Sustainable Product Development in a Circular Economy

The concept of circular economy is of great interest to companies since it provides a framework to align with the Sustainable Development Goals. So far, little attention has been paid to how circularity principles impact product development process. Consequently, product developers working in manufacturing industries were interviewed about the contextual factors of process implementation as part of the European Union’s Horizon 2020 CRESTING project. Part of the project team and author of this blog post’s underlying report is the Christian Doppler Laboratory for Sustainable Product Management at University of Graz, Austria, co-funded by iPoint-systems. Learn more about the findings of the research project in this blog post.

What is there: the WHAT

Circular economy (CE) is of great interest for companies as it should allow them to align organizational objectives with the Sustainable Development Goals (SDGs). Over the years, circular products have been recurrently showcased by its advocates in a broad range of appealing channels and formats [1][2][3]. This has been extremely useful to inspire an all-encompassing audience to dream of a better world filled with beautiful products that are economically viable, environmentally friendly and socially desirable. Meanwhile, knowledge about circular products has been strongly advanced in academia as well. Scholars of sustainable design disciplines and alike have operationalized CE into design guidelines for circular products, as well as critically analyzed the pros & cons of their sustainability performance in numerous case studies [4][5][6].

What we are understanding: the HOW

Less attention has been paid to how circularity principles impact the series of events that allow to deliver a new product or improve an existing one, a.k.a. the product development process. In the first publication of the CRESTING Work Package 2.2, we conducted 15 interviews with product developers working in manufacturing industries and inquired them about the contextual factors of process implementation — process phases, product dimensions addressed, actors, decision-making support, evaluation criteria and lifecycle information management. The five key messages from the insights provided by this research are the following:

1. Do not miss the task clarification phase

Achieving products’ high quality at low costs and short time-to-market leads companies start the development at late design stages, using previous models as a base. This prevents product planners discuss systemic issues and reconsider the value proposition, which in some cases could be achieved through a different ownership model or without a physical product. Starting the discussion at later design stages might lead only to incremental sustainability improvements and result in low value-retention CE strategies.

2. Capture circularity in product evaluation routines

A technical and economic evaluation of new designs occurs in all phases of the development process, often using weighted indicator matrixes. Sometimes, compliance-driven environmental performance is considered, but life cycle assessments — which are useful to monitor the actual sustainability benefits of circular products — are often done once the product is on the market. Social performance is hardly ever considered. Product planners could leverage evaluation routines and incorporate indicators of circularity and sustainability in their performance tables.

3. Map the lifecycle information

Monitoring if circular lifecycles are actually met helps prevent burden-shifting of sustainability impacts. For this, organizations need to fill the existing gaps in data and information flows and extend the information traceability accomplished regarding the beginning of life phases (i.e. formulators, smelters, parts’ suppliers) to the use phase (i.e. remanufacturers) and the end-of-life phases (i.e. end-of-(first) life managers).

4. Engage with new actors that can influence all design dimensions

As high value-retention circular products reconsider further aspects than material or architecture and — often innovate at the service, business model and ecosystem levels — it is needed to engage with inter-organizational actors (suppliers, users, end-of-life managers, outsourced service providers…) during the development process. For instance, changes in the business model are intertwined with the company strategy, and thus, product planners need to involve management as well.

5. Check the organizational culture and the process alignment

Cross-functional discussions and inter-organizational interactions involve a great diversity of communication styles, background expertise and power dynamics. Exchanges with other market players or question customers’ linear requirements implies not only the definition of different process roadmaps but also a change of organizational mindsets.

What we need to be aligned on: the WHY

Among interviewees, it was clear that some regarded circularity as a means to economic benefits, others as a synonym for an incrementally improved environmental performance and others as a deep socio-technical transition towards more sustainable societies. As many scholars have observed already[7], CE is very often used as an umbrella word and might sometimes be misleading in attributing some additional value to long-existing practices. As the topic gains space in global stages and in the light of current environmental, social and economic pressures, seems urgent that advocates are clear about which global priorities is CE serving the most.

Authors:
Anna Diaz, Institute of Systems Sciences, Innovation and Sustainability Research (University of Graz)
Josef Peter Schöggl; Rupert J. Baumgartner, Christian Doppler Laboratory for Sustainable Product Management enabling a Circular Economy (University of Graz)

Original academic publication (Open Access): Sustainable product development in a circular economy: implications for products, actors, decision-making support and lifecycle information management

This article is part of the CRESTING project, which is financed by the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No 765198.

[1] https://www.ellenmacarthurfoundation.org/explore/circular-design

[2] https://knowledge-hub.circle-lab.com/

[3] https://www.circulareconomyclub.com/gd-home/cec-global-database/

[4] https://doi.org/10.1016/j.jclepro.2014.01.028

[5] https://doi.org/10.1111/jiec.12610

[6] https://doi.org/10.1080/21681015.2016.1172124

[7] https://onlinelibrary.wiley.com/doi/pdf/10.1111/jiec.12603