How a Refractory Leader Tripled its Recycling Rate
A global supplier of refractory products wanted to scale battery recycling and make circularity pay. In one year we used the Circular Economy Navigator to pick the right business model, test it with customers and build a roadmap. The work led to a joint venture that tripled the company’s recycling rate and cut waste costs.
The Challenge
A leading global supplier of refractory products, systems, and services, with operations in dozens of production sites and a workforce exceeding 15,000 employees, identified a strategic opportunity in enhancing the sustainability of its operations. Despite having initiated a recycling pilot plant, the company faced challenges in determining the economic viability, market potential, and appropriate business model for scaling its recycling initiatives.
Our Approach
Collaborating closely with the company's strategy and sales teams, we employed the Circular Economy Navigator methodology to systematically explore and validate potential business models. Our approach included:
- Market Analysis:
Assessed market dynamics, customer segments, and pricing strategies to determine the most viable business models.
- Workshops:
Conducted ideation sessions with the sales force and key partners to identify attractive business models.
- Business Model Detailing:
Developed an overarching business model concept based on key service components and individual value propositions that aimed at increasing the generated value through additional services for the multitude of newly involved stakeholders.
- Validation:
Engaged in customer interviews and planned further implementation for the key services across key markets.
Impact
The collaborative effort resulted in a clear roadmap for implementing a circular business model, highlighting financial feasibility and strategic steps for execution. The company successfully established a joint venture, expanding its recycling operations across multiple countries, with plans to extend to further. Notably, the initiative led to a tripling of their global recycling rate, generating large savings. In addition, the joint venture was able to increase the effectiveness of the recycling to 98% by opening new areas of application.
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Key Learnings & Next Steps
- Integrated Approach:
Combining sales and recycling operations under a unified service model enhanced customer value and operational efficiency.
- Market Focus:
Targeting specific and individual customer needs in the different markets with tailored strategies ensured a more attractive value proposition.
- Innovation in Service Delivery:
Enhancing their existing 'As-a-Service' model with a focus on circularity and the additional benefits allowed the company to offer comprehensive solutions, including maintenance and recycling, thereby strengthening customer relationships and creating new revenue streams.
- Internal alignment is Key:
Due to the history within the company, achieving a mindset shift across the departments through a focus on internal communications was one of the most important factors for success.
- Doing to Understand:
Running their own recycling operations allowed the company to learn and understand the key aspects of that model, which in turn was the most important success factor to create a working Joint Venture with a smaller recycling partner.
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Richard Stechow
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