NEW MATERIALS, NEW BUSINESS MODELS FOR SUSTAINABLE INNOVATION 2013

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NEW MATERIALS NEW BUSINESS MODELS Tracey Rawling Church Head of CSR, Kyocera Document Solutions (UK) Ltd

description

How can businesses use materials innovation to disrupt markets and create new revenue streams? What are the opportunities, and what are the challenges? Based on the experience of Kyocera, this presentation explores the application of new materials to solve resource efficiency challenges and facilitate new business models. Presented at Sustainable Innovation 2013, 4th November 2013.

Transcript of NEW MATERIALS, NEW BUSINESS MODELS FOR SUSTAINABLE INNOVATION 2013

Page 1: NEW MATERIALS, NEW BUSINESS MODELS FOR SUSTAINABLE INNOVATION 2013

NEW MATERIALS – NEW BUSINESS MODELS

Tracey Rawling Church – Head of CSR, Kyocera Document Solutions (UK) Ltd

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MATERIALS-ORIENTED BUSINESS

Kyocera Corporation

Core competence: fine ceramics

Global headcount: 71,500

Revenue: € 11,172 million

Profit: € 745 million

“We produce fine ceramics that are more resistant to heat, wear and

corrosion than plastics, metals or other conventional materials.”

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VALUE-CENTRED STRATEGY

3

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THE STATUS QUO: DESIGNED-IN WASTE

Components of a conventional

printer cartridge

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INNOVATION: DESIGNED-OUT WASTE

Components of a Kyocera

printer consumable

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RESOURCE EFFICIENT DESIGN CUTS

WASTE AND LIFECYCLE IMPACTS

Waste produced during a 300,000 page test conducted by Druckerchannel.de

Analysis by Best Foot Forward concluded that the carbon footprint of a

remanufactured laser cartridge is 46% lower than a corresponding new

cartridge, and that the carbon footprint of a Kyocera toner-only cassette is 55%

lower than a corresponding conventional cartridge

Analysis by TCPGlobal calculated whole-life cost savings of typically 50%

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PRODUCT DESIGN IS ONLY THE START

1. Design based on lifecycle analysis – identify and design out high

impact materials and design features, considering their impacts at

every lifecycle stage

2. Streamline manufacturing processes – minimise energy/materials

waste

3. Optimise transport and distribution – packaging, routes, modal shift

4. Understand customers’ contribution to use-phase impacts – introduce

measures to promote responsible use

5. Close the loop where appropriate – create takeback programmes

that offer the most environmentally efficient outcome

Kyocera is working on a TSB-funded project

to find ways of ensuring that high quality

materials can be recovered from its end of

life products,- and those of other

manufacturers who design for disassembly

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Kyocera is working with Forum for the

Future to understand why the Product-

Service Shift has worked in our industry,

so as to transfer the learning to others.

Example: Managed Document Services

Paradigm shift – moves the focus from devices to documents

The aim of an MDS project is to deliver efficient document flows with

• The smallest number of devices, appropriately located in the organisation

• Proactively maintained to maximise longevity

• Document management software to reduce the need to print

• User training to promote the use of energy/paper saving features

• Management information to continuously optimise the system

• Free takeback and recycling of hardware and consumables

• Pay-per-page pricing to discourage wasteful use

OPTIMISING BUSINESS MODELS

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INNOVATION DEMANDS DISRUPTION

The mainstream laser printer industry is based around a fundamentally

wasteful product design – the single process cartridge – and a “razor and

blade” business model

The market has settled for a solution which seeks to mitigate the waste

impact by re-manufacturing consumables, rather than challenging the

fundamental design flaws in the product design and business model

Innovators in our industry have numerous barriers to overcome:

• Their competitors are not just printer vendors, but also cartridge

remanufacturers

• Legislation specifically promotes remanufacturing and disregards

resource-efficient product design

• Established procurement processes focus on securing deep hardware

discounts (cap-ex) and rarely consider whole-life costs (op-ex)

• Silos in customer organisations don’t support the level of collaboration

required to take advantage of innovative consumption models

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INNOVATIVE BUSINESS MODELS

Service system

based on existing

product

Dematerialised

service Long-term

leasing

Conventional

hire

Peer-to-peer

rental

Short-term rental

Long-term

leasing with

linked service

Asset

management

Incentivised

return to third

parties

Collection of

used products

Incentivised

return to

manufacturer

Reducing

consumption

Durable products

Closed loop

recycling

Peer-to-peer

lending

Made to order

WRAP’s Innovative Business Model Map

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THE OPPORTUNITIES FOR INNOVATION

Opportunity 1:

Design products to be more resource-efficient throughout their entire

lifecycle

Opportunity 2:

Design products to be more easily dismantled and reprocessed for resource

recovery at end of life

Opportunity 3:

Create new business models that decouple functionality from physical goods

Opportunity 4:

Work with customers to ensure they understand how to benefit from the

resource-efficient features of the product or service during the use phase

Opportunity 5:

Collaborate with providers of resource recovery services to close loops

locally

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THE CHALLENGES (B2B PERSPECTIVE)

Challenge 1:

Manufacturers can only sell in innovative ways if customers are geared up

to purchase in innovative ways

Challenge 2:

Designing-in longevity incurs a price premium which can make hardware

appear expensive when in fact whole-life costs (direct and indirect) are lower

Challenge 3:

Few manufacturers are able to deliver every link in a service-led offer – we

must learn to collaborate with new partners and in new ways

Challenge 4:

Resource recovery/recycling infrastructures are immature and continuity of

supply of post-consumer materials is unreliable

Challenge 5:

Policy landscape doesn’t support disruptive innovation

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CLOSED LOOP, OPEN LOOP OR HELIX?

Ellen Macarthur Foundation

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PUBLIC SECTOR CHALLENGES

The tender process stifles innovation:

If an invitation to tender is written around a hardware specification, the

supplier cannot bid a dematerialised or service-led offer – he’ll simply be

disqualified

• Outcome based tenders provide the freedom to innovate around a goal

Hardware cost has disproportionate influence on procurement:

Sustainability data gathered as part of the vendor selection process rarely

plays a part in the final procurement decision

• Whole life costs – both direct and indirect – could be embedded in the

targets of procurement professionals

Smokestacks prevent collaborative consumption:

Emerging business models provide extensive opportunities for government

departments to share hardware and services, cutting both cost and carbon

• A more holistic approach to ICT infrastructures can enable collaborative

consumption, dematerialisation of services and improved efficiency

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IN CONCLUSION

Resource inefficiency is a systemic problem which is best addressed by

going back to product fundamentals and designing out waste from product

designs, supply chains and business models

This cannot be resolved by manufacturers alone – we need to collaborate

with service providers, policymakers and customers to create conditions

that foster disruptive innovation

Kyocera is working with Green Alliance on

the Circular Economy Task Force – to try to

understand how circular business models

can be developed in a way that keeps

companies profitable, and how the policy

landscape can better help to foster a

circular, resource secure economy

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© 2013 ᅳ KYOCERA Document Solutions

http://www.kyoceradocumentsolutions.co.uk

All rights reserved.

THANK YOU!

04/11/2013Presentation title 16

Tracey Rawling Church

Head of Corporate Social Responsibility

Kyocera Document Solutions (UK) Ltd

[email protected]

http://twitter.com/traceyrc