Circularity in Manufacturing
As global challenges such as climate change and resource depletion intensify, it’s clear that our current ‘take-make-waste’ economic model is unsustainable. The UN projects that by 2050, we will need three planets' worth of resources each year to meet demand if we continue on this linear path. So, how do we foster future growth without depleting our planet's resources?
Enter the circular economy: a transformative approach to economic development that aims to eliminate waste, circulate products and materials, and regenerate natural systems. Recognized as a $2 trillion opportunity for the Australian economy, the circular economy is also key to reducing 45% of global greenhouse gas emissions.
How can businesses participate?
Most businesses today are adopting circular practices for cost savings and efficiency reasons. However, businesses can participate further by offering circular products and services to their clients. THAT is how a business can capture a slice of the $2 trillion value that a circular economy is expected to deliver to Australia.
Case study - circular products and services
Chilean manufacturer Neptuno Pumps has a vertically integrated business model, which facilitates the implementation of a more circular operation since it is much easier to do so when most of the company’s design, manufacturing, repairing activities are integrated.
Alongside manufacturing of pumps, their repair and remanufacturing business arm works to recondition and improve products that are no longer functional and optimises their efficiency by repairing or replacing components in order to offer same-as-new products and satisfy the customers’ needs. Remanufacturing a product reduces, on average, the emissions of greenhouse gases (GHG) by 60%, avoids about 70% of the waste generation from materials and lowers costs of production by 30%, in comparison with traditional manufacturing processes.
About 60% of Neptuno’s pumps are manufactured with recycled materials and the systems’ design provides a product lifetime 1000% more extensive. This represents a 1 million Dollars annual saving per single pumping system.
A case study looking at a project in collaboration with an industrial partner to upgrade their pump systems found that the new custom engineered equipment, made from reused parts, reduced energy consumption by 15%, which resulted in savings of US$579,000 per year in addition to reducing 3798 tons of CO₂ annually.
By understanding and servicing the full lifecycle of materials and products, businesses can mitigate negative environmental impacts, reduce supply chain risks, and tap into a growing circular market.