Steward Assets

Identify opportunities for supply chain circularity

Develop supply chain circularity by identifying opportunities to loop products, components, and materials back into your supply chain to be reused, refurbished, or recycled. This requires adapting your business models and processes to facilitate stewardship over key materials and components throughout the life cycle. For instance, you can gain influence over products beyond the point of sale by incentivising returns through deposit-refund schemes and buy-back programs.^{1, 2, 3} You may also consider exploring products-as-a-service models like renting, leasing, and subscriptions.

Value recovery also applies to unsold, returned, or defective products. Although it may be convenient to destroy surplus products, there are financial and reputational costs associated with doing so.⁴ You can make better use of these resources by disassembling and reusing them, de-branding and donating them,⁵ or selling them at a discounted rate.⁶

EXAMPLE: Taking Care of Business partners with retailers to address waste from dead stock

Taking Care of Business partners with South African retailers to address excess merchandise that has been returned by customers or hasn’t been sold in a season. When retail partners and manufacturers donate unsold and returned products that are sorted and debranded. Then underemployed individuals are provided training and access to capital to develop businesses based on repair and resale of these products.⁷

EXAMPLE: Audi explores second-life opportunities for EV batteries

Audi has partnered with the start-up Numan to explore how EV batteries can be given a second life after they are no longer useful as a car battery. The project is repurposing used battery modules from Audi’s e-tron test fleet to power electric rickshaws in India.⁸

EXAMPLE: Jaguar Land Rover collaborates to create a closed-loop aluminium supply chain

The REcycled ALuminium CAR Project (REALCAR) is a collaborative effort between automotive manufacturer, Jaguar Land Rover, and its rolled aluminium supplier, Novelis, to create a closed-loop value chain for aluminium. This case study shares the lessons learned on collaborating for value chain transformation, which is broadly applicable across sectors.⁹

EXAMPLE: Philips refurbishes and upgrades used equipment

Philips has a reuse business model for medical equipment such as MRI and CT scanners. It works by allowing hospitals to trade in their used equipment in exchange for a discount on the latest technology. The used equipment is looped back into Philips’ supply chain so that it can be refurbished and upgraded. It is then sold to new customer segments at an affordable price.¹⁰

EXAMPLE: HP moves to a product-as-a-service model for printer ink

HP Inc. has transitioned from selling printer ink cartridges to offering “‪Instant Ink”, an ink subscription service. This service model helps reduce environmental and financial costs by using larger cartridges (fewer shipments and packaging) and ensuring used ones are recycled.¹¹

Extend the life span of products and equipment

You can extend the useful lifespan of products and equipment by empowering end-users to maintain, repair, or upgrade them.¹² This means procuring replacement parts and tools, and making them available to end-users. End-users can be your customers or, for indirect procurement, internal business functions. In either case, you also need to ensure there is awareness of the option to extend the useful life of products or equipment, and provide instruction on how it can be done, whether DIY or professionally.

The key to making this work is to ensure that it is more economical for end-users to repair than to replace. You can create evaluation criteria to help show end-users the financial and environmental benefits of extending the useful life.

EXAMPLE: Fairphone enables simple DIY repair

The cellphone company, Fairphone, drives supply chain circularity by offering customers affordable spare parts and tutorials for simple do-it-yourself repairs that extend product lifespans.¹³ The company also supports the reuse and recycling of old phones through a take-back program.^{14 15}