About the lab
Founded in October 2015, the Institute for Integrated Quality Design (IQD) is a new interdisciplinary research institute focusing on research and teaching in the areas of circular and sustainability-oriented innovation. We also look into the role of quality and environmental management systems in supporting such innovation processes.
Featured projects (1)
Featured research (17)
The circular economy and the Internet of Things (IoT) are two major developments reshaping the business environment. Firms may embrace the opportunities provided by the circular economy approach to innovate their business models and offer higher value to their customers and society. In order to address circularity, firms can adopt a range of activities known as circular strategies (maintenance, repair, reuse, remanufacturing, and recycling, among others). However, there are barriers that hinder the operationalisation of circular strategies, such as the lack of knowledge by the producer firm (or service provider) about the condition, location, and status of the product. Producer firms may not know what customers actually do with their products during the use phase, which may prevent the planning and execution of take-back, reuse, or remanufacturing activities. In this sense, digital technologies within the framework of the IoT could enable the operationalisation of circular strategies. Smart products and their amplified capabilities could deliver valuable data to create transparency about their life cycle, facilitating decision-making, and streamlining the extension of their service life. Against this background, the question arises of how firms deploy digital technologies for developing circular strategies. To answer this question, and due to the emergent nature of this field, we conducted a qualitative study of business practices of pioneering firms in the business-to-business (B2B) domain. Qualitative research is well suited to understand new phenomena due to its logic of discovery and openness. We conducted 35 expert interviews at 27 different organisations to gain viewpoints from various industries. We focused on experts from German-speaking countries (mainly from Austria), which were selected considering their experience in either developing IoT-enabled circular strategies or in diffusing their implementation. The results of the study suggest that the implementation of IoT-enabled circular strategies in the B2B market is still at an early stage of development, with pioneering firms driving their respective industries forward. We consider these developments as “embryonic patterns”1. These patterns forecast further developments in the broader industry context in the years to come. Our main insights are as follows: 1. The main driver of the implementation of digital technologies is the need to better understand the use phase and improve customer experience. Firms may use product and customer data to enable smart processes and services during the use phase (what we aggregate under the umbrella concept of “smart use”). These smart processes and services may include remote control, location tracking, or condition monitoring, and aim at improving the experience of the customer. Firms may create added value for their customers by extending their service portfolio with smart use services. 2. Companies are increasingly going beyond smart use and are adopting “smart circular strategies”. Smart maintenance and repair activities enable product uptime and an overall extension of the product lifetime; smart reuse, remanufacturing, and recycling enable additional use cycles of products, components, and materials. 3. Firms may also develop “smart cross-strategy capabilities” such as product passports and product life cycle management (PLM) applications. These capabilities enable and support the operationalisation of smart use and smart circular processes. For instance, firms may require a well-designed life cycle management system to manage the flow of product lifetime data between their IT systems and the product. 4. Moreover, firms may use product data and insights gained along the product’s life cycle as feedback for research and development (R&D) to improve future product design. 5. Finally, our results suggest higher servitisation levels among the firms under study. Pioneering firms are going through an intensification of their service offering to enable smart circular strategies and satisfy diverse customer needs. Such higher degrees of servitisation of the firm’s underlying business model allow for easier implementation of smart circularity due to higher proximity to the customer, better access to product data, and easier execution of closed product loops. However, not all service business models are the same. In comparison with business models based on product sales, the extended scope of rental, leasing, or sharing contracts enable an easier implementation of smart circularity.
Service business models such as rental, leasing, and performance contracting can contribute to a circular economy by keeping products, components, and materials longer in use and thereby preserving their value over time. These business models are, however, subject to higher complexity and information demand. Smart products and the Internet of Things facilitate the optimisation of such closed-loop value creation processes. We present an in-depth case study of a textile rental firm, in the business-to-business domain, that has recently become a front-runner in using textiles equipped with RFID chips. The firm has used smart textiles to improve the transparency of the product life cycle, raise awareness on textile losses, and improve procurement decisions. We show that combining smart textiles with a rental business model could accelerate the transition towards circularity and sustainability.
As a conceptual extension of the established life cycle approach, the objectives of the CE are aimed at keeping products, components and materials in cycles of usage that are stable, closed and as permanent as possible. In this way their quality is maintained or even improved. Therefore, the CE does not represent a “recycling economy” in the narrow sense. The resulting system perspective requires a stronger focus on life-cycle services including maintenance, repair, remanufacturing and high-quality recycling. The basic logic of the CE thus promises the replacement of resource-depleting, energy-intensive and environmentally harmful production of new goods/materials with more service-intensive and regionalized value creation aimed at circulating existing products/materials. At the same time, this also ensures the stable availability of critical raw materials. Six steps to a circular economy: The experiences from the qualityaustria Institute for Integrated Quality Design (IQD) show that six central approaches are required for the successful implementation of a circular economy: 1. Create holistic quality via circular strategies 2. Adapt product designs 3. Make use of new product and process certifications 4. Develop circular service operations through vertical integration and partnerships 5. Transform business models for higher levels of service 6. Harness digitalization as an enabler for intelligent cycling
The circular economy (CE) aims at cycling products and materials in closed technical and biological loops. Cradle to cradle (C2C) operationalizes the CE with a product design concept rooted in the circulation of “healthy” materials because contamination of materials with substances of concern hampers cycling and may pose risks to people in contact with them. Extant research shows that barriers often hinder organizations from successfully pursuing cradle-to-cradle product innovation (CPI). Innovation community theory helps to explain how to overcome barriers and further the innovation process by taking a microlevel perspective on intra- and interorganizational collaboration of individual promotors (or champions). We elaborate innovation community theory with a longitudinal embedded case study of a C2C frontrunner company with the goal to get a precise understanding of how promotors collaborate in the CPI process. Our contribution is threefold:We identify eight collaboration mechanisms used between promotors to sequentially overcome a hub firm’s individual, organizational, value chain, and institutional level barriers to circularity. Second,wedifferentiate these mechanisms according to their cooperative and coordinative facets and put emphasis on the coordinative functions of those mechanisms linked to the C2C standard. Third, we highlight the importance of promotors at the linking level who facilitate the CPI process as intermediaries.
The Circular Economy (CE) represents a disruption of today’s linear ‘take-make-waste economic’ paradigm. It is not an end-of-pipe approach to tackling ‘waste’. Turning the dominant linear structures into value cycles requires a rethinking by all involved actors. It starts with circular product redesign and demands a consistent realignment of all subsequent business processes of value creation, delivery, and return. Overall objectives, mission of the working group The aim of this report was to develop a scientifically based practical manual for the successful implementation of business practices for advancing a Circular Economy. Taking a system perspective, the task of the related Circular Economy Initiative Deutschland (CEID) working group on ‘Circular Business Models’ (CBMs) was: a) to identify and describe actor-specific circular business models (CBMs) and their interactions in business ecosystems b) to provide an integrated presentation of existing barriers to CBMs c) to identify digital and regulatory enablers of CBMs d) to derive specific recommendations for action addressed to decision makers in the areas of politics, business and science in order to accelerate system transition towards a Circular Economy. Key findings and positions of the working group on Circular business models - Business models are a key lever for companies to embrace the Circular Economy. Ideally, a business model aligns circular value creation activities with opportunities to capture economic value. Greater adoption of CBMs in business practice by pioneers and followers is crucial to triggering the desired transformation process of industries and society towards a Circular Economy and generating a self-reinforcing momentum. - The isolated optimisation and profit-maximisation of individual actors’ business models no longer satisfies the demands of a Circular Economy. Effectively transforming existing value chains into value cycles requires a holistic view and the designing of circular ecosystems consisting of complementary value-generating actors. The CBMs of actors within the value cycle have to be aligned, with one of the actors taking the role of a centralised orchestrator, so that the combined value creation activities can indeed reach circularity at the system level. This requires all actors in the value cycle to not only share a vision of circularity, but also to distribute profits in a way that ensures the long-term commitment of contributing actors. Digital technologies will play a crucial role in moving towards and further reinforcing value cycles. - To reduce the complexity of CBMs and make them applicable in business practice, the working group proposes a typology of 22 CBM patterns covering both business-to-business and business-to-consumer markets. The patterns provide practitioners with a comprehensive overview regarding their respective focus, circular potential, and product design needs (see the ‘Business model patterns overview’ figure below). The patterns can be combined by a single actor to build a more comprehensive business model and interlinked across actors in the value cycle to build business model ecosystems.
- Institute for Integrated Quality Design (IQD)
About Erik G. Hansen
- Erik is Full Professor and Head of the Institute for Integrated Quality Design at Johannes Kepler University Linz (JKU), Austria and Visiting Researcher at the Centre for Sustainability Management (CSM), Faculty of Sustainability Sciences, Leuphana University of Lüneburg, Germany. As an interdisciplinary management scholar, his research has focused on circular and sustainability-oriented innovation management on three levels: product, product-service system, and business model.