What can circular economy do for our industries ?

 « Industries are aware of raw materials battle is a competitiveness and market sustainability battle»

Nowadays, a crisis is a popular word in business in spites of its despicable meaning, something like human depression in modern society. Economic disruptions are more and more often on G7 countries and it is a sign that shows how fragile our economic system is. The largest nations of Eurozone and even the United-States have been victims of an economic system called “linear economy” that has been in place since industrial revolution and that is ineffective considering our new realities.

Instability atmosphere is breathed in the globe. This Air has been even blown up to manufacturer sector in Canada. Situation that may perturb companies’ leaders since it could represent the loss of international and local markets. A proof of competitive downturn is the fact that out of the four strongest industrial sectors which are paper, food, transport equipment and metal transformation, the only one poke its head out of water in terms of growth is food industry with a timid 1.9% from 2007 to 2012.

Present context requires new dynamics to deal with resources shortage. Could it be possible to make profits by strategies other than selling more products? The answer is positive. Industrial parks have tremendous advantage such as geographic proximity that allows a variety of tactical associations “pooling and sharing” that could represent economical savings. Just to mention some of them: material and resources exchanges, water and waste treatment, energy consumption etc.

Several industrial parks in China, Japan, Germany, Denmark and other countries took a step forward to transform them into Ecozones. For instance, TEDA’s park locate in Tianjin at north shore of Chine is attracting a number of international investors by a magnificence annually growth of 20-30% and it became the most important industrial hub in the country. As a matter of fact, TEDA believes that infinitive natural resources is a fairy tales and it is investing in new models that allow them to save 1 034 t of raw materials, 108t of fuel, 2 340 m3 of natural gas, 1191t of steam, 5 978 700 kWh and 244 200 m3 energy and water savings. Non-negligible savings bring 1 million euros in their pockets.

Circular economy is a multiple option model that makes it possible for a traditional park to become an eco-zone. Main objectives are to optimise resources use by internal or external way. TEDA is a typical example of internal approach. When it comes to external one, we talk about costumers’ loyalty strategies. The method for retaining costumers related to selling services instead of products for instance big players of divers industries are giving a try. Michelin sells kilometers driven rather than tires; Xerox copies no printers and Philips lighting hours no lamps.

Conversion towards circular economy that requires R&D investments but it is a profitable process in long-term. If you are looking for business perenniality I guess It will desirable to be protected of price volatility, disruption of supply due to shortage. In addition companies could assure costumers’ loyalty, reduction of dissipative energy loss, decarbonizing energy and indirectly operation costs could be reduce if the service mutualisation are in place

Circular economy is just an emerging concept in Canada. Slowly, industries became interested. An example, cement fabrication sector is extensibly involved with these new practices Lafarge, Holcim and Cements Quebec are using alternative carburant from waste to replace fossil energy that is costly and pollutant. Double gain : become more competitive by reducing operational costs and environmental aware by preventing air emission from fossil carburant.

Is your company considering a circular economy project?

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Circular Economy, why Canada should try this model?

Inspired from an interesting article that connects two different country realities China’s Disastrous Pollution Problem Is a Lesson for Canada

With almost 10 million km2 of surface Canada occupies the second place in the top countries in the world even before Yankees country and The Great Wall nation, but when it comes to population its impressive to see how few people live in the maple flag country, it is 11% of United states population and only 0.26% of Chinese one. There is nothing new in statement above, what is really impressive is that Canada conquers also the top ranking place on pollution matters as well, it seems like we enjoy being on top.

2014 record year for e-waste, close to 42 million tons world total generation. Avg Canadian consumption is around 19 kg. Souce: Journal les Affaires (2015, April 25th) “Année record pour les déchets électroniques”

Despite a small population and good access to natural resources, Canada is located on 9 ^th position[1] of top 10 greenhouse gases emitters that generates 70% of global GHG emissions. Statistics is an amazing describing tool and  some human kind could say that Canada generates only 2% of world total emission of GHG but when it comes to emission per capita it is Canada at the very top of the list (24, 5 t CO2 per capita) which is almost four times of world average. One word to explain this gap phenomenon is simply known as “overconsumption”

Individual actions could reduce pollution but a country strategic business plan could definitively make a great difference reversing fatal effects of past choices.  Circular Economy is a powerful tool that allows sustainable benefits by adopting a revolutionary economic system. In order to understand Circular Economy, let’s describe the current linear economy as a model based on extraction-production-consumption and dismissal that is no longer suitable for a limited natural resources planet as ours. Then Circular Economy is “an economical concept that promotes loop good production that avoids waste in all levels material, water and energy sources”. “Waste” is called secondary raw material that will integrate the product loop that generates it or used in other process to be part of another product, as a cogeneration input or energy recovery at last.

Chine as a potential emerging superpower has experienced an explosive growth in the past decades and as a consequence raw material issue occurred. China decided to seek Circular Economy expertise in order to fight raw material shortage and improve international competiveness. It could not be a better moment than now for Canada to develop a circular economy model considering internal realities before natural resources shortage, lost on business performance or pollution borne diseases hit seriously our greater country.  It is time to lead the change that will occurred anyways instead of missing the train by continuing to build a country future relying on conventional industries that are not profitable in long term and that are polluting our precious nature.

Waste is a waste only if you waste it!

Is your company considering a circular economy project?

Contact us toll free : 1 833-280-2828

Circular economy can be overwhelming

“Change is hard at the beginning, messy in the middle and gorgeous at the end” Robin Sharma

Adult life brings us new challenges  and one of the is “changes vs habits”,  I guess in a human mind there is always a battle between these two elements due to there is a natural tendency to the well-known “comfort zone”. Nice moment of reflection and now back to what it matters to us to put into perspective some elements of circular economy and change management process in order to obtain the expected good results.

Organisational transformation is a complex process that requires preparation as shown in a changing management process. Here besides there is a change method on 5 steps. All steps are mandatory in order to achieve the goal of transforming old habits into a new way of thinking.

Depending on the complexity of the change, more time will be required on early stages start-up and planning in order to be prepared for questioning and reluctance that the project can face during delivery stage.

Reconversion project towards circular economy of a traditional company is a eenormous challenge for human resources because it implies a new way of doing business. As in any changing process recipe vision, good attitude  and follow up would come out in smelly and attractive results. As a project leader, you understand well needs and reasons for the change but your team may ignore motivation for the company to head to new horizons and there is where planning  becomes  critical in organisation structure in order to put all team players in the same page.

Preparing an innovative coaching program may be necessary to overcome the biggest obstacle for the process “fear to unknown” that includes formulating a vision, mobilizing all actors and motivating the keys ones to lead small groups and once the knowledge is transmitted, supporting teams is essential to reinforce mentality changes and maintaining new habits in the organisation.

According to a 5 steps of circular economy implementation by Remi Le Moigne, the important stages are : developing new business models, creating partnerships, originate new circular products, conceive a reverse supply chain and manage performance. Those steps can follow change management procedure above explain as shown in the diagram displayed on the right.

Circular economy is a process that requires competent leaders with a clear vision of this new model and quite sometime to change corporate atmosphere to advance rapidly to a new business age before competitors take over. Magnificent change that creates a consciousness of shortage in natural resources while making business more thriving and sustainable.

Is your company considering a circular economy project?

Contact us toll free : 1 833-280-2828

Turbulence is blowing off air transport industry to circular economy

While thinking about my new blog subject I bump into a turbulent territory Air transport industry. As we all know this sector has been through a decade-long recession and there is a lesson for all manufacturing sectors…

Crisis makes you develop out-of-box solutions, a bit like when do-or-die situation.

Aggressive competition focus on low prices and volatile fuel costs that affects dramatically airline companies’ stability. The reason of that is related to its robust structure and the fact that fuel is an important feature that can represent up to 60% of all costing. Downsizing, companies merge, high-tech materials to light up aircraft have been some of defensive strategies to avoid bankruptcy.

After optimizing process and protecting company by business strategies, there is a non conventional direction they found which is checking on the scrap and on maintenance hangars. Even though, aviation is a highly regulated sector notably on aircraft components, a tremendous tear down segment has merged to enforce profitability of second-hand aftermarket over original equipment manufacturers  and the gap is up to 5% over last decade.

Almost 70% of an end-life aircraft can be recovered by repairing parts and recycling material mostly metals. Aeroxchange in UK and Partsbase are controlling the European and North American MRO maintenance, repairing and overhaul markets and growing rapidly with over 12% of profits in 2012 compering to 2011. However, there is a 30% that is sent to disposal which is really representative considering that 600 aircrafts must be disassembled every year for the following 20 years.

A key factor in the equation to reminding in the aircraft market will be definitely reducing costs all over the life cycle of an aircraft which is around 25-35 years. That is where we realize that a traditional linear economy that promotes “extraction-production-consumption and waste” is no longer profitable for industry leaders that struggle in a high competitive market.

Nowadays, circular economy is a global practice that is explored by its components for instance, eco-design that consider that 80% of impacts of an aircraft is established at early stages of conception, energy savings and transfer to green ones to lift up advantage over other airlines because 40-60% of costs are related to fuel (taken from an article “aviation du futur” by Hèlene V. Gagnon, Bombardier, Novae, July 2012)

To win contracts to build a portion of the 12 000 airplanes that will be in demand during the next two decades, Aircraft builders understood that key factors of success will be high performance in fuel, design for dismantling, reduce frequency and time of maintenance and control life cycle to reduce internal cost.

To optimize the 30% of dump disposal of an end life airplane and deal with new composite materials with a new perspective, Second Cycle is willing to complete efforts of a local company that is developing an expertise on tear down market in Canada.

Is your company considering a circular economy project?

Contact us toll free : 1 833-280-2828