Circular Business Models for Highly Customized Technical Products
(2024) MIOM05 20241Department of Mechanical Engineering Sciences
Production Management
- Abstract
- With an increasing emphasis on sustainability, and the necessity to align with new regulations, companies face the challenge of transforming their business models to incorporate circularity. Many companies today operate according to a linear business model, where products are designed for consummation and disposal. However, to comply with new demands surrounding sustainability, companies will need to commit to a circular economy, extending products value beyond first use.
Reuse refers to that products or components are used again for the same purpose for which they were conceived, and should be applied when possible, to reduce waste and energy consumption. Circular business models require commitment to circularity in all dimensions of... (More) - With an increasing emphasis on sustainability, and the necessity to align with new regulations, companies face the challenge of transforming their business models to incorporate circularity. Many companies today operate according to a linear business model, where products are designed for consummation and disposal. However, to comply with new demands surrounding sustainability, companies will need to commit to a circular economy, extending products value beyond first use.
Reuse refers to that products or components are used again for the same purpose for which they were conceived, and should be applied when possible, to reduce waste and energy consumption. Circular business models require commitment to circularity in all dimensions of the business model. This give rise to several challenges which needs to be addressed. Products with higher level of complexity and customization are especially difficult to achieve sustainable circularity for.
This thesis investigates the potential for implementing circular business models in the context of highly customized technical products. The thesis is executed as a qualitative case study, and the research is designed as a mix of an exploratory and a problem-solving study. The research approach is abductive, where the empirical data is collected through interviews and a literature review.
The thesis results in both general conclusions and case company specific recommendations. Firstly, for reused highly customized technical products, the value proposition should include a guarantee on quality, a sustainability certificate, be offered at a competitive price and be available with a shorter lead time than a newly produced product. Secondly, value delivery specifications surrounding product design, reverse flow, the process, and communication of the offer is presented. Companies needs to design for reuse, enable as many reverse streams as possible, evaluate appropriate storage locations, have set processes for quality assurance, and focus the marketing of the offer to the right people. Furthermore, trainings in circularity are necessary for both employees and customers. Finally, areas such bureaucracy, uncertainty avoidance, short-termism and resource allocation are identified as common barriers for companies to implement circular business models. Analysis of upcoming regulations within the EU also identifies that the right time for companies to implement circularity is now. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9162934
- author
- Eliasson, Klara LU and Mattsson, Frida LU
- supervisor
- organization
- course
- MIOM05 20241
- year
- 2024
- type
- H2 - Master's Degree (Two Years)
- subject
- keywords
- Circular Business Models, Reuse, Value Proposition, Value Delivery, Highly Customized Products, Technical Products
- other publication id
- 24/5282
- language
- English
- id
- 9162934
- date added to LUP
- 2024-06-25 15:19:32
- date last changed
- 2024-06-25 15:19:32
@misc{9162934,
abstract = {{With an increasing emphasis on sustainability, and the necessity to align with new regulations, companies face the challenge of transforming their business models to incorporate circularity. Many companies today operate according to a linear business model, where products are designed for consummation and disposal. However, to comply with new demands surrounding sustainability, companies will need to commit to a circular economy, extending products value beyond first use.
Reuse refers to that products or components are used again for the same purpose for which they were conceived, and should be applied when possible, to reduce waste and energy consumption. Circular business models require commitment to circularity in all dimensions of the business model. This give rise to several challenges which needs to be addressed. Products with higher level of complexity and customization are especially difficult to achieve sustainable circularity for.
This thesis investigates the potential for implementing circular business models in the context of highly customized technical products. The thesis is executed as a qualitative case study, and the research is designed as a mix of an exploratory and a problem-solving study. The research approach is abductive, where the empirical data is collected through interviews and a literature review.
The thesis results in both general conclusions and case company specific recommendations. Firstly, for reused highly customized technical products, the value proposition should include a guarantee on quality, a sustainability certificate, be offered at a competitive price and be available with a shorter lead time than a newly produced product. Secondly, value delivery specifications surrounding product design, reverse flow, the process, and communication of the offer is presented. Companies needs to design for reuse, enable as many reverse streams as possible, evaluate appropriate storage locations, have set processes for quality assurance, and focus the marketing of the offer to the right people. Furthermore, trainings in circularity are necessary for both employees and customers. Finally, areas such bureaucracy, uncertainty avoidance, short-termism and resource allocation are identified as common barriers for companies to implement circular business models. Analysis of upcoming regulations within the EU also identifies that the right time for companies to implement circularity is now.}},
author = {{Eliasson, Klara and Mattsson, Frida}},
language = {{eng}},
note = {{Student Paper}},
title = {{Circular Business Models for Highly Customized Technical Products}},
year = {{2024}},
}