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6 Ways to Supercharge the Circular Economy with Digital Technologies

Shriram Ramanathan, Ph.D., Research Director
May 19, 2020

We recently noted that consumers, investors, and employees alike are now driving companies to become serious about environmental and social impact. Companies can be successful in their sustainability journey by establishing some measurable goals around reducing emissions, minimizing waste, and/or using fewer resources, as well as adopting the right strategies, which includes improving operations, helping customers, and even finding new business targets. To achieve these goals and implement these strategies, manufacturing companies are largely playing to their core strength – manufacturing – meaning they are largely testing new sustainable raw materials, recycling waste, or even alternative manufacturing processes. However, a missing ingredient in this approach is digital transformation, which, at a minimum, has the power to accelerate adoption of these circular technologies. In the extreme case, the full potential and economic value of these circular technologies may not be unleashed without the use of digital technologies. Finally, there are completely new opportunities for circularity that can emerge by adopting digital tools. In this blog, we discuss how emerging digital technologies can enable the circular economy in six different ways:

Overcoming logistical roadblocks around raw material collection for recycling

In today's global economy, production and consumption are spread across the world. Over the years, supply chains have evolved to be very rigid and one-directional; they can transport raw materials from a few points of origin to a few points of production and, from there on, to consumers all over the world. Unfortunately, this also means that the same supply chains pose a significant challenge when it comes to collecting a key raw material to enable the circular economy – waste.

Last-mile delivery technologies can help overcome some of these challenges. While they were originally developed to aid with delivery of packages to their final destination, many companies have already reconfigured these technologies to tackle other use cases, indicating that using them to collect waste may not be a stretch. While last-mile delivery technologies operate within the boundaries of existing supply chain networks, newer technologies promise to operate outside these boundaries. Several key drivers are now pushing companies to adopt decentralized production-related technologies like factory in a box (FIAB) (see "Alternative Manufacturing Methods: Flipping Paradigms to Reach New Goals"). While still in early stages, the technology promises to overcome the supply chain challenges related to the circular economy.

Sorting high-quality feedstock and tracking the quality of recycled products

One of the key challenges in establishing a circular economy is the varying regulations in different geographies around mixing waste and recycling. This makes it challenging to sort the waste and ensure that both raw materials and finished products meet quality standards.

New innovations like hyperspectral and multispectral imaging, a technique that can capture electromagnetic spectra beyond the visual limit, can assist with quality control on waste feedstocks. Companies like RxAll are also using these imaging techniques as a means for product tracking and authentication, suggesting that similar techniques could be used in combination with small quantities of tracer molecules in the circular economy. Coupling this with blockchain to track the data in a trustworthy fashion could yield a powerful solution to track the origin and quality of feedstocks as well as recycled products. Robotics can also play an important role in sorting waste, as seen in the case of ZenRobotics, which uses a range of sensors and custom robotic arms to sort metal, wood, stone, and rigid plastics from mixed construction and demolition (C&D) and commercial and industrial (C&I) waste streams.

Separating and recycling mixed-material products

Many products in the marketplace are made of mixed materials consisting of different types of metals, plastic, and wood, which are distributed all over the product. Such mixed material products take the challenge of separating and sorting recycling feedstocks to a whole new level.

Fortunately, as before, hyperspectral and multispectral imaging can help scan to-be-recycled products and identify sections of these products that are high in concentration of a desired type of feedstock material. Following that, next-generation robotic technologies can be used to pick up objects, orient them, and even precision cut them. For example, XYZ Robotics and integrate vision systems and vacuum grippers to pick and orient objects at high rates (~1,000 picks per hour) and with high accuracy (99.9%). Precision cutting robots like those of CNC Robotics and Wolf Robotics can then be used to segment the objects appropriately.

Enhancing the yield and stability of recycling processes

Most traditional chemical processes are designed to operate on raw materials that fall within a narrow specification. The presence of a wide range of materials and chemical constituents can pose a significant challenge to stability and yield in chemical recycling processes.

Chemical recyclers can look to the downstream refining and chemicals industry to overcome challenges related to raw material variability. For example, Penrose, maker of advanced process control software, and Algorithmica Technologies, maker of a production optimization software, use predictive analytics and machine learning to predict feedstock quality and optimize process operating parameters accordingly.

Designing products for recycling

Another key challenge is that many products are not necessarily designed with recycling in mind. Many of the chemical constituents used in a product as well as how different materials are structurally bonded together may pose a huge roadblock to recycling.

Fortunately, digital technologies can be use to redesign products so as to make them more recycling-friendly. For example, cheminformatics can be used to design new chemistries, while materials informatics can be used to replace constituent chemicals in compounds and formulations, all with the goal of meeting requirements for easy recycling. Likewise, generative design can be used to redesign products so as to make it easy to separate multimaterial products without compromising the strength or performance of a product.

Using emerging digital business models to enable recycling (1)

Cost has been and continues to be one of the biggest roadblocks to recycling. As a result, manufacturers are forced to charge customers a premium for recycled products, something that customers are not always willing to pay for.

Now, low-cost digital technologies are allowing companies to build connected products and processes. Manufacturers are now able to collect, transmit, and analyze customer data rapidly and derive insights from them. This is allowing companies to react to customer needs in near real time, thereby allowing them to offer digitally enabled services instead of just products (see "Digital Transformation: 2019 Review and 2020 predictions"). These X-as-a-service (XaaS) business models now offer manufacturers the opportunity to bundle in the additional costs associated with recycling. For example, TerraCycle offers Loop, an online shopping platform with reusable packaging that several brands, such as UPS, Carrefour, and Tesco, are using. However, in addition to providing recyclable packaging, the company also plans to use the platform to gather data on consumer purchasing and consumption habits. Loop may also analyze consumer waste to determine consumer needs; for example, it could analyze the waste composition of used diapers and sell this information to formulation companies, which could then develop customized nutritional programs for those infants. Likewise, companies like Helix are offering whole-exome sequencing (WES) services that now allow consumers to gain access to a marketplace of personal genomics products centered around their exome, for example, juices and smoothies tailored to personal nutritional needs. In both of these examples, the cost of recycling packages and bottles can easily be bundled into the premium charged by these platforms for the personalized services they offer.

To summarize, digital technologies promise to help overcome many of the factors that are still holding back the circular economy. Few of these digital solutions are available as plug-and-play solutions for the circular economy so far. Nevertheless, many of the underlying building blocks are mature and available from a number of different vendors. While clients will likely have to make the effort to assemble these building blocks into a seamless solution, it may be worth it considering the benefits and early-mover advantage they are likely to enjoy. We strongly recommend that companies start exploring the use of these digital tools to achieve their sustainability goals. To learn more, please be sure to reach out to us.





- Whitepaper: Making Sense of "Sustainability" (Free Download)

- Infographic: The Future of Plastic Recycling (Free Download)

- Executive Summary: Bio-based Intermediate Chemical Update (Free Download)

- Executive Summary: The Digital Transformation of Supply Chain Management

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