PHILIPP BUDDEMEIER BRATISLAVA, NOVEMBER 6 TH , 2017 REDEFINING COMPETITI- VENESS THROUGH THE CIRCULAR ECONOMY
TODAY’S PRACTICES ARE VERY WASTEFUL AT ANY GIVEN MOMENT , $7 TRILLION WORTH OF PASSENGER CARS SIT IDLE AROUND THE WORLD
PIONEERS SHOW WHAT IS POSSIBLE PLENTY YIELDS UP TO 350X 350X MORE PRODUCE PER AREA THAN CONVENTIONAL F ARMS USING 99% LESS WATER
FIVE BUSINESS MODELS OF THE CIRCULAR ECONOMY CIR CIRCU CULAR LAR SUPP SUPPLY-CH CHAIN AIN PRODU PR ODUCT CT LIF LIFE-EXT EXTENS ENSION ION COMBINED IMPACT OF THESE MODELS AT $4.5 TRILLION SHAR SHARIN ING G PL PLATF TFOR ORM BY 2030 PROD PR ODUC UCT T AS A AS A SE SERVIC VICE RECO RECOVER VERY Y & R & RECY ECYCLIN CLING
$400 $400-600 600 BN BN ADD’L REVENUES IN 2030 THROUGH CE 4-6% P .A. GROWTH FOR REMAN AND 1.5-2.5% P .A. FOR MAINTENANCE 2.0 => $255- 300BN IN 2030 FOR “PRODUCT LIFE EXTENSION” Assembly Distribution Component Manufacturing Remanufacturing 2.0 Material Processing Resell / Reuse / Sharing Product as a Product Design Use Phase Refurbish Maintenance 2.0 Platform 1 Service 2 Recycled Circular materials, byproducts Other loops Materials Closed-loop recycling Other loops Repurpose P .A. GROWTH RA TE FROM INITIALL Y 30%, TOWARDS 10% Recycling & energetic => $140-280BN IN 2030 FOR PRODUCT AS A SERVICE AND Collection recovery Waste (minimize) (eliminate) $5-20BN IN COMMISSION FOR SHARING PLA TFORMS Legend: Circular Economy value chain Linear value chain Circular Supply Chain Product Life Extension Sharing Platform Recovery & Recycling Product as a Service Source: Accenture Strategy analysis; 1 – peer-to-peer car and ride sharing; 2 – entails mainly car and ride sharing (mobility) as a service, can also be for components etc.
MAJOR CHALLENGES TO SCALE CE PERSIST CHALLENGES TOWARDS A CIRCULAR COMP ANY Business case: Total cost/value of ownership perspective is missing Silo structures: Functional orientation prevents cross-functional CIRCULAR antage ge solutions and ecosystem-driven innovation ECOSYSTEM Advanta Legacy: Existing units “kill off” Circular Economy disruption cular Adv Circular CIRCULAR CHALLENGES TOWARDS A CIRCULAR ECOSYSTEM COMPANY Cir Ecosystem: Few partnering options Adoption Adoption: Costumers are locked into linear assets and value chains Regulation: Policy frameworks have not yet created a CIRCULAR “level playing field” for Circular Economy solutions PILOTS Trans Trans ansfor ansfor orma orma mation mation tion tion 6
BUT CIRCULAR LEADERS ARE EMERGING CASE EXAMPLE #1: TRANSFORMING THE PROCUREMENT ORGANIZATION OF A MULTINATIONAL Main elements of the success 5 year vision: Targeting Circular value creation over CIRCULAR ge antage a 5 year horizon ECOSYSTEM Advanta Changing the organization: Re-organizing the procurement organization around strategic resource cular Adv CASE EXAMPLE #2: cycles Consumer pull: Engaging consumers and building CASCADING MATERIAL WASTES ACROSS VALUE Circular CIRCULAR CHAIN P ARTNERS brand equity COMPANY Main elements of the success Cir Systematic: Screening of large number of potential partners for material re-use using a structured assessment process CIRCULAR Long-term win-win: Providing circular solutions, PILOTS contractual certainty and commercial benefits for both partners Branding: Using the positive brand association and innovation potential of the waste originator Trans Trans ansfor ansfor orma orma mation mation tion tion 7
THANK YOU Contact: Philipp Buddemeier Philipp.Buddemeier@Accenture.com @P_Buddemeier 8
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