From cradle to cradle: Why industry must embrace the circular economy

In this guest post, Lisa Wee, global head of sustainability at IT consultancy AVEVA, outlines the environmental benefits of embracing the circular economy

The World Economic Forum has referred to the circular economy as the business opportunity of our time, because of its potential to strengthen local economies and societies while decoupling the world’s growth from consumption. Yet the global economy is currently only 7.2% circular.

Analysts estimate that to bring human activity in line with safe limits for the planet, we need to reduce material extraction and consumption by one-third. Efficient and more circular use of materials in just four industrial segments (cement, steel, plastics and aluminium) can help reduce global greenhouse (GHG) emissions by 40% by 2050.

From linear to connected networks of intelligence

Industrial companies have historically followed a linear path that relies on the idea that resources are plentiful and will be available across the life of the business. But as resource scarcity and the impact of the take-make-waste model become apparent, the industrial community is being challenged to rethink its approach.

Companies can now leverage next-generation digital solutions to build more transparent and sustainable value chains and enhance circularity both for existing production models as well as greenfield projects. Digital twins, artificial intelligence (AI) and edge-to-cloud computing are arming business with newfound levels of insight and empowering teams to reimagine projects and products while driving agility, resilience and sustainability.

Together, these technologies create interconnected networks of intelligence that help industries to develop new products that are circular by design and redefine collaboration across their existing value chains to facilitate a more holistic and circular approach to resource lifecycles.

Clarity about circularity

The path to long-term viability and sustainability lies in a circular model that embraces lifecycle thinking. It isn’t enough for industrial production to become more efficient and generate less waste. Businesses must also work to retain existing value and create new value from industrial materials to close the loop. This ‘cradle to cradle’ approach ensures that from the outset, goods are recyclable, resources are conserved, waste is minimised, and the overall environmental impact is significantly reduced.

Data is critical to this approach, particularly when leveraged across a connected ecosystem with various inputs from the entire industrial process enabling more holistic and advanced analysis and optimisation. From the earliest stages of design and sourcing raw materials to disposing of the final product, connected industrial ecosystems provide real-time insights so teams can make more informed decisions aligned with circularity goals.

Leading by example

From starting in the design phase to optimising operations, connected industrial ecosystems can enhance circularity and drive sustainability transformation across a wide range of sectors.

  • Use less as part of the manufacturing process: Connected industrial ecosystems allow seamless tracking and analysis at every step of the product journey. From sourcing raw materials to manufacturing, distribution, use, and eventual disposal or recycling, they offer a bird’s-eye view of the entire lifecycle, enabling companies to use fewer resources for a longer time. Measurable improvements include identifying and reducing inefficiencies, pinpointing improvements, process optimisation and waste reduction—all on an ongoing basis. When Danone used a core Manufacturing Execution System for end-to-end traceability across its factories in Indonesia, it was able to standardise KPIs, compliance reporting and supply chain integration across multisite operations, and reduce energy use and waste. Danone is now extending the successful approach across its global network.
  • Use longer critical equipment and assets: The global race to net zero is rapidly changing electricity generation mix. ENEL, a leading global energy company with expertise in renewable power, has been using artificial intelligence-based predictive analytics for more than five years to boost production efficiency and extend the life of power generation equipment. Previously, ENEL monitored equipment health by having many experts, usually local to the equipment, manually review information coming from hundreds of Internet of Things (IoT) sensors measuring temperatures, pressures, flows, vibrations on their equipment day-by-day, searching for abnormal behaviour. By centralising the information into one digital platform and leveraging AI, the team was able to detect, diagnose and mitigate issues long before they pose a risk to production. Over 220 real events were detected early so failures could be prevented and the life of critical assets lengthened.
  • Make clean and profitable new materials: Digital twin solutions empower engineers to simulate, test and optimise processes within a virtual space. This approach cuts the cost curiosity in the early phase of a project because multiple designs for processes and plants can be evaluated while change is still inexpensive. Global chemical giant Covestro has publicly committed to becoming fully circular and accelerating the transition to a fossil-free economy. A long-time user of digital twin technology, Covestro has been able to optimise plant operations by matching real-time data with simulation information. As a result, time spent on maintenance is significantly reduced, unplanned shutdowns are avoided and less resources are used. As part of their ambitious circularity pledge, Covestro is also now using digital capabilities to create new chemical polymers that are aligned to a closed loop circular economy. By leveraging data from across their connected operations, new bio-based products can be produced reliably and profitably, accelerating the rate at which these green materials can be scaled.

Pathway to our climate neutral future

Digital technologies are integral to accelerating our net-zero future. As the world approaches the halfway mark to the UN Sustainable Development Goals 2030 deadline, it’s imperative that we all play our part. Connected industrial ecosystems hold the potential to revolutionise industrial business by infusing lifecycle thinking into their DNA. Industry, transport, and electricity currently account for over 75% of global emissions.

With increasing environmental concerns and evolving consumer expectations, businesses that lead by example and prioritise circularity and sustainability, will retain the competitive advantage. Use less, use longer, use again, and make clean are just the guiding principles we need.

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