Product requirements in the rental business

Circular Economy: How linear products can go round

What do football and circular business models in the furniture industry have in common? It's all about a round thing. And so that "the round can go into the square" and "the linear into the round" - a strategy is needed. In this article, we look at the requirements for products so that the plan can succeed.

Jun 16 2021

10,000,000 tonnes 

This figure represents the disposal of furniture in Europe alone. Annually! And the trend is rising! Basis: Linear Business Models "Take-Make-Dispose". One of the aims of the European project "FURN360", which was launched in 2017 and is supported by the European Commission, is to change this. Focus - Training programmes for the implementation of circular business models for the furniture and wood processing sector. 

For the implementation of "circular products", three criteria are elementarily decisive and must be anchored in the strategy: 

  • Long(er) life cycles,
  • modularity and compatibility,
  • multiple use. 

Long(er) Life. The definition of product life cycles is highly relevant for all business models. In the case of circular product cycles, the scope of content to be considered is larger and the ecological-sustainable view goes deeper than in the case of linear ones. It includes, among other things, manufacturing, use of materials, conditions for re-manufacturing and refurbishment, packaging and logistics, and recyclability of materials. 

Modularity and compatibility. Without wishing to strain the megatrends of our time again, this results in the necessity and advantages in the design of products. They must be adaptable. Where living situations and economic requirements change, furniture should be able to "keep pace". And thus also enable renewed use. 

Multiple use. The two criteria mentioned above are the prerequisite. Re-use keeps the products in the cycle and is the first choice for resource conservation. Offering multiple use via rental models is a key element for circular business models. 

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"El Capitano" design 

Someone has to be the leader. On the pitch, that is the team captain. In the design of circular products, this role belongs to design. And even from a double point of view. It all starts with design. For the development of corporate philosophies and business models. For the design of products. 

Circular Economy Design: The task - how can resources be kept in the ecological cycle? This is where the design for all subsequent elements starts, where the foundation for success is laid. Design initiates the processes for production, distribution, use, refurbishment, re-manufacturing, upcycling, upgrading, recovery.  

An important supporting method for fixing the design decisions is Life Cycle Thinking (LCT). Here, all economic, ecological and social impacts are considered across all phases of a product or process life cycle. On the basis of LCT and the establishment of a "Sustainable Portfolio Management (SPM) tool", the chemical company SOLVAY, for example, was able to achieve a 6 percent higher annual growth rate compared to its previous "linear" business. 

Circular product design: The quality and processing of the raw materials and materials to be used play a major role. They must allow for a long service life of the products. Resilient, robust and at the same time safe - requirements for multiple use. The type of ecological production and final treatment lays the foundation for re-manufacturing and refurbishment, among other things. The decisions are made in the design.

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Eleven friends you must be 

What is established in the design process must be implemented above all in the preparation and manufacture of the products. Taking all relevant factors into account is crucial to achieve the circularity of the products. Like in football - team play. 

The strategic orientation of the "team set-up": ecologically sustainable use of all resources and materials and manufacturing designed for durability, reuse/recycling in compliance with all health, labour and environmental regulations. 

The most important points in detail: 

  1. low energy consumption during production  
  2. low emissions during production 
  3. economical use of chemicals that are harmless to health and the environment 
  4. use of renewable raw materials 
  5. Certified sustainable materials 
  6. use of reusable or recycled packaging 
  7. shortest possible transport routes 
  8. durable, long-lasting and safe use 
  9. easy maintenance and repair, availability of spare parts 
  10. easy assembly and disassembly, simple disassembly into individual parts 
  11. reusable and biodegradable materials. 

Norms and standards, among other things, are essential for the establishment, transparency and guarantee of effective, actionable product processes. Example. As a guideline of the circular cycle in design and development within corporate environmental management systems, ISO 14009:2020 is significant. This standard supports the implementation of the UN Sustainable Development Goal 13 (SDG 13) "Take urgent action to combat climate change and its impacts". 

Standards, norms, binding specifications, transparent labels and quality marks not only guarantee security of action for one's own circular products and create trust among customers – they also protect against distortion of competition through "greenwashing".

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The game lasts 90 minutes 

The change from a linear to a circular set-up in business processes definitely takes longer. But that is not decisive. What is important is to start. Whether on the basis of a hybrid business model with sales and rental, as a pure rental model or with an orientation as a "product as a service" - there are various possibilities. It has to fit the company and its product portfolio. There is always room for development and design. Detours or reorientations are also allowed. 

A good example for the furniture industry is IKEA. Tainted for many years with the stigma of being a "cheap producer", the company has firmly embedded the goal of climate neutrality in its strategy on the basis of circular business models and is consistently aligning all activities to this goal.  

Not everything succeeds completely right away, as the first attempt to establish a rental model shows. A bypass via a "second-hand strategy" and collaborations such as with MUD Jeans also support the maturing process. There are at least three reasons for designing products in such a way that they can be used and reused several times.  Our resources are - for a long time - finite. It is an economically successful business model - see the example of Solvay. Our new user generations want to "own" differently. 

Kick-off. The ball is rolling.

Read more about circular economy in the magazine my imm cologne

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Portrait of Andre Hempel
Andre Hempel Senior Management
lab of rent
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