IoT as an enabler for circular value creation
10.10.2018, CSR Tag, St. Pölten – Die digitale Transformation - Wegbereiter der Kreislaufwirtschaft?
Prof. Dr. Erik G. Hansen (Dipl.-Wirtsch.-Inf.) Institute for Integrated Quality Design
JOHANNES KEPLER UNIVERSITY LINZ Altenberger Straße 69 4040 Linz, Austria jku.at
Project I4L: “Industry 4.0 + Life-cycle” Title (full)
Business Models for Extending Industry 4.0 towards the entire Product Life Cycle (I4L)
Andres Alcayaga, MSc.,
[email protected] Dr. Melanie Wiener,
[email protected] Prof. Dr. Erik G. Hansen,
[email protected]
Team
Levels of analysis:
Smart Product
Focus
Please contact us to join!!! Method
Partner
What?
Smart product innovations
Product-Service System
Integration of smart products as services
Business Model
Value proposition, infrastructure, customer interface, revenue model
How?
Innovation Process
Implications for integrated management systems
Expert study (ongoing) + In-depth case studies (2017-2018) IoT & Circularity, CSR Tag (Hansen)
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FutureLAB: Qualität im digitalen Zeitalter: „Smarte Produkte – Dienstleistungsintensivierung – Lebenszyklus“ 29. Oktober 2018, 13:00 @ JKU
(!) Anmeldung asap: www.qualityaustria.com/futurelabs IoT & Circularity, CSR Tag (Hansen)
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AGENDA 1. Introduction 2. IoT-driven Circular Economy 3. Towards service business models 4. Conclusion
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IoT Growth
Today Source: The Connectivist based on Cisco data, Online: https://twitter.com/WSWMUC/status/539534110692487168 (15.5.2017)
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IoT: Industrial vs. Consumer Industrial Internet of Things
Consumer Internet of Things
Smart ...
Smart ...
Source: http://blogs.intel.com/iot/2015/04/01/all-for-one-and-one-for-all-how-the-iot-is-centralizing-intelligence-across-industries/ (15.5.2017)
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Source: http://www.beechamresearch.com/download.aspx?id=18 (15.5.2017)
IoT: Cross-sector relevance
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AGENDA 1. Introduction 2. IoT-driven Circular Economy 3. Towards service business models 4. Conclusion
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IoT drives circularity ...MONITORING PERFORMANCE DATA TR ANS MITTED FR OM PR ODUCT TO MANUFACTUR ER
PA R T S
...EXTENDING THE ‘USE CYCLE’
• PAR TS HAR V ES TING • R EUS E • R ECYCLING • OPTIMIS ED END OF S OLE US E
Source: Ellen MacArthur Foundation (EMF). (2016). Intelligent Assets: Unlocking the Circular Economy Potential. p. 39.
...DESIGN DEVELOPMENT
...REDEFINING MAINTENANCE • PR EDICTIV E MAINTENANC E • PER FOR MANCE CONTR ACTS • UPDATES AND UPGR ADES
DATA INFOR MS PR ODUCT IMPR OV EMENTS
PA R T S
...IMPROVED COMPONENTS AND PRODUCTS
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“Circular Economy (CE) is a global economic model that decouples economic growth ... from the consumption of finite resources.”
Sources: based on Stahel, W. R. (2016). The circular economy. nature, 531(7595), 435–438. https://doi.org/10.1038/531435a. p. 436; Ellen MacArthur Foundation (2016). Intelligent Assets: Unlocking the Circular Economy Potential. p. 39.
New paradigm: Circular Economy
Condition monitoring, tracking & locating
Data informs product redesign
Smart (retro) logistics
Preventative maintenance
Identification & locating
(Webster 2015, p.16)
Material memory & smart identification
(Industry 4.0) IoT & Circularity, CSR Tag (Hansen)
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Example: where circular pioneers become market leaders Equipment sales in 2015 in billion U.S. dollars 0
5
10
15
20
Caterpillar (U.S.)
30
24,1
Komatsu (Japan)
14,0
Terex (U.S.)
6,5
Hitachi (Japan)
6,5
Liebherr (Switzerland)
25
6,2
Source: statista.com
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Numerous sensors are integrated into the vehicle design. An impeding or abnormal condition in any of the machine's systems will alert the operator and instruct them to take appropriate action, whether it's modifying machine operation, notifying the shop of needed maintenance, or performing a safe shutdown of the machine. IoT & Circularity, CSR Tag (Hansen)
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Source: http://www.cat.com/en_GB/support/maintenance/condition-monitoring.html (15.5.2017)
Electronic Equipment Information collects telematics using "smart machine" technologies, such as wirelessly transmitted Product Link and manually downloaded data
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Sources: http://s7d2.scene7.com/is/content/Caterpillar/C10333582 (8.10.2018) http://www.cat.com
Source: Caterpillar (2015) Sustainability Report 2014, p.47
Remanufacturing example
Durable products as the basis Designed to be rebuilt multiple times Components/machines are overhauled rather than replaced Provision of exchange system where customers can return end-of-life components Reman products with “same-as-new” performance, reliability and warranty at fraction of costs IoT & Circularity, CSR Tag (Hansen)
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... analysis of history of use and condition of components
... analysis of history of use and condition of product
... prediction of failure and preventative maintenance
... improving user interaction through tracking, monitoring, and use statistics Use data for ....
SMART remanufacturing (data-based condition of components) SMART reuse (data-based condition of product)
SMART maintenance/repair (remote access, prevention and prediction)
SMART use (collection of data from users & sensors; digitally augmented product experience) Smart product
Image source: https://www.hilti.group/content/hilti/CP/XX/en/services/tool-services/internet-of-things.html (26.9.2018)
Data enables circular strategies
... identification of materials (virtual material passports) and their condition
Links back into circular product (re)design
Smart circular strategies
SMART recycling (digital material passports)
R&D (Circular product design) IoT & Circularity, CSR Tag (Hansen)
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AGENDA 1. Introduction 2. IoT-driven Circular Economy 3. Towards service business models 4. Conclusion
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Iot-enabled service business models: from transaction to relationship Lebenszyklus Anlagen Service Energie Energieeffizienz
D. Performance contracting
B. Rental, leasing & payper-use
Servitisation
C. Sharing
IoT
A. Product + Quality Control Services
based on Stahel 2010, p.203; Tukker 2004
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AGENDA 1. Introduction 2. IoT-driven Circular Economy 3. Towards service business models 4. Conclusion
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Conclusion Circularity Economy (CE) Important development in political, economic and academic spheres Goal: decouple growth from resource use while creating regional (service) jobs Strategies: repair, reuse, remanufacture, recycle (4R)
IoT can enable CE strategies “Slowing” loops: e.g. condition monitoring, predictive maintenance “Closing” loops: e.g. data-based condition assessments for reuse and reman
IoT-driven CE needs servitization Transaction relationship Service business model types: Quality control services, rental/leasing, sharing, contracting Differentiation as quality leader based on “Total Care”
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Getting in touch Prof. Dr. Erik G. Hansen Institute for Integrated Quality Design (IQD) Johannes Kepler University Linz Science Park 3 T: +43 732 2468-5521 Email:
[email protected] Web: http://www.jku.at/iqd Member in:
Recent awards:
(Network University)
Strategic partnerships:
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References Alcayaga, A. & Hansen, E. G. (2017). Smart-circular systems: a service business model perspective. In C. A. Bakker & R. Mugge (Eds.): Vol. 9. Research in Design Series, PLATE 2017 Conference Proceedings (pp. 10–13). Amsterdam, Netherlands: IOS Press BV. Retrieved from http://ebooks.iospress.nl/ISBN/978-1-61499-820-4. Caterpillar. (2015). Local Citizen: Making Sustainable Progress Possible One Community at a Time. 2014 Sustainability Report. Online: http://s7d2.scene7.com/is/content/Caterpillar/C10545862 (accessed: 10.4.2016). Ellen MacArthur Foundation (2013): Towards the Circular Economy 1. Economic and business rationale for an accelerated transition. Online: http://www.ellenmacarthurfoundation.org (accessed 25.12.2014). Ellen MacArthur Foundation (2016). Intelligent Assets: Unlocking the Circular Economy Potential. p. 39. Hansen, E. G., & Schmitt, J. (2016). Circular Economy: Potenziale für Produkt- und Geschäftsmodellinnovation heben. UC Journal, (2 - October), 8–10. Prakash, S., Dehoust, G., Gsell, M., Schleicher, T., & Stamminger, R. (2016). Einfluss der Nutzungsdauer von Produkten auf ihre Umweltwirkung: Schaffung einer Informationsgrundlage und Entwicklung von Strategien gegen „Obsoleszenz“. Retrieved from http://www.umweltbundesamt.de/sites/default/files/medien/378/publikationen/texte_11_2016_einfluss_der_nutzungsdauer_von_produkten_obsoleszenz.pdf (accessed: 17.2.2016). Stahel, W. R. (1991). Langlebigkeit und Materialrecycling. Essen, Germany: Vulkan. Stahel, W. R. (1994). The Utilization-Focused Service Economy: Resource Efficiency and Product-Life Extension. In B. R. Allenby & D. J. Richards (Eds.), The greening of industrial ecosystems (pp. 178–190). Washington, D.C: National Academy Press. Stahel, W. R. (2010). The performance economy (2nd ed.). Basingstoke, England, New York: Palgrave Macmillan (Original work published 2006). Stahel, W. R. (2016). The circular economy. nature, 531(7595), 435–438. https://doi.org/10.1038/531435a. Steffen, W., Sanderson, A., Tyson, P. D., Jager, J., Matson, P. M. & Moore, B. (2004). Global change and the earth system: A planet under pressure. Berlin: Springer. Tukker, A. (2004). Eight types of product–service system: eight ways to sustainability? Experiences from SusProNet. Business Strategy and the Environment, 13(4), 246–260. https://doi.org/10.1002/bse.414.
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