destruction and disposal.

As part of the earlier article about the comet circle the strategy behind the creation of the circle was summarized from Ricoh as:

1) Including the identification and reduction of environmental impact at all stages (Japanese continuous improvement at its best and key to identifying elements of the operation that need to be identified, quantified, and reduced, eliminated or otherwise offset).

This places priority on “inner loop” recycling, the highest value resources are those either returned, after repair/upgrade, to the consumer or converted into product and used by their customers along with  minimizing the resources, cost, energy needed to return a used product to “the state of highest economic value.”

2) Instituting a multi-tiered recycling program (reduce the consumption of new resources and generation of waste)

3) Creating a more economically rational recycling system. This is important and is part of establishing the business motivation for green manufacturing, including the original production stages in the equation. That is, the “green supply chain.”

4) Establishing a partnership at every stage of the supply chain. This partnership discloses materials used in production and in the product, transportation alternatives, etc.

To quote from Ricoh on the logic represented here: “A sustainable society must also establish a recycling system in which products and money flow in opposite directions in both post-product-use stages and original production and marketing stages.” At the same time, it is important to establish a social system that helps people to be aware of environmentally-friendly business activities and buy products with less environmental impact.

Flows of money and products at both the incoming side and the outgoing side of product use and social systems that influence customers’ awareness and buying preferences – that’s novel and the combination drives business strategy.

More recently this concept is referred to (or at last popularized) as the “circular economy.” I am not sure which came first. The easy source of all information (buyer beware) – Wikipedia – indicates that it might trace to a book by Walter R. Stahel and Geneviève Reday-Mulvey in 1981 titled, Jobs for Tomorrow, the potential for substituting manpower for energy, and published by Vantage Press. The book was based on a report for the European Commission on the potential for the service-life extension of goods as a sustainable strategy to create jobs, save energy (and GHG emissions) and prevent waste. The micro and macro level analysis was done to two sectors, automobiles and buildings, in France. There is more history on this on the Product-Life.org website under circular economy.

Stahel’s work generally proposed four major goals: product-life extension, long-life goods, reconditioning activities and waste prevention. It also promoted the importance of selling services rather that products when possible. There will be more on this early work in following postings.

The Ricoh Comet Circle was likely motivated by this. And, of course, the Cradle to Cradle book by Braungart and McDonough is an outgrowth of this thinking as well.

But there is more history to this!

The concept of “full circles” animates many early philosophical and religious thinking. I heard an individual recently at a meeting refer to the Hindu teachings of full circle or full cycle (Sa?s?ra) and the repeating cycles of birth, life and death (reincarnation) goes a long way back.

More recently, the  Ellen Macarthur Foundation and, McKinsey building on the Macarthur Foundation work, have been detailing business aspects of implementing the circular economy. The thesis is to move away from the “take, make, dispose” system and replacing it with restoration.

The image below, from a McKinsey Quarterly Report, No. 1, 2014 titled “Shaping the Future of Manufacturing” as part of a section on “Remaking the industrial economy”  illustrates how, in a circular economy, products are designed to enable “cycles of disassembly and reuse” and thus reducing or eliminating waste. You may want to click on the image to get a larger view.

There is a comparison between these cycles in biological-based materials on the left of the illustration and “technical materials” on the right side. At the bottom of the illustration are notes about minimizing “leakage” – the loss of opportunities to re-use materials before returning to soil for biological materials and landfilled/burned for technical materials.

The loops in the illustration (for example, on the technical material side, of maintenance, re-use/redistribute, refurbish/remanufacture, etc.) mimic the loops in the comet circle.

As with green manufacturing, this is a concept that is logical and possible to illustrate schematically but can be challenging to actually implement in practice – that is, to put some wheels on the concept so we can move with it!

I’ll do more with this in my next article, Part II of Creating the Circular Economy.