Comparing Industrial Cluster Cases to Define Upgrade Business Models for a Circular Economy

Abstract

Upgrading is often seen as a means to strengthen customer loyalty between investments in new equipment, but there is more to it. It is a means to introduce innovation in small, but continuous steps keeping both OEMs and their customers at the innovative forefront of technical and business development. Upgrading also improves sustainability and it is a driver in the development of the circular economy. Basically upgrading means transformation of a used piece of capital-intensive equipment to meet the new conditions in the user's business environment, but in practice it can take on a variety of forms depending on what type of added value is provided to the customer. In this article, we define four generic types of upgrade business models based on the industrial cluster cases in the UIW-project. Using a modified business canvas approach, we define the four Upgrade business models and compare how they create value for the customers, how they organise their main activities and how they earn money. A central means of achieving profitable upgrade business is to develop efficient business processes through digitalisation and through the use of modern information technology. Here we identify four areas where technologies such as AR and VR help to create an efficient environment for information management and communication in the upgrade value network.

Assessing relations between Circular Economy and Industry 4.0: a systematic literature review

“…Wang, Zhang, and Zuo 2016) x (J. Xu 2009) x (Zallio and Berry 2017) x T o t a l 7 4 3 3 2 2 1 Thomas, and Trentesaux 2013) x (Deschamps et al 2018) x (He, Xu, and Xu 2010) x (Karastoyanov and Karastanev 2018) x (Kuik, Kaihara, and Fujii 2016) x x x x (Panarotto, Wall, and Larsson 2017) x (Rönnlund et al 2016) x (Schäfers and Walther 2017) x (Schroeder et al 2016b) x (Schroeder et al 2016a) x (Siddiqi et al 2017) x (Simons 2017) x (Sun and Wang 2011) x (Trentesaux and Giret 2015) x x (Turner et al 2016) x (van van Schaik and Reuter 2016) x (van Schalkwyk et al 2018) x (X. V. x x (Zhao, Dang, and Zhang 2011) x Total 6 6 5 4 2 2 1…”

“…Simulation was the prevalent technique, followed by AM, BDA, and the IoT. From one perspective, simulation (in the form of blockchain) was exploited for (i) auditing cooperative CE networks (Alexandris et al 2018), (ii) assessing the impact of business model changes (Simons 2017), for example, through agent-based or multi-method approaches , and (iii) assessing redistributed manufacturing or service-based design (Panarotto, Wall, and Larsson 2017) (French, Benakis, and Marin-Reyes 2017) x (Ge and Jackson 2014) x (Karastoyanov and Karastanev 2018) x (Kuik, Kaihara, and Fujii 2016) x (Lahrour and Brissaud 2018) x (Le, Paris, and Mandil 2017a) x (Le, Paris, and Mandil 2017b) x (Leino, Pekkarinen, and Soukka 2016) x (Liu et al 2016) x (Ruggeri et al 2017) x (Shanshan Yang et al 2018) x (Siddiqi et al 2017) x (Stark et al 2014) x (Tolio et al 2017) x (X. V. x (B. Xu 2016)…”

“…x (Gorissen, Vrancken, and Manshoven 2016) x (Jin et al 2014) x (Kölsch et al 2017) x (A. Q. Li and Found 2017) x x x (Mattos Nascimento et al 2018) x (Millard et al 2018) x x x (Panarotto, Wall, and Larsson 2017) x (Pistol, Bucea-Manea-Tonis, and Bucea-Manea-Tonis 2017) x (Prendeville et al 2016) x (Simons 2017) x (Soroka et al 2017) x (Ünal, Urbinati, and Chiaroni 2018) x Total 6 3 2 2 11 (Ashjaei and Bengtsson 2017) x (Baines 2015) x (Borangiu, Thomas, and Trentesaux 2013) x (Caggiano 2018) x (Franquesa and Navarro 2018) x (Franquesa, Navarro, and Bustamante 2016) x (Herterich, Uebernickel, and Brenner 2015a) x (Herterich, Uebernickel, and Brenner 2015b) x (Herterich et al 2015) x (Jardim-Goncalves, Romero, and Grilo 2017) x (Kowalkowski et al 2017) x (Lee, Bagheri, and Kao 2015) x (Lindström et al 2018) x (Spring and Araujo 2017) x (Verdugo Cedeño et al 2017) x (Yu, Xu, and Lu 2015) x Total 7 3 3 2 2 Millard et al 2018). BDA can be useful for assessing innovative business models through integrative frameworks (Chiappetta Jabbour et al 2017) or for particular types of companies (Soroka et al 2017).…”

Sustainable business model archetypes for the electric vehicle battery second use industry: Towards a conceptual framework

“…Theory development on sustainable business models including a circular economy approach is expanding (Lacy & Rutqvist, 2015;Simons, 2017). Scholars utilize different definitions of circular economy that may consider the material dimensions, or economic aspects; but for the purposes of this paper, the Ellen McArthur Foundation (EMF) definition is used: 'A Circular Economy is an economic and industrial system where material loops are closed and slowed and value creation is aimed for at every chain in the system' (EMF, 2013), a system which 'aims to redefine growth, focusing on positive society-wide benefits' (EMF, 2019).…”