Developing products for a circular economy

Developing products for a circular economy

Cross-functional collaboration and customer-focused design thinking can help companies reap more value from the energy and resources they use
• When a consumer uses a product infrequently or discards it because it has worn out, at least some of the energy and material that went into making the product has been wasted.
• Some businesses are using circular-economy principles to create products that are durable, easy to reuse or recycle—and profitable
Two tactics can help:
1. Devising a highly collaborative product-development process that both accounts for and helps to determine sourcing requirements, production methods, marketing, sales, and other aspects of how goods are made and how they are handled at the end of their lives.
2. Use design thinking, which can help companies discover unexpected ways of meeting customers’ needs with much greater resource efficiency than in the past.
How collaboration helps companies develop circular economy products
The idea of a circular economy- a company would look at how it might manage the entire life cycle of its products in order to maximize the value of them and their component materials.
Circular-economy principles:
• Seen at work today in the mobile-phone sector
• They collect these phones, fix them, install fresh software, and sell them, especially in markets where many people cannot afford or do not need the latest models.
Developing a product that a company can manage over its life cycle requires more collaboration than is customary. Product design has to be conducive to:
• Reuse
• Repair
• Recycling
Company’s need processes and systems to help customers when products wear out, approach obsolescence, fail, or no longer provide satisfaction.
All departments and organizations need to have a say in product development:
• Procurement
• Marketing
• Sales
• Other company departments
• Suppliers
• Freight carriers
• Distributors
• Retailers
• entities all along the value chain
User-centered design approach- focuses on finding the best way to meet customers’ needs, rather than the best way to design products.
How design thinking reinforces circular-economy principles in product development

• Design thinking starts with observing customers in their everyday lives to learn about their material needs and about how well (or poorly) those needs are met by existing products.
• Product designers, marketing specialists, engineers, and others involved in making and selling products use the resulting insights on customer needs to rapidly prototype, test, and refine new concepts for products and services, without relying on old assumptions that might constrain their ideas.
• Design thinking also means asking how to provide value to consumers using a minimum amount of material
• Design thinking thus relies on the sort of collaboration that is central to developing circular-economy products
A design-thinking process, the company would start with:
• one- or two-day working session with all the affected departments and other organizations in the value chain
• Participants would discuss customer needs and relevant business operations— particularly manufacturing and service—and come up with ideas for new offerings as well as the business-model changes needed to support them
• the product-development team would create prototypes
• prototypes would be shared with the same groups from the initial meeting and discussed in another working session
• Product developers would then refine their designs for further consideration by the wider group of stakeholders
• The process would continue until the product is ready to be made and the business changes required to support it have been defined by the relevant departments
• final decision to bring out the product is also thus a choice about reorganizing the business so it can capture maximum value from the new product over its entire life cycle
Increasing pressure from consumers and governments, particularly in developed countries, to be better stewards of resources and the environment.
A major financial and economic opportunity
Each year some $2.6 trillion worth of material in fast-moving consumer goods—80 percent of the material value—is thrown away and never recovered
Companies that successfully design products for a circular economy stand to capture considerable value and create lasting, rewarding relationships with customers.