°®¶¹´«Ã½app has recently participated in the EU Commission funded Horizon 2020 project studying circular economy in context of two demonstrations. The project is called Resource-efficient Circular Product-Service Systems a.k.a ReCiPSS.
°®¶¹´«Ã½app Finland Managing Director Perttu Korpela tells us why participating is important to him and the group, as we continue our objective of helping customers overcome the challenges of Digital transformation.
The Circular Economy
The Circular economy poses a need for enterprises to reinvent their business. The business can no longer be based solely on one-directional logistics and value chains. Traditionally a product’s value increases during manufacturing and shipping processes, in the beginning of product’s life cycle. The value slowly decreases during operation phase and might be zero or even negative (waste) when product is decommissioned after it has reached the maximum operation time. Many enterprises have built their business models based on maximal efficiency in this one-way value stream.
Circular economy requires enterprises to rethink the business to not only build value into building and commissioning products, but also in decommissioning and recycling the products. Resource efficient business requires looking at alternative revenue streams besides producing new products. Common alternative revenue streams are:
After sales and service is already, today, a big profit source for many manufacturing companies. Efficiency and ease of sales are needed to compensate reduced product sales.
Pay per use (PPU) or leasing the product instead of selling it is a viable option. Both business models give better margins if products last longer and require less services. Transparency and trust between product manufacturer and customer are keys to make it beneficial for both.
To sell spare parts and services, companies need to be able to track every shipped product instance through their life cycle. Products manufactured at different times are built using different supplier parts or have other improvements. Also tailoring the product for customer needs with options and variants is increasingly common.
This leads into a situation that delivered products are more and less unique. Capturing the variability, spare parts and service history requires combining data from multiple business systems such as PLM, ERP and SLM. Presenting the data in an intuitive format requires new ways of connecting and experiencing it.”
So, what are the building blocks of digital twin?
First a full product structure including physical and software components. In fact, this needs to be developed to a level where material composition of each physical component is known. Then efficient recycling or refurbishing benefits from good understanding of valuable materials included in components.
Next, install base management and service history. To support products in field better, each product must be tracked after the shipment in an install base management system. A good install base management system allows tracking part replacements for each product instance.
Connecting business systems to machines in the field through Industrial IoT. Business systems provide information about structure and machine connectivity provides monitoring information about product’s operations conditions, running hours and service history. Machine learning enables predicting failures and provides service alerts prior the actual failure.
Augmented reality to provides customer or service personnel the information relevant to users and to product individual, all within a comprehensible format. The same user interface needs to provide data about the product, its’ service and operation history, as well as its reverse logistics options etc. There is so much data available from different sources that it must be contextualized and visualized for each user at the time of consuming it.
Other digital twin building blocks, such as simulation, might also contribute to circular economy by prolonging product life expectancy and predicting its’ durability in actual operating environment.
To sum the above, digital twin is far from being only a buzz term. It is a term that concretizes and connects seemingly disconnected technologies into a real-world business need. The quicker world adopts new way of doing business, the quicker technologies mature to enable the change.”
If you like to know more about Circular Economy and what we at °®¶¹´«Ã½app do to support the Circular Economy, please do not hesitate to contact us.
More information about project itself can be found from project .
