Circular Economy

Product design has a key function in a circular economic model. After all, too many products are still designed in such a way that they simply cannot be reused, repaired or at least "embellished", or can only be used as a one-off product anyway. In terms of basic design alone, these products do not meet the requirements that must be met when entering a circular economy.

The special importance of product design for a functioning "Circular Economy" is also expressed in the fact that up to 80 percent of the environmental impact of products is already predetermined at the beginning of the lifecycle – by the design.

TMG Consultants helps the manufacturing industry to the right approach for the development of circular products. In doing so, the design of a new product remains a question of economic efficiency, taking into account the different requirements.

Irrespective of the current explosive situation and the supply difficulties with certain raw materials, we believe it makes sense to fundamentally consider in which products recycled raw materials could already be used today. According to the EU Commission's targets, the quota of recycled materials should be able to cover more than 25% of current raw material requirements by 2030.

Furthermore, the use of sustainable and recyclable materials and raw materials is an effective measure to both counteract the risk of increasing shortages of important raw materials and reduce dependence on suppliers in remote, politically unstable regions.

How the search for a supplier of recyclates or other sustainable inputs can be carried out today with the help of artificial intelligence is demonstrated by 7Q1 – a tool used by TMG Consultants to easily and quickly identify suitable suppliers. With the help of 7Q1 and the use of AI in conjunction with Big Data, manufacturing companies will be able to identify suppliers quickly, inexpensively and objectified worldwide, virtually "at the push of a button".

A Circular Economy is only as good as its reverse logistics. This is because return logistics is an elementary prerequisite before the actual remanufacturing process can begin. Without it, the cycle cannot be closed.

Return logistics is fundamentally different from classic distribution logistics. The main challenge here is that control is no longer "direct" from a central point to a large number of recipients. Quite the opposite: in reverse logistics, the user decides when products are returned to the cycle.

Consequently, companies considering the move to a circular economy must also address the question of how to set up and implement reverse logistics that function as efficiently as possible. The key to success – and in our view the decisive point – is that the topic of reverse logistics cannot be treated as a marginal issue. If a company consciously decides to actively enter the Circular Economy, those responsible should also put "Reverse Logistics" on the agenda and anchor it organizationally in the company according to its importance.

Production plays a key role in the circular economy model. Since an average of 40 to 50 percent of total costs in manufacturing companies is spent on production materials, substantial cost savings can be achieved through professional recycling of these materials.

In order to design and establish a closed material cycle in production, manufacturing companies have various options at their disposal:

• Recycling / reuse
• Remanufacturing / remanufacturing
• Refurbishment / Product overhaul

TMG Consultants works out a clear strategy with its customers in advance and plans or optimizes the processes based on this strategy. Together with the manufacturing industry, we advise on key questions: Are the refurbishment / production processes efficient? Is the cost of reprocessing commensurate with the benefits?

In a circular economy, digitization has the primary task of creating transparency with regard to the specific status of products and ensuring their traceability throughout the entire life cycle, right up to final return.

Many companies do not know what happens to their products once they have been brought to market: How do customers use the product? How intensive is this use? What is the quality of the product during and what is the quality of the product at the end of its life cycle? What about the quality of some specific components at the end of their life cycle? These and many others can be answered today in many cases supported by digital solutions. Digitalization is thus making a fundamental contribution to enabling companies to gain more information about their product from reused or remanufactured products, recycled materials, and even particularly extended useful lives, and thus to reap sustainable economic benefits.

With our experience, we help companies to collect and evaluate the relevant data. Based on internal IT systems, we create solutions to bundle and link all product-related data. Digitalization thus becomes a lever that is largely responsible for the efficiency of the entire cycle.