NEW MATERIALS – NEW BUSINESS MODELS
Tracey Rawling Church – Head of CSR, Kyocera Document Solutions (UK) Ltd
MATERIALS-ORIENTED BUSINESS
Kyocera Corporation
Core competence: fine ceramics
Global headcount: 71,500
Revenue: € 11,172 million
Profit: € 745 million
“We produce fine ceramics that are more resistant to heat, wear and
corrosion than plastics, metals or other conventional materials.”
VALUE-CENTRED STRATEGY
3
THE STATUS QUO: DESIGNED-IN WASTE
Components of a conventional
printer cartridge
INNOVATION: DESIGNED-OUT WASTE
Components of a Kyocera
printer consumable
RESOURCE EFFICIENT DESIGN CUTS
WASTE AND LIFECYCLE IMPACTS
Waste produced during a 300,000 page test conducted by Druckerchannel.de
Analysis by Best Foot Forward concluded that the carbon footprint of a
remanufactured laser cartridge is 46% lower than a corresponding new
cartridge, and that the carbon footprint of a Kyocera toner-only cassette is 55%
lower than a corresponding conventional cartridge
Analysis by TCPGlobal calculated whole-life cost savings of typically 50%
PRODUCT DESIGN IS ONLY THE START
1. Design based on lifecycle analysis – identify and design out high
impact materials and design features, considering their impacts at
every lifecycle stage
2. Streamline manufacturing processes – minimise energy/materials
waste
3. Optimise transport and distribution – packaging, routes, modal shift
4. Understand customers’ contribution to use-phase impacts – introduce
measures to promote responsible use
5. Close the loop where appropriate – create takeback programmes
that offer the most environmentally efficient outcome
Kyocera is working on a TSB-funded project
to find ways of ensuring that high quality
materials can be recovered from its end of
life products,- and those of other
manufacturers who design for disassembly
Kyocera is working with Forum for the
Future to understand why the Product-
Service Shift has worked in our industry,
so as to transfer the learning to others.
Example: Managed Document Services
Paradigm shift – moves the focus from devices to documents
The aim of an MDS project is to deliver efficient document flows with
• The smallest number of devices, appropriately located in the organisation
• Proactively maintained to maximise longevity
• Document management software to reduce the need to print
• User training to promote the use of energy/paper saving features
• Management information to continuously optimise the system
• Free takeback and recycling of hardware and consumables
• Pay-per-page pricing to discourage wasteful use
OPTIMISING BUSINESS MODELS
INNOVATION DEMANDS DISRUPTION
The mainstream laser printer industry is based around a fundamentally
wasteful product design – the single process cartridge – and a “razor and
blade” business model
The market has settled for a solution which seeks to mitigate the waste
impact by re-manufacturing consumables, rather than challenging the
fundamental design flaws in the product design and business model
Innovators in our industry have numerous barriers to overcome:
• Their competitors are not just printer vendors, but also cartridge
remanufacturers
• Legislation specifically promotes remanufacturing and disregards
resource-efficient product design
• Established procurement processes focus on securing deep hardware
discounts (cap-ex) and rarely consider whole-life costs (op-ex)
• Silos in customer organisations don’t support the level of collaboration
required to take advantage of innovative consumption models
INNOVATIVE BUSINESS MODELS
Service system
based on existing
product
Dematerialised
service Long-term
leasing
Conventional
hire
Peer-to-peer
rental
Short-term rental
Long-term
leasing with
linked service
Asset
management
Incentivised
return to third
parties
Collection of
used products
Incentivised
return to
manufacturer
Reducing
consumption
Durable products
Closed loop
recycling
Peer-to-peer
lending
Made to order
WRAP’s Innovative Business Model Map
THE OPPORTUNITIES FOR INNOVATION
Opportunity 1:
Design products to be more resource-efficient throughout their entire
lifecycle
Opportunity 2:
Design products to be more easily dismantled and reprocessed for resource
recovery at end of life
Opportunity 3:
Create new business models that decouple functionality from physical goods
Opportunity 4:
Work with customers to ensure they understand how to benefit from the
resource-efficient features of the product or service during the use phase
Opportunity 5:
Collaborate with providers of resource recovery services to close loops
locally
THE CHALLENGES (B2B PERSPECTIVE)
Challenge 1:
Manufacturers can only sell in innovative ways if customers are geared up
to purchase in innovative ways
Challenge 2:
Designing-in longevity incurs a price premium which can make hardware
appear expensive when in fact whole-life costs (direct and indirect) are lower
Challenge 3:
Few manufacturers are able to deliver every link in a service-led offer – we
must learn to collaborate with new partners and in new ways
Challenge 4:
Resource recovery/recycling infrastructures are immature and continuity of
supply of post-consumer materials is unreliable
Challenge 5:
Policy landscape doesn’t support disruptive innovation
CLOSED LOOP, OPEN LOOP OR HELIX?
Ellen Macarthur Foundation
PUBLIC SECTOR CHALLENGES
The tender process stifles innovation:
If an invitation to tender is written around a hardware specification, the
supplier cannot bid a dematerialised or service-led offer – he’ll simply be
disqualified
• Outcome based tenders provide the freedom to innovate around a goal
Hardware cost has disproportionate influence on procurement:
Sustainability data gathered as part of the vendor selection process rarely
plays a part in the final procurement decision
• Whole life costs – both direct and indirect – could be embedded in the
targets of procurement professionals
Smokestacks prevent collaborative consumption:
Emerging business models provide extensive opportunities for government
departments to share hardware and services, cutting both cost and carbon
• A more holistic approach to ICT infrastructures can enable collaborative
consumption, dematerialisation of services and improved efficiency
IN CONCLUSION
Resource inefficiency is a systemic problem which is best addressed by
going back to product fundamentals and designing out waste from product
designs, supply chains and business models
This cannot be resolved by manufacturers alone – we need to collaborate
with service providers, policymakers and customers to create conditions
that foster disruptive innovation
Kyocera is working with Green Alliance on
the Circular Economy Task Force – to try to
understand how circular business models
can be developed in a way that keeps
companies profitable, and how the policy
landscape can better help to foster a
circular, resource secure economy
© 2013 ᅳ KYOCERA Document Solutions
http://www.kyoceradocumentsolutions.co.uk
All rights reserved.
THANK YOU!
04/11/2013Presentation title 16
Tracey Rawling Church
Head of Corporate Social Responsibility
Kyocera Document Solutions (UK) Ltd
http://twitter.com/traceyrc