Circular economy proposes twelve strategies that organizations and territories can select and adapt according to their context and the type of resources they use. One of the objectives is to optimize the use of resources. Therefore it’s necessary to ensure that operations are fully functional.
In addition, since the financial benefits of optimizing operations are very real, this strategy is a good lever for change and for integrating environmental issues within companies.
All along the value chain, from the extraction of raw materials to the distribution of products, companies’ operations are based on the consumption of natural resources (water, energy, metals, etc.). Motivated by reduced procurement costs, environmental initiatives and the use of good management practices (e.g., ISO 14001, Lean), many companies have already begun to reduce their consumption of resources.
The shift to a circular economy can help accelerate this movement. Companies will be able, for example, to more effectively target priority resources to be saved (supply risk, scarcity, etc.) and find outlets for waste or by-products more easily.
A concrete example of circular economy
In order to diversify its activities and optimize its operations, Quebec’s largest potato producer, Patates Dolbec, has found a new outlet for its processing waste and vegetables that are too misshapen to be sold in supermarkets. It’s making vodka at its own facility in Saint-Ubalde, in the Portneuf region, and it will go on sale at the SAQ in the spring. In addition, the spent grain resulting from the production of alcohol will be used to seed the fields.
The Fourth Industrial Revolution
Industry 4.0, an interesting vector within the circular economy, is characterized by the intelligent automation and integration of new technologies in the value chain of a company, in particular:
- Information management systems that allow better resource consumption management, loss identification and efficient planning of distribution logistics.
- Additive manufacturing, which, through the new technologies that it brings together – notably 3D printing – could, according to some studies, reduce material consumption in the metals sector by up to 70%.
The Ministère de l’Économie et de l’Innovation describes three main challenges for companies in the transition to Industry 4.0:
Challenge 1: New skill requirements
In order to make a successful transition to Industry 4.0, the manufacturing company must examine the new skills required and its needs for qualified staff.
Among the most sought-after skills:
- Data management
- Data security
- Human-machine interaction
- User interface design
- Software development
- Data science
The major challenge facing the company is to train employees and recruit new talent. It must find the most appropriate approach to reconfigure its value chain and preserve or even maximize its competitive advantages.
German companies have decided to focus on continuous training of their employees to ensure that they qualify for Industry 4.0.
Training resources in-house is a much more accessible approach to begin the transition to Industry 4.0. However, this is not enough to successfully implement the plant of the future.
Studies conducted in Germany and the United States have shown that the vast majority of industrial employees lack the skills required for Industry 4.0. Quebec is facing the same finding.
Challenge 2: Data security
Data security is a concern for all companies that have decided to switch to Industry 4.0.
The proliferation of data and systems in the company highlights the importance of computer security. When technologies were connected to the internal network and centralized in the same building, securing everything was easier. The introduction of a multitude of connected objects, often off-site and accessible via the Internet, now demands cybersecurity management.
It is therefore essential to include cybersecurity elements as part of the company’s IT infrastructure implementation.
Challenge 3: Investment needs
Manufacturing SMEs must make significant investments, ranging from 7% to 9% of their sales, to implement new digital technologies. Thus, moving to Industry 4.0 with a digital plan is a must for SMEs that want to make better investment decisions for the acquisition and integration of new technologies.
The digital plan must be embedded in the organization’s strategic planning. Its objectives will be to optimize current tools, to draw up a plan for acquiring future technologies and to ensure their cohesion and integration, all while taking the business model into consideration.
Text adaptes from Québec Circulaire