March 28, 2023

Defragmented ownership


As-A-Service provides the possibility for customers to satisfy their needs without the burden of ownership. The user benefits from the usage of the product, but does not have to deal with the end-of-life decisions and management.

It means that the manufacturer or the integrator owns the product and subsequently, is in charge of maintaining the product in as near to purchase day condition as possible. To be profitable, the organizations implementing the As-A-Service business model must offer strong and durable products that will satisfy the users for as long as possible.

After the first usage cycle, the manufacturer or integrator is in charge of the collection step and (depending on the auditing) will decide whether to send it to the next user or to reintroduce it in the production step (see the article the R strategies).

Thanks to a strong product design that answers the needs of more than one user, it is economically advantageous for the manufacturer or the integrator to reintroduce products back to the market. It means more revenues obtained through just one extraction and production cost.

If the product is no longer usable, the manufacturer or integrator can still retrieve its components, thus making savings on the lessened need for raw materials purchases.

Defragmented ownership also allows for circularity as one product in use for a longer period of time means reduced environmental and social impacts on the planet. For example: the extraction of Tungsten (used in a wide variety of industries from electronics to aerospace), as with many mined products, is a highly debated one due to the enormous impacts on both the environment and those communities living near to where such activities occur. The need for tungsten (which also happens to be a rare critical mineral) is reduced if one smartphone has many users. The ability to re-use such materials as these provides opportunities across multiple sectors in terms of financial recovery and reduced negative impact.

Additionally, with defragmented ownership, the manufacturer or integrator has morecontrol of the end-of-life of the product and has the responsibility to dispose of the assetproperly when it is truly no longer usable. This means that the risk of the products endingin a landfill is reduced. The goal is to make sure that the product and its components aretruly used to their full potential and eliminate unnecessary wastage.

During a recent discussion with other experts on circular economy, the topic of concentrated ownership equating to concentrated power in the hands of a few was raised. It is indeed one of many valid concerns that warrants deeper discussions around the subject of concentrated ownership, and the viable solutions to counter it. Control goes beyond ownership, a user is not free once they own a product. When a manufacturer applies planned obsolescence to its products (for example, by installing a chip in theproduct that will stop it from working after a couple of years), the manufacturer ensures that they keep control of it, and this results in the user cannot being unable to enjoy the product for as long as they had envisioned. Transparency is crucial in As-A-service and is key for the circular economy. Being clear about how the products are made and what the solution is after the take-back activities is essential. Moreover, states will need to regulate and mitigate the negative risks of the concentration of power.

Overall, there are a numer of economical opportunities for a company to retain the ownership of their products as it will save costs on raw material purchases and production cost. Also, since the components of a product are reused and/or recycled, the environmental impacts are reduced thanks to the lowered mining production pollution.

What are your thoughts on defragmented ownership as a way to achieve circularity?

If you are curious about Black Winch, check out our whitepapers and videos to know more about circularity and As-A-Service! Or contact us directly:

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