Industrial EquipmentAugust 1, 2023

Manufacturing industrial equipment for the circular economy

Amid material shortages, supply chain disruptions and increasing sustainability regulations, Industrial Equipment manufacturers must seek new ways of developing and managing the equipment they make.The circular economy presents an opportunity to reimagine the  way they do business for the better.
Avatar Andrea CAGNIN

Every year, industrial equipment manufacturers consume more than 3.6 billion metric tons of raw materials – and growing. What’s more is that many of the metal ores and minerals they need to make today’s machinery and equipment are rare and, in some cases, reaching critical levels. Policy makers acknowledge that the linear “take-make-waste” model most industries rely on today is worsening the issue. Extracting finite resources and simply discarding them at the end of a product’s lifespan is not only hugely wasteful but contributes to rising carbon emissions and environmental degradation. If we are to build a more sustainable future, we must transition to a circular economy. Some in the industry refer to it as “remanufacturing.”

In a report on critical raw materials and the circular economy, the European Union (EU) raised concerns about protecting the supply of highly sought after resources and proposed the circular economy as a solution, where “the value of products, minerals and resources is maintained in the economy for as long as possible and the generation of waste is minimized.”

For Industrial Equipment manufacturers, this involves reducing, reusing, recycling and recovering both in terms of how they design and manufacture industrial equipment as well as how they sell, operate and manage it throughout its lifecycle, including its end of life. Embracing circular economy principles not only presents a new way of developing products; it’s an entirely new way of doing business. Done right,  they can protect in-demand, precious resources, significantly reduce their carbon impact and open up profitable new revenue streams.

Why should Industrial Equipment manufacturers embrace the circular economy?

Circular manufacturing is fast becoming mandatory. Amidst material shortages, escalating costs, disrupted supply chains and increasing regulations, manufacturers face growing pressure to weigh up the true cost of making one-time use goods.

Industry regulators and end customers are now interested in the total carbon footprint associated with producing, operating and maintaining industrial equipment. They want to know how it’s manufactured today, how it’s maintained, how its lifecycle can be extended and then how it can be modified and remanufactured in the years to come.  

Measures such as the European Green Deal and the Circular Economy Action Plan reinforce the idea of widening manufacturers’ responsibilities and decoupling economic growth from resource use. These new policies aim to stimulate new circular approaches to production, consumption and end-of-life management.

In future, we can expect revenue to become far more closely linked to equipment usage rather than volume of assets sold. Business models such as equipment as a service (EaaS) will become intrinsically linked to the circular economy as the focus shifts to extending equipment lifecycles, making incremental upgrades to reduce total cost of ownership, continually improving overall equipment effectiveness and avoiding waste.

Key business benefits of the circular economy

Industrial Equipment manufacturers that have already adopted circular economy principles report better brand reputation (80%), increased innovation (79%), and enhanced regulatory compliance (78%).

In many ways, the measures they take to become circular, such as improving visibility across the value chain, recycling and reusing materials, eco-design, first-time-right manufacturing and effective waste management, can have a significant positive impact across their business that goes far beyond meeting the latest sustainability regulations. This includes the ability to:

  • Reduce costs
  • Increase revenue
  • Boost resilience
  • Lower compliance risk
  • Enhance competitive edge.

Waste management and the circular economy

For many, the first step to the circular economy will involve developing an effective waste management strategy for handling assets that have reached their end of life. To do that, manufacturers must understand exactly what each asset contains, including hazardous waste, know how to dismantle it and how to recover parts.

Just as theIndustrial Equipment industry now widely relies on the engineering bill of materials (BOM) and manufacturing BOM to keep track of all components and subassemblies throughout product development, so too will it increasingly take advantage of the service BOM and, eventually, the disassembly BOM to manage assets through their operational phase to end of life. The disassembly BOM will allow them to trace all hazardous materials and precious resources, properly dismantle parts and determine how everything should be recycled and reused.

Circle Economy reported that increasing the recycled content of the various materials used in wind turbines, including using waste from other industries, would lead to a 9.8% increase in circularity.

To get started, Forbes recommends that Industrial Equipmentcompanies prioritize which machines and components to reuse based on product value and carbon emissions saved.

“Calculations include the cost of materials, components, and production, along with depreciation and lifetime energy usage,” said the Forbes article. “Manufacturers that buy back certain products from their distributors can disassemble the returned machines, clean up designated high-value parts, and upgrade the component’s capabilities for reuse in advanced releases.”

How the 3DEXPERIENCE platform supports circular innovation

Successfully implementing a circular economy approach centers on achieving transparency across the value chain, and that ultimately involves breaking down the siloes between manufacturers’ different departments, as well as with their suppliers and other key stakeholders. To overcome this information disconnect, manufacturers are moving their operations to a single technology platform such as the 3DEXPERIENCE platform. Achieving a seamless data flow from one stage to the next, they can embed sustainability into new products from the early design and engineering stage, optimize production lines and plants, and support effective decision-making throughout the entire product lifecycle.

  • Thermoset plastic components manufacturer JAKSCHE Technology is actively engaged in the production of ecological, economical and recyclable plastic solutions in a low-carbon, circular economy era. In its latest R&D projects, JAKSCHE uses the 3DEXPERIENCE platform to build a library of new materials and document all their qualities and use cases. So, if a customer wants to switch from a plastic to a flax fiber part, it has all the information it needs surrounding that particular part.
  • US-based technical ceramics manufacturer CoorsTek takes advantage of the 3DEXPERIENCE platform to improve product quality and reduce waste on the production floor. It now has the information it needs to understand why ceramic scrap is produced, and by having common scrap codes within the system, it can better analyze and improve specific areas where it’s producing scrap across its operation.

The 3DEXPERIENCE platform is a fantastic base on which to build a circular business. It delivers all the functionality manufacturers need to measure their environmental impact, reduce raw materials through additive manufacturing and material innovation, embrace modular design, optimize production, and manage and track each asset via a true virtual twin all the way through to disassembly. Centralized data management and sophisticated predictive tools support manufacturers to forecast spare parts and needs, and reduce inventory stock and waste. In many ways, it’s a complete solution for managing the direct and indirect impact of industrial equipment on the environment and closing the circularity gap.

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