DigiTech4CE - Digital key technologies for circular production

Status

Completed (01/2021 - 07/2022)

Starting point, contents and results

Circular economy aims to use as few natural resources as possible for the production of products, to keep products and materials in circulation as long as possible and in a meaningful way, to avoid waste and pollution and to protect the natural ecosystem. It is a holistic form of value creation achieved by extending product life - through, for example, sharing, reusing, repairing or recycling - and by moving "waste" from the end of the value chain to the beginning. Digitalisation a significant driver, if not a key success factor, as digital technologies close information gaps, identify opportunities for improvement in process, product, and component design and enable the implementation of innovative business models.

The study DigiTech4CE was commissioned as an R&D service "Digital key technologies for circular production" within the national FTI initiative Circular Economy. The aim is to analyse digital key technologies for industrial cycles in production, to present action fields and to provide recommendations for a circular production in Austria.

The study addresses questions such as: Who are the new participants in the circular economy? What is the value for producers and what are the competitive disadvantages of a circular-based production? What regulatory framework adjustments can be expected? And what role does digitalization play in this transformation, what are the key technologies and how is the innovation demand to be met?

Participants in a circular economy are diverse. In addition to traditional roles such as material or machine supplier, producer and user, new actors such as service providers, repair services, prosumers or recovery managers are becoming increasingly important. Characteristic of circular value creation is that the participants and their business model optimisations cannot be considered in isolation. Value chains need to be transformed into value cycles. This creates circular ecosystems where the roles of the value chain participants complement each other, making a holistic view of the circular economy essential.

The perceived added value for producers ranges from an economic benefit through resource savings and the development of new markets through new service models, to increased resilience through the reduction of dependence on primary raw materials and associated supply chain issues, to the strengthening of innovation power, which in turn leads to higher attractiveness as an employer and better customer loyalty. For Austrian production companies, the greatest added value is in contribution to sustainability, followed by resource efficiency and the perceived competitive advantage through differentiation.

Competitive disadvantages that make the implementation of circular business models more difficult include high investment costs in infrastructure, personnel and prerequisites, possible cannibalisation effects from own low-priced recycled products, and rapid price decline due to accelerated innovation cycles. Furthermore, a lack of awareness among companies of what circular economy means in detail, which strategies to develop and what importance must be given to product design, can be hindering. Additionally, the lack of transparency in the supply chain, the building of mutual trust and the development of a common understanding of values are also challenging.

Uniform regulatory framework conditions for both circular economy and data cycles are often inadequate, but would provide a great reference for the participating actors. There is a need for quality standards for products and processes, interoperable data standards, regulation on data protection, data security and open data.

Digitalisation is a key tool for circular economy, as ideally not only material flows are cycled, but also information flows. Digital technologies form a link between the participants in a circular economy, enable the exchange of data and support transparency and collaboration. Furthermore, they support new business models and product and process innovations, improve understanding of usage and customers, and enable the development of new work practices. Digitalisation enables, for example, control and location tracking services, tracking of usage cycles and performance data, or predictive maintenance, forecasting of failures, and optimised spare part management.

In a technology catalogue, 15 digital key technologies are described and classified through technology profiles. These include Industrial IoT, Machine Learning, Distributed Ledger Technology or Cyber Security. They are assigned information categories, actors and R-strategies, obstacles and action fields are highlighted, and examples of applications from various industries are listed. The transformation to a circular economy is associated with high innovation needs and increasing importance of research and development in finding new ways for sustainable products and circular value creation. Innovation is the central lever for sustainability; cooperation, design and digitalisation are the most important ingredients.

Therefore, in addition to rethinking value creation, accelerating implementation and creating digital prerequisites, reorienting innovation is one of the priority action fields. This results in recommendations for the public sector: creating awareness, reducing uncertainty through appropriate framework conditions, and driving digitalisation and innovation. Targeted, supportive measures within national R&D programs can help establish circular production in Austria.

The government are responsible for formulating consistent target scenarios, binding guidelines and attractive incentive systems for both the digital and the ecological transformation of the economy in the coming years. The DigiTech4CE study can be a basis for further strategic measures by the public sector.

DigiTech4CE was carried out by BRIMATECH Services in cooperation with Linz Center of Mechatronics.

Project management

• Johanna Berndorfer

Institute/Company

• BRIMATECH Services GmbH

Partners of the project consortium

• Linz Center of Mechatronics GmbH

Lothringerstr. 14/3, 1030 Vienna
+43 664 9689424
jb@brimatech.at
www.brimatech.at