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Discover the business benefits of going circular
Discover the business benefits
of going circular
Agenda for today
• What is this new way of doing circular business?
• Change management
• Partnership and risk management • Tools and resources available to support you
Introduction to Circular Economy
Link to Ellen MacArthur video on next slide for reference: https://www.youtube.com/watch?v=zCRKvDyyHmI
Employment and the Circular Economy – Job creation in a more resource efficient Britain
http://www.wrap.org.uk/content/employment-and-circular-economy
Business cases
New ways of doing business –
why change?
Markets are changing: don’t stand still
http://money.usnews.com/money/blogs/flowchart/2010/08/19/10-great-companies-that-lost-their-edge
Companies such as Kodak & Blockbuster are famous for failing to respond to changing markets. Many other leading companies have “gone off the boil” by failing to innovate effectively.
Markets are changing: disruptive innovators
See also http://www.fastcompany.com/section/most-innovative-companies-2014
1. Note down ideas on innovators in your area
Not everything will work!
http://www.driving.co.uk/news/news-mercedes-pulls-car-sharing-scheme-off-the-road/
2050? 500bn
http://www.iea.org/publications/freepublications/publication/more-data-less-energy.html
2013 14bn
2020 50bn
2030 100bn
Future trends for smart devices & “Internet of things”
Dave Farbrother, Chief Financial Officer, National Union of Students Refit of Macadam House, Gray's Inn Road, London A client who wanted to procure their refit with circular economy as a key principle
Video case study
NUS refit case study
Key factors to help you think about why to innovate
© Mind Tools Ltd, 1996-2015. All rights reserved. "Mind Tools" is a registered trademark of Mind Tools Ltd. Reproduced with permission. See http://www.mindtools.com/pages/article/newTMC_08.htm for more information.
Key factors to help you think about why to innovate
© Mind Tools Ltd, 1996-2015. All rights reserved. "Mind Tools" is a registered trademark of Mind Tools Ltd. Reproduced with permission. See http://www.mindtools.com/pages/article/newTMC_08.htm for more information.
2. What can you identify that puts pressure on your current way of doing business?
Problems, threats & opportunities: innovation & incubator programmes
3. What problems, threats and opportunities are affecting your company?
16%
54%
22%
8%
Who took the survey?
Other Contractor 126 Supplier 50 Developer/Client 19
UKCG Circular Economy Survey
Understanding the concept
•43% of people say they
understand the concept well
•12 % of people said they have
never heard of it – how do we communicate with this minority?
•61% of people saying they got to know the concept through industry literature.
•94% agree that Circular Economy offers an excellent solution to future challenges in resource scarcity
• Clients/Developers had the
most positive response to the potential of the circular economy
•89% of clients believe that companies will gain a competitive advantage if they adopt a circular approach
• Changes to the model of how we procure and use materials to achieve significant resource efficiency is needed.
• Opportunities for competitive advantage
• There is a need to define the terms which are used and what they mean
0 0.5 1 1.5 2 2.5 3 3.5 4
Circular Economy will have a limited impact on the construction industry
The lifecycle of buildings is too long to make circular economy models work inconstruction.
There will be a significant change in the way we source materials in the constructionindustry due to circular economy thinking.
The Circular Economy is just another word for recycling and reusing materials.
Companies who take a circular approach to how they buy and sell products will gaina competitive edge.
We can achieve sufficient resource efficiency without changing the model of how weprocure and use materials.
Average score. A result of above 3 shows agreement and a result below 3 shows disagreement.
Implications for Sector
69% of people have not heard of a strong business case for the circular economy in construction
There is currently limited research on exactly what the barriers are in construction in terms of working out a working business model for buildings with long life's.
There are business models which work effectively for products with a shorter lifespan such as lighting carets etc.
‘Developing clear examples to support a detailed business case will help construction move towards a circular economy‘
Business Model
The most common answers were:
• 1 in 10 respondents mentioned fit out
• Metals Steel/Aluminium
• Electrical/Lighting
• Short Design Life
• M&E
People were asked what were the materials/products most suitable to the circular economy.
Everything was the most common answer amongst a wide range which included many different materials.
Materials Selection
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
Energy saving and environmental protection
Reducing cost
Legislation
Public opinion
Rising prices of resources
Landfill costs
Resource scarcity
Rising prices of resources and resource scarcity are considered to be the most important drivers for the circular economy.
• 77% said rising prices of resources was highly important • 70% said resource scarcity was highly important
This shows that there is genuine concern that the price and availability of resources is going to affect the construction industry. Public opinion and legislation considered the least important drivers.
Average score. A result of above 3 shows agreement and a result below 3 shows disagreement
Drivers
3.65 3.7 3.75 3.8 3.85 3.9 3.95 4 4.05 4.1 4.15
Changing business culture – so circularity more widely accepted.
Bringing together supply chain – the need for a more holistic approach across the supply chain – including
architects and product designers.
Financial issues – cost model needs to support re-using materials not buying new.
Technical issues – market still developing and need more products/solutions – currently easier to down
cycle.
Current policy climate - contractors build according tocontract
• Technical issues considered the least important
• 42% considered the current policy climate to be a highly important barrier. Showing there could be an issue with contracts preventing circularity
• A more holistic approach across the supply chain also considered highly important.
• All barriers considered important.
Average score. A result of above 3 shows agreement and a result below 3 shows disagreement
Next Steps
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
Strong leadership from industry to push forward changes inresource efficiency
Increasing government taxes such as landfill costs andaggregates levy
Research and Development in how cost models would work inconstruction
Respondents were asked what they thought were the most important next steps.
48% gave strong leadership from industry a score of 5
UKCG has the opportunity to push forward the Circular Economy
Average score. A result of above 3 shows agreement and a result below 3 shows disagreement
Next Steps
• There is a broad support for moving towards the circular economy
throughout the industry
• There is a communication problem throughout the supply chain, a more
holistic approach required
• The most important barrier highlighted was the current policy climate in
which contractors must build to contracts.
• Clearer business models must be developed and the benefits of a circular
approach should be shown with working examples.
• Industry can take a leading role in supporting a shift to a more circular
economy
Conclusions
Change management
what models might work?
what will the customer experience be?
how can your business deliver that need?
Richard O’Connell, Director, Bandvulc Transition to an incentivised return business model
Video case study
Bandvulc Tyres case study
What new ways of doing business might work?
4. What options might be possible for your business?
What will the customer journey look like? An example from retail…
http://www.telegraph.co.uk/news/shopping-and-consumer-news/11324611/Click-and-collect-overtakes-home-delivery-at-John-Lewis.html
Factors to consider when developing your ideas
http://www.rebus.eu.com/getting-started/strategic-pitch
You will need a network of supporters and influencers
Champion
Operations
Commercial
Marketing
Exec Sponsor
Logistics Finance
CFO
Field team or stores
Legal
5. Who do you need in your internal network?
What will the customer journey look like? An example from the built environment sector…
6. How can you change the customer journey?
http://www.lighting.philips.co.uk/pwc_li/gb_en/projects/Assets/CaseStudy_NUS_UK.pdf
Partnership and risk management Can your company deliver a new business model
independently? Who could you work with to achieve the change you
want? Does the new model introduce new/different risks
into the company? How will you mitigate those risks?
Nitesh Magdani, Sustainability Director, BAM Built Environment company at the start of their Circular Economy journey
Video case study
Build the jigsaw – including how to work with partners
Identify bus. case & sensitivities
Service partners & providers
Market context
Customer proposition
Market data
Partnership and risk
7. What partners, upstream and downstream can help improve your offer to the customer?
see also http://www.investopedia.com/terms/s/spv.asp
A process can help
How does this fit with your corporate strategy?
Source: Prof. Marcus Alexander, Ashridge Business School
How does this fit with your corporate strategy?
Source: Prof. Marcus Alexander, Ashridge Business School
Market needs
Offer from me & partners
Strategic aims 8. What is the
improved offer that you & potential partners can make to the customer?
Opportunities for further support 1-2-1 sessions with WRAP
Knowledge Transfer Network Innovate UK
Resource Efficient Wales
ktn-uk.org
@KTNUK
Support to build new collaborations
ktn-uk.org @KTNUK
Valeria Branciforti, Knowledge Transfer Manager
KTN - Built Environment
Introducing
What we do
— KTN is the UK’s innovation network. It brings together businesses,
entrepreneurs, academics and funders to develop new products, processes
and services
— We help business to grow the economy and improve people’s lives by
capturing maximum value from innovative ideas, scientific research and
creativity
The Knowledge Transfer Network
ktn-uk.org @KTNUK
The Knowledge Transfer Network
Connecting people to accelerate innovation
Interdisciplinary
Bringing together
businesses and
researchers from
different sectors.
Commercial
Introducing
innovators to public
and private funders
and investors.
Strategic
Connecting people
who wouldn’t
usually meet to
solve innovation
challenges.
Entrepreneurial
Linking people with
new ideas and
technologies to
partners and
customers.
ktn-uk.org @KTNUK
Addressing societal challenges and growing new technologies
ktn-uk.org @KTNUK
16 Industry communities
Core thematic networks covering key
application areas and underpinning
technologies
60,000+ Members
An engaged online community of
innovators served by a single platform
20 Cross-sector groups
Interdisciplinary programmes building
communities around priority challenges
15,000+ Delegates per year
Hundreds of events bringing people
together ‘to make magic happen’
Chris Warkup
CEO
We are eliminating
silos to make it
easier to
assemble multi-
disciplinary teams
so that we can do
more, and do it
well.
David Lockwood
Chair
The “half-life of
knowledge” is
shortening, so we
must connect
business with
research faster than
ever before.
Clustered communities, groups and business programmes
Focus is on bringing together groups that would not normally meet
ktn-uk.org @KTNUK
Materials
Chemistry
Environmental
Services
Agri-Food
Biosciences
Health
ICT
Electronics, Sensors
& Phototonics
Defence & Security
Space
Built Environment
Transport
Energy
Creative Industries
Digital Economy
Design
Sustainability, H2020, International, Access to Finance, Design
https://connect.innovateuk.org/web/bwlp
Example of support for applicants of a competition for funding
• Providing and sharing
your company profile in
the Consortia Building
Zone
• Access useful
information and
documents: Articles
and events
New document by the KTN: Whole-Life Performance in the building sector
It provides answers, examples
and references for those who
are interested in knowing more
about the topic.
Download you copy here or
come and collect it at our stand
at Resource, Excel, London, 3
– 5 March 2015
National and local: we would like to know about your organisation
ktn-uk.org @KTNUK
If you have an innovative idea, you would like
to discuss your activities with us
or you are looking for partners …
… contact us!
Valeria Branciforti
Knowledge Transfer Manager
KTN - Built Environment
Four opportunities for R&D funding
Circular Economy Business Models
27/02/2015
Nick Cliffe @moriati23 [email protected]
tinyurl.com/circbizmodels
Circular Economy Business Models
Up to £800k for feasibility studies to explore the
business case for retaining value in goods through
reuse, remanufacture or leasing/repair.
Output should be a business case and pilot project
plan
Feasibility studies: These develop new areas of knowledge leading to the development of new products, services or processes.
Circular Economy Business Models
• Limited to durable goods
• Focus on user take back
• Repair, Reuse & Remanufacture
• Customer relationship is key
Manufacturer
‘re’-organisation
‘Retailer’
customer
Building Whole-Life Performance
27/02/2015
Rick Holland @RickInnovate [email protected]
https://interact.innovateuk.org/competition-display-page/-/asset_publisher/RqEt2AKmEBhi/content/building-whole-life-performance
“up to £4 million in collaborative R&D
projects that can lead to better
whole-life performance of buildings”
“mainly industrial research projects”
https://interact.innovateuk.org/competition-display-page/-/asset_publisher/RqEt2AKmEBhi/content/building-whole-life-performance
Building Whole-Life Performance
Projects must…
follow at least one of three themes:
Stimulating customers to procure and manage solutions for WLP
Improving a building’s WLP
Evidencing WLP
involve research into new knowledge. This is crucial for Industrial Research
Building Whole-Life Performance
https://interact.innovateuk.org/-/funding-rules
Aim at new hardware, software, industry process, building systems, client services etc
refer to existing initiatives & standards, e.g.:
• PAS 1192 Part 3 (http://shop.bsigroup.com/ forms/PASs/PAS-1192-3/) • Soft Landings, and Government Soft Landings (GSL) • Building Performance Evaluation (BPE) • Life Cycle Assessment (LCA), ref. EN 15804 • Life Cycle Costing (LCC), ref. ISO 15686
Building Whole-Life Performance
Projects could…
To stimulate thinking...
https://connect.innovateuk.org/web/bwlp/article-view/-/blogs/new-document-by-the-ktn-whole-life-performance-what-does-it-mean-in-the-building-sector- Includes case studies
of projects we have previously funded e.g. Re-FAB, a circular economy model for housing
Supply Chain Integration in Construction
27/02/2015
Mark Wray uk.linkedin.com/pub/mark-wray/36/58b/4b6/en
https://interact.innovateuk.org/competition-display-page/-/asset_publisher/RqEt2AKmEBhi/content/supply-chain-integration-in-construction
Supply Chain Integration in Construction
Up to £2m for feasibility studies to explore new ways to:
improve information flow & increase collaboration
through the construction supply chain.
Feasibility studies: These develop new areas of knowledge leading to the development of new products, services or processes.
For consideration... • The industry is highly fragmented
• A common misunderstanding is that clients want least capital cost when often they actually seek best value
Client Procurement /
advisors
Contractor
Designers Suppliers
Regulators
Financers
Insurers Operators Maintainers
Users
Neighbours
Service Providers
Smart Products from Smart Materials
27/02/2015
Andy Sellars @hi_tech_uk [email protected]
http://bit.ly/1GJ2ckI
Smart Products from Smart Materials
£6 million in collaborative research and development (R&D)
projects to encourage the development of smart products
“A smart product is one that responds autonomously to stimuli in the environment”
We are particularly interested in projects aimed at improving environmental and social impact across the lifecycle of the product.
https://interact.innovateuk.org/
Where to go for help...
Email the leads for the relevant competition
Watch our guidance videos:
https://www.youtube.com/playlist?list=PLrMOhOrmeR6m4rQacn-kYgt-3RIqyC275
Use the helpline (details on the back covers)
Knowledge Transfer Network (KTN)
https://connect.innovateuk.org/web/bwlp
Support from the KTN
• Consortia Building Zone
• Articles and events
• White paper on BWLP
• Case studies
• Meet KTN at Resource
