October 27, 2023

Webinar "As-A-Service: a path to circular success" key takeaways


The webinar Was a panel discussion about how "As-a-Service" business models can contribute to accelerating the circular economy. If you prefer to read rather than watch the recording, here are the key takeaways minute by minute:

From 0 to 15 minutes

Yann TOUTANT starts by outlining three aspects: 

1. Performance-based service encourages better maintenance and longevity of the equipment.

2. Concentration of ownership allows for easier collection and recycling.

3. Eco-design evolves as manufacturers expect products to be returned, enhancing their recyclability.

Jan Agri emphasizes resource efficiency and better customer education on sustainable product use. Piet Fischer talks about how governments are also adopting "As-a-Service" models for better resource management and sustainability. 

A shift in mindset, called "Be gentle with the rental," is discussed as essential for the long lifecycle of rented goods. The panel also touches on how other sectors, like banks and insurance companies, need to adapt to the new metrics of lifetime value to make the circular economy more effective.

In short, "As-a-Service" models seem promising for promoting circular economy principles.

From 15 to 30 minutes

The discussion focuses on integrating the circular economy into "As-a-Service" business models. Key points include:

1. Starting with mature customers helps to validate the service model.

2. There are challenges in establishing KPIs for circularity, especially without universal standards like ISO.

3. Switching from a transactional sale to an ongoing relationship is a challenge for suppliers.

4. Manufacturers should extend carbon neutrality efforts to the product's entire lifecycle.

5. Financing becomes complex, as returns take longer in a service model.

6. Public procurement processes could drive change but must be adjusted to favor As-a-Service models.

The participants agree that this shift is essential but tricky, especially without standardized metrics or supportive laws.

From 30 to 45 minutes

The text discusses the challenges and opportunities of adopting a "Product-as-a-Service" (PaaS) model. Jan Agri argues that while there may be challenges in implementing PaaS, particularly in sectors like public procurement, the obstacles are not insurmountable. The real issue is a lack of experience and the right competencies. 

Yann TOUTANT emphasizes the shift from selling products to delivering performance, adding a layer of performance risk to the business model. In this way, businesses transition from a focus on sales volume to value.

Digitalization is deemed crucial for PaaS. IoT, Big Data, and real-time analytics are considered game-changers. These technologies not only facilitate performance measurement but also help in predictive maintenance and customer personalization. 

There's also a discussion on sustainability. Products designed under PaaS are likely to be more durable and, thus better for the environment. But this has to balance against rapid technological advancements, which might make products obsolete quickly.

Finally, the panel talks about the need for behavioral change for PaaS adoption, suggesting that people need to be educated and convinced about the financial and environmental benefits.

Overall, the adoption of PaaS is viewed as complex but possible and beneficial from economic, performance, and sustainability viewpoints.

From 45 minutes to the end

The conclusion about the challenges and opportunities in implementing 'As-A-Service' and 'Circular' business models is the following:

1. Middle and top management are often resistant to new models but can be convinced over time.

2. Both vendors and users need to undergo an internal and external journey to adapt to these models. Having a champion helps.

3. Financial benefits of 'As-A-Service' are attractive, often serving as a gateway to circular business models.

4. Flexibility is a selling point but comes with costs. This needs to be negotiated and mitigated.

5. 'As-A-Service' fosters ongoing engagement between provider and user, enhancing long-term relationships.

The conversation wraps up by emphasizing the triple win for business, user, and environment. The blend of 'As-A-Service' and circularity is the future of sustainable and scalable business.

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