Strategies to ripe the benefits of Circular Economy in Europe.
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1 from research. to market Strategies to ripe the benefits of Circular Economy in Europe. Prof. Tullio Tolio a,b (a) Director of ITIA-CNR, Institute for Industrial Technologies and Automation (b) Full Professor at the Department of Mechanical Engineering Politecnico di Milano Italy.
2 Producer-centric Circular Economy Paradigm Demanufacturing and Remanufacturing include the set of technologies and systems, tools and knowledge-based methods to recover and re-use functions and materials from industrial waste and post-consumer high-tech products, to support a sustainable implementation of the circular economy paradigm. 2
3 Traditional Motivations for Circular Economy Motivations for the transition to Circular Economy business models Environmental reasons (energy and landfilling savings). Compliance with legislation (Extended Producer Responsibility). Economical and strategic reasons (increasing price of raw materials). Increased availability of scarce materials (e.g. rare earths and key metals). Increasing importance in the worldwide political and research agendas: G7 Summit Declaration June 2015: The G7 Alliance on Resource Efficiency promotes Circular Economy, Remanufacturing and Recycling as strategic actions for limiting the consumption of natural resources and reducing waste. 3
4 Economic Benefits at European Level Shifting toward a circular economy model would deliver better outcomes for the European economy and yield annual benefits of up to 1.8 trillion by Annual total cost of producing and using primary resources, EU-27, euros trillion Source: Europe s circular-economy opportunity McKinsey Center for Business and Environment September
5 Social Benefits at European Level: effect on jobs Source: Europe s circular-economy opportunity. McKinsey Center for Business and Environment September
6 Producer-centric Circular Economy Paradigm Recovery and re-use of materials in the same manufacturing plant scenario. 6
7 Circular Economy: recovery and re-use of materials Example: Circular Economy at Sinctronics, Brasil. Disassembly, recycling, and molding processes in the same plant. Main enablers: High quality of the recovered materials through efficient technologies. Product information tracking in the plant for root cause analysis and quality control feedback management. SincTronics, green IT Innovation Center, 7
8 Producer-centric Circular Economy Paradigm Remanufacturing for the aftermarket scenario. 8
9 Circular Economy: remanufacturing for the aftermarket European market figures for remanufacturing in the automotive industry Market trends in terms of reconditioned parts Customer preference in the aftermarket New parts Remanufactured Parts Weiland et al, European Automotive Remanufacturing, Technical Trends & Market Development. 9
10 Benefits of Remanufacturing for the aftermarket Premium quality remanufactured products are set to play an even more important part in Knorr-Bremse s business... And so we are bundling our remanufacturing expertise and increasing our production capacities. Wolfgang Krinner, Member of the Executive Board. [Source: Knorr-Bremse invests heavily in remanufacturing business]. Mechatronic modules for EBS. Example: Benefits of Remanufacturing in the automotive industry (Electronic Air Control unit). [Source Kohler: D., Mechatronic Remanufacturing at Knorr-Bremse Commercial Vehicles Systems (CVS)]. 10
11 Producer-centric Circular Economy Paradigm Remanufacturing for product function upgrade scenario. 11
12 Circular Economy: remanufacturing for product function upgrade Remanufacturing for product functionality upgrade is a promising strategy which is currently diffused only for few products: Printers and cameras; Medical devices; Industrial machines; Airplanes and trains. In the future, this practice shall become a strategic asset for the European manufacturing industry in different sectors. Promising features: Remanufacturing of the mechanical modules and upgrade of the electronic modules. Suitable for providing low price advanced products. Short manufacturing-use-upgrade cycles would increase the company competitiveness and the customer satisfaction. Product-service based business models are attractive. 12
13 Global Impact of De-and Remanufacturing Developing new technologies, systems and strategies for De-and Remanufacturing will bring social benefits worldwide: New jobs coupled with technological and automation innovations, due to the increased competitiveness for the manufacturers; New efficient and effective technologies and systems to be exported also to emerging countries; Cheaper products: due to the cost savings made from the recovery of the materials and energy of the product. Customers Loyalty by offering to customers a range of services covering more than just the sale and maintenance phases. Environmental and Energy savings raw material extraction is much more demanding from an energy point of view; Political benefits in terms of independency from fluctuations and turbulence in the primary material market (e.g. for rare earths). 13
14 Challenges for de-and remanufacturing systems Global trends Challenges for de-and remanufacturing systems Short life cycle of products and high product variety. Flexibility and reconfigurability. High variability in the conditions of post-consumer parts. Part quality dependent assignment, routing and processing times. Pressure on costs, quality of recovered components/materials and efficiency. Poor information about return products. Increasing attention on safety and ergonomics. Need for hybrid automation solutions. Zero Defect De-and Remanufacturing. Need for ICT solutions and big Data management systems. Need for in-line part and materials inspections. Need for human-centric design of disassembly/sorting workstations. 14
15 Innovation Needs for the Circular Economy Vision End-of-life products Level 1: Single technologies and processes Level 2: System Integration Level 3: Value chain and reverse logistics. Level 4: Product Re-design. Level 5: Business Model. Need for pilot scale implementations to demonstrate the technical feasibility of the concept. Need for science base to develop advanced solutions for De-and remanufacturing systems of the future. 15
16 Innovation Needs for the Circular Economy Vision Societal Challenges Health and wellbeing Food security Energy Transportation Climate action, environment, resource efficiency and raw materials Europe in a changing world Secure inclusive society Demonstrated solutions Industrial Leadership Enabling industrial technologies Innovation in SMEs Access to finance Business opportunities Excellence in Science Base Frontier research Excellence in future emerging technologies Skills and careers development Research infrastructures Requirements for new technologies 16
17 De-and Remanufacturing Plant: Research/ Teaching Factory A Pilot Plant for the De and Remanufacturing of automotive mechatronic components is being designed and installed at ITIA-CNR. The project has been co-funded by Regione Lombardia. It integrates disassembly, remanufacturing and recycling. Cell 1: Robotic Disassembly. Cell 2: PCB testing, repair and component disassembly. Cell 3: PCB shredding and separation. ITIA-CNR 17
18 De-and Remanufacturing Plant: Research/ Teaching Factory A Pilot Plant for the De and Remanufacturing of automotive mechatronic components is being designed and installed at ITIA-CNR. The project has been co-funded by Regione Lombardia. It integrates disassembly, remanufacturing and recycling. ITIA-CNR 18
19 Vanguard ESM Pilot Network De-and Remanufacturing The main goal of the Vanguard ESM De-and Remanufacturing Pilot Network is to: Integrate a multidisciplinary set of advanced and innovative enabling technologies (TRL8) in a new multi-regional Pilot Plant Network; Use the regional know-how, gathered from high-tech technology providers, universities and research centres, to offer a service to end-users, mainly manufacturing companies, to solve specific sustainability-oriented problems related to their products. Problem 2 Problem 1 Technology providers Enabling Technologies Vanguard Regions Demanufacturing Pilot Network Problem N Efficient and Sustainable Manufacturing, ESM Demanufacturing Pilot Plant 1 Business model Technological solution Scale-up and best prac ce End Users Know how Universities and Research centers Synergies Complementarities ITIA-CNR Vanguard Regions Other Pilots 19
20 Vanguard ESM Pilot Network De-and Remanufacturing A document has been delivered to the Vanguard ESM Steering Committee reporting the current configuration of the Pilot Network, the operational Business Plan, and the Governance of the Pilots. For more information: Region Technical contact Organization Lombardy Marcello Colledani Politecnico di Milano marcello.colledani@polimi.it Tampere Reijo Tuokko Tampere University of Technology reijo.tuokko@tut.fi Norte Luis Carneiro INESC Porto / PRODUTECH Cluster luis.carneiro@inescporto.pt Scotland Alison Hunter Scotland Europa alison.hunter@scotent.co.uk Saxony Katja Haferburg Fraunhofer Institute for Machine Tools and Forming Technology katja.haferburg@iwu.fraunhofer.de Basque Country Ane Irazustabarrena Tecnalia ane.irazustabarrena@tecnalia.com ITIA-CNR 20
21 Vanguard ESM Pilot Network De-and Remanufacturing A detailed analysis of specific sectorial Use Cases has been performed, involving the related industrial partners, in order to estimate the effectiveness of the Pilot Network business model. Regional/Cross-Regional Use Case Turbine blades in wind energy systems. Scotland Scotland Heavy machinery components remanufacturing. Automotive parts regeneration. Saxony TLC and Electronics systems Basque recovery. Basque Country Country Lombardy Lombardy Automotive car body parts Norte reprocessing Norte Remanufacturing of e-motor Tampere Tampere Involved Regions Basque Countries, Saxony, Lombardy, Tampere Tampere, Basque Countries, Lombardy Lombardy, Saxony Lombardy, Tampere Saxony Saxony, Lombardy ITIA-CNR 21
22 Real Cases: Remanufacturing at Knorr Bremse Objective: Proposing solutions for semi-automatic inspection and remanufacturing of mechatronic components. Predicted economic impact of the proposed hybrid automation solution. Scenarios Regeneration rate 70% (baseline) Regeneration rate 80% Regeneration rate 90% High wage countries Disassembly time: 50% Disassembly time: 30% PBT= 3 years CP=-7% PBT= 2 years CP=-15.5% PBT= 2 years CP=-22% PBT= 10 years CP=+21% PBT= 5 years CP=+8% PBT= 3 years CP=-1% PBT: Pay Back Time, CP: Cost per Part with respecy to currently adopted processes in low wage countries ITIA-CNR 22
23 Conclusions and Challenges Circular economy is a huge opportunity for European Manufacturers that can substantially contribute to: New highly skilled jobs. New technologies and systems to be exported worldwide. Availability of advanced products at lower price, also for emerging markets. Sustainable acceleration of manufacturing-use-upgrade cycles. However, specific strategies are needed to ripe the benefits of Circular Economy in Europe: Take a multi-level approach, addressing problems from technological to business model levels. Develop research and innovation pilots, with a strong industrial involvement, to demonstrate the feasibility of the solution. Boost science base to develop advanced solutions for de-and remanufacturing systems of the future. ITIA-CNR 23
24 from research. to market Strategies to ripe the benefits of Circular Economy in Europe. Prof. Tullio Tolio a,b (a) Director of ITIA-CNR, Institute for Industrial Technologies and Automation (b) Professor at the Department of Mechanical Engineering Politecnico di Milano Italy.
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