Supporting the ‘circular economy’

The infinite remanufacturing of everything taken from the ground or created is but one notion of the “circular economy”, says CIMdata’s Peter A. Bilello


Products and services must meet an increasingly wide range of requirements simultaneously. The additional requirements bring additional stakeholders, other than the purchaser or user whose needs must be addressed. With more criteria to meet, it makes sense to consider them as early in the development process as possible. The notion of concurrent engineering attempted to address many of those needs. Although in sharp contrast to the more commonly used waterfall product development approach, it too lacks the depth and breadth required in a complex global economy.

Over the last two decades, product lifecycle management (PLM) emerged as a strategy to support end-to-end product development; a more comprehensive approach to product development. Ideally, companies manage products from concept to retirement as part of their PLM strategy, with the objective to reduce environmental impact making sustainability a focus for most manufacturers. Unfortunately, many landfills are used at capacity, and many natural resources and toxins in products cannot be reused or recycled profitably and are wasted.

Many companies made great strides in design for disassembly and recycling of materials from many common products. PLM strategies and enabling solutions play a significant role in these successes. But what if we could have zero impact? What if everything taken from the ground or created could be infinitely reused, remanufactured and repurposed? This is but one notion of the “circular economy”, a radically new approach to thinking about most of what we do, build and use. Meeting this more stringent need will require new PLM enabling solutions and supporting services.

A fundamental principle of the circular economy is that products will be returned to manufacturers rather than going to landfills and scrap yards. This creates new flows of recyclables with extremely high values. A radically new dimension – the endless lifecycle – is emerging.

The PLM opportunity is to embed end-of-useful-life retrieval, refurbishment and upgrading into creating innovative new products and their supporting lifecycle processes

Many manufacturers are partly there already. They are under regulatory pressure to comply with the demands of RoHS (Restriction of Hazardous Substances), WEEE (Waste Electrical and Electronic Equipment), REACH (Registration, Evaluation, Authorisation and restriction of CHemicals), ELV (End of Life Vehicles) and other similar regulations. This is a start; however, the circular economy requires pushing beyond compliance to lifecycle stewardship to let manufacturers retain effective control of rare earths and other high-value resources. Necessary processes and systems need PLM enablement at an enterprise level. No manufacturer is there yet.

Capabilities for product stewardship mostly exist in engineering departments, but according to prospective norms of the circular economy, much of this capability is rudimentary. To develop next-generation products, their manufacturing, support and extended life processes, the emerging systems engineering approach will be indispensable.

In the circular economy, systems engineering evolves to tightly link everyone in every part of the product’s lifecycle. With rare exceptions, these linkages have yet to be achieved throughout extended enterprises.

Circular economy manufacturers will pay for return shipments of end-of-life products, increasing their concern with waste. Aside from the obvious – weight and durability – manufacturers will need to design products for modularity to simplify refurbishing and upgrading.

With the circular economy, manufacturers can benefit from recapturing a significant part of their products’ residual value. Reclaiming rare earths and other valuable product components present a unique opportunity to significantly reduce decapitalisation in scrap processing.

Tracking residual values, managing their intellectual property and enabling complete lifecycle-focused systems engineering are among the core capabilities of PLM. The PLM opportunity in the circular economy is to embed end-of-useful-life retrieval, refurbishment and upgrading into the tasks of creating innovative new products simultaneously with all their supporting lifecycle processes.

As this happens, PLM will again change the thinking of engineers, business leaders and individuals, regardless of where they work in the lifecycle. The levers of success in the circular economy can only be grasped in terms of the real, true and complete PLM.

Peter A. Bilello is president of CIMdata Inc, the US-based product lifecycle management consulting and research firm.