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Economic and environmental impact of circular business models: A case study of White Goods-as-a-Service using multi-method simulation modelling
KTH, School of Industrial Engineering and Management (ITM), Production Engineering, Manufacturing and Metrology Systems.ORCID iD: 0000-0002-1965-5571
KTH, School of Industrial Engineering and Management (ITM), Production Engineering, Manufacturing and Metrology Systems.ORCID iD: 0000-0002-5960-2159
2023 (English)In: Journal of Cleaner Production, ISSN 0959-6526, E-ISSN 1879-1786, Vol. 407, article id 137147Article in journal (Refereed) Published
Abstract [en]

Circular business models are gaining traction in academia and industry as an instrument to deliver environmental benefits while being economically profitable. Despite this increased interest, studies that quantitatively assess the impact of circular business models are limited. This study provides researchers and practitioners with a quantitative analysis tool to assess the dynamics of circular business models from both an economic and environmental perspective. Using the case study of white goods-as-a-service, this study employs multi-method simulation modelling in combination with statistical design and analysis of simulation experiments to investigate the effect of different factors including payment schemes (i.e., fixed fee, pay-per-use, and hybrid) and subscription contract duration (i.e., long-term, mid-term, and short-term) on the economic and environmental performance of access-based models. In addition, as the adoption of access-based models is economically challenging for manufacturers due to a discrepancy between costs and revenue streams, this study analyses the effect of different levers to improve the liquidity performance of access-based business models including deposit schemes, cancellation and collection fees, as well as partnering with financial institutions to cover the initial revenue gap. 

Place, publisher, year, edition, pages
Elsevier, 2023. Vol. 407, article id 137147
Keywords [en]
circular business models, multi-method simulation, pricing strategy, design of experiments, circular manufacturing systems, circular economy
National Category
Engineering and Technology
Research subject
Production Engineering
Identifiers
URN: urn:nbn:se:kth:diva-321523DOI: 10.1016/j.jclepro.2023.137147ISI: 000986013000001Scopus ID: 2-s2.0-85152602643OAI: oai:DiVA.org:kth-321523DiVA, id: diva2:1711466
Note

QC 20230530

Available from: 2022-11-17 Created: 2022-11-17 Last updated: 2023-05-30Bibliographically approved
In thesis
1. Circular Manufacturing Systems: Complex systems modelling and simulation for enhanced decision-making
Open this publication in new window or tab >>Circular Manufacturing Systems: Complex systems modelling and simulation for enhanced decision-making
2022 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

A transition towards circular manufacturing systems (CMS) has brought awareness of untapped economic and environmental benefits for the manufacturing industry. Despite this increased interest, the implementation of CMS is still in its infancy stage. To support the manufacturing industry in implementing CMS in practice, this research seeks to (1) explore the main characteristics of CMS and their needs for a successful implementation in the context of the manufacturing industry, and (2) develop quantitative analysis tools to support decision-making in implementing CMS with a concurrent focus on economic and environmental performance. By viewing CMS as complex adaptive systems (CAS), this research proposes to exploit complex system modelling and simulation used in the study of CAS to characterise, model, and analyse CMS. In this regard, a multi-method simulation model architecture that combines features of agent-based, discrete-event, and system dynamics modelling methods is proposed to model and simulate CMS as different abstraction levels are needed to capture the complex and dynamic interactions among the elements of the system. The resulting multi-method simulation tool aims at providing systemic quantification of CMS in terms of economic performance (e.g., lifecycle costs, lifecycle revenues, and lifecycle profits), environmental performance (e.g., lifecycle environmental impact), and technical performance (e.g., quality, quantity and timing of product return flows), and therefore, facilitates decision-making for industrial organizations implementing CMS in practice.

Abstract [sv]

En övergång till cirkulära tillverkningssystem (CMS) har skapat medvetenhet om outnyttjade ekonomiska och miljörelaterade fördelar för tillverkningsindustrin. Trots det ökade intresset är implementeringen av CMS fortfarande i sin linda. För att stödja tillverkningsindustrin med att implementera CMS i praktiken, strävar denna forskning efter att (1) utforska de viktigaste egenskaperna hos CMS och de behov som finns för att en framgångsrik implementering av CMS i tillverkningsindustrin ska kunna ske, och (2) utveckla kvantitativa analysverktyg som kan användas som beslutstöd vid implementering av CMS med samtidigt fokus på ekonomisk och miljömässig prestanda. Genom att behandla CMS som komplexa adaptiva system (CAS), föreslår denna forskning att utnyttja komplex systemmodellering och simulering som används i CAS för att karaktärisera, modellera och analysera CMS. I detta avseende föreslås en arkitektur för multimetodisk simuleringsmodell som kombinerar egenskaper från agentbaserade, diskret händelsestyrda, och systemdynamiska modelleringsmetoder för att modellera och simulera CMS. Denna kombination är nödvändig för att fånga de komplexa och ömsesidiga interaktionerna mellan delarna i systemet. Den resulterande multi-metodiska simuleringsmodellen syftar till att ge insikter om hur CMS beter sig i termer av ekonomi (t.ex. livscykelkostnader, livscykelintäkter och livscykelvinster), miljömässighet (t.ex. miljöpåverkan under livscykeln) och teknisk prestanda (t.ex. kvalitet, kvantitet och tidpunkt för produktreturflöden) och därigenom underlättar beslutsfattande för industriella organisationer som vill implementerar CMS.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2022. p. 127
Series
TRITA-ITM-AVL ; 2022:38
Keywords
circular economy; circular manufacturing systems; complex adaptive systems; multi-method simulation modelling; lifecycle costing; lifecycle revenues; lifecycle environmental impact
National Category
Engineering and Technology
Research subject
Production Engineering
Identifiers
urn:nbn:se:kth:diva-321577 (URN)978-91-8040-430-3 (ISBN)
Public defence
2022-12-09, Kollegiesalen / https://kth-se.zoom.us/j/64628471501, Brinellvägen 8, Stockholm, 09:00 (English)
Opponent
Supervisors
Projects
ReCiPSS Resource-Efficient Circular Product-Service Systems
Funder
EU, Horizon 2020, 776577-2
Available from: 2022-11-17 Created: 2022-11-17 Last updated: 2022-12-06Bibliographically approved

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Roci, MalvinaRashid, Amir

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