The CPQ Blog

Supporting Circular Economy Practices in Manufacturing

Written by Magnus Fasth | Mar 23, 2023 7:26:00 AM

The circular economy is a model of production and consumption that aims to reduce waste, conserve resources, and minimize environmental impact.

In this article, we will explore how Configure Price Quote (CPQ) systems can play a role in supporting circular economy practices in the manufacturing industry.

What is a Circular Economy?

A circular economy is an alternative to the traditional linear economy, which is based on a "take, make, use, and dispose" model. In a circular economy, resources are kept in use for as long as possible through recycling, remanufacturing, and repurposing. This approach helps to conserve resources and minimize waste.

How CPQ Can Support Circular Economy Practices in Manufacturing

In the traditional linear economy model, manufacturing often involves extracting new raw materials to create new products. In a circular economy, however, manufacturing is based on reusing and repurposing existing resources.

CPQ systems can play a role in supporting circular economy practices in manufacturing by helping companies to extract data from existing products and use it to improve future configurations and upgrades. This can prolong the service life of the equipment, reducing the need for extracting new resources and minimizing waste.

Case Study: Reusing Requirements for Truck Configuration

Reusing requirements for truck configuration is a prime example of how CPQ systems can support circular economy practices in manufacturing. By extracting usage data from a company's fleet of trucks, companies can use that information to improve the configuration of future vehicles. This can lead to more efficient and sustainable transportation and logistics. This is a cost-effective way to improve the sustainability of the transportation industry, by reducing the emissions and fuel consumption of the trucks, which are major contributors to air pollution and climate change.

By reusing the requirements, CPQ systems help the companies to extract value from the data, use it in their decision making process and achieve better results in terms of energy efficiency and reducing the carbon footprint. It allows companies to optimize the performance of their fleet, by identifying and addressing areas where improvements can be made. This can lead to lower maintenance costs, fewer breakdowns, and ultimately, a more sustainable transportation system.

Additionally, this approach can also help trucking companies to meet regulatory compliance and governmental regulations related to emissions and fuel efficiency. By reusing requirements for truck configuration, companies can create a more sustainable and environmentally-friendly fleet of vehicles, which will help them to comply with these regulations, while also reducing their environmental impact. This is a win-win situation for both the companies and the environment.

Green Premium: The Cost of Choosing Carbon Neutral

Green Premium is the extra cost a customer needs to pay to achieve zero carbon emissions. It is the additional price for choosing a product or service that has a lower environmental impact. This can include things like electric cars, solar panels, or energy-efficient appliances. As more and more companies adopt circular economy principles and aim to reduce their carbon footprint, the green premium is becoming an increasingly important consideration for both consumers and businesses.

When it comes to CPQ and circular economy, Green premium is an important aspect to take into account. With the help of CPQ systems, companies can collect usage data and real time cost of products and services. This information can help companies to make better and sustainable choices when it comes to production, logistics and eventually lower the green premium cost.

The concept of the green premium has been around for some time, but it is only now, with growing concerns about climate change, that it is becoming a more mainstream consideration. This is true in both the consumer and business sectors, where companies are realizing that they can no longer afford to ignore the environmental impact of their products and services. By looking at the green premium and implementing cost-saving measures, companies can reduce the cost of their environmentally friendly products, making them more competitive and accessible to consumers.

The Potential for CPQ to Help Achieve Net Zero Emissions

CPQ systems have the potential to play a crucial role in achieving net zero emissions. By collecting and analyzing data from existing products, companies can make better and more sustainable decisions about production, logistics, and overall operations. This information can be used to improve the performance of equipment, reduce the carbon footprint of products, and minimize waste.

CPQ can also support companies in creating their plan towards net zero emissions, by providing real-time data, cost and emission analysis. This can help to identify areas where improvements can be made, and make it possible to set and track progress towards emissions reduction goals. With the help of this information, companies can take concrete steps towards achieving net zero emissions, and contribute to a more sustainable future.

In addition, CPQ systems can also help companies to comply with regulations and standards related to emissions and sustainability. By providing accurate data and analysis, companies can demonstrate their progress towards net zero emissions, and meet compliance requirements. This can not only help to protect the environment, but it can also give companies a competitive advantage by positioning them as responsible and sustainable businesses.

Conclusion

In conclusion, CPQ systems can play a key role in supporting circular economy practices in the manufacturing industry. By extracting data from existing products, companies can improve future configurations, upgrades, and prolong the service life of equipment, reducing the need for extracting new resources, and minimizing waste. Here are a few tips to get started with using CPQ in support of a circular economy:

  • Extract data from existing products to improve future configurations and upgrades
  • Look for opportunities to reuse requirements for configuration, such as in the transportation industry
  • Consider the total cost of ownership, including the green premium, when making purchasing decisions to minimize environmental impact

Next Steps

Incorporating CPQ systems in support of circular economy practices in the manufacturing industry is a step towards a more sustainable future. Companies can start by identifying opportunities to extract data from existing products, and using it to improve future configurations and upgrades.

Additionally, companies can explore ways to reduce their green premium, and consider the total cost of ownership when making purchasing decisions. Companies should also continue to explore new ways that technology can be used to conserve resources, reduce waste, and minimize environmental impact, as the use of CPQ in circular economy is only one of the many ways technology can be used to improve sustainability.

As the concept of circular economy is gaining momentum and more and more companies are looking for ways to implement it in their business model, the use of CPQ systems as a tool to support these practices is becoming increasingly important. It offers new ways to extract value, re-use and prolong the service life of equipment and in the end contribute to a more sustainable future.