Capgemini-删除终点线-循环经济将如何重振汽车行业（英）-2023.2-25正式版

REMOVINGTHEFINISH

LINE

HowtheCircularEconomywillenergizetheautomotiveindustry

TableofContents

1 ExecutiveSummary 3

2 Introduction 4

3 Thecirculareconomyvaluechainforautomakers 6

3.1 Thepre-usephase 8

3.2 Theusephase 10

3.3 Thepost-usephase 10

4 Sixpillarsforacirculareconomy 11

4.1 Circularstrategyandperformance 12

4.2 Designforcircularity 14

4.3 Circularsupplychain&manufacturing(upstream&downstream) 16

4.4 Service-drivenbusinessmodels 17

4.5 Dataplatforms&datamanagement 18

4.6 Partnershipecosystemsforcircularity 21

5 Conclusion 23

©2023CapgeminiInvent 2

1.Executivesummary

Formorethan125years,theAutomotiveindustryhasbeenoneoftheenginesofthemodernindustrialera.Manyofthecentralfeaturesofmanufacturinghavegrownoutofautomotive:theassemblyline,leanmanufacturing,andtoomanytrendstolistinrobotics,automation,andsafety.

Ontheflipside,MobilityandTransportisoneoffour1globalsystemsthatcausethelion’sshareofgreenhousegasemissionsandvirginmaterialextraction.Whiletheglobalpopulationhasdoubledinthepast50years,materialextractionhastripled,leadingto100billiontonsofmaterialconsumedbytoday’sglobaleconomy.Surprisingly,only7.2%ofthatfigureiscircular.

Evenmorealarming,theshareofcircularmaterialhasfallenfrom9.1%in2018.2Butjustas100yearsago,theautomotiveindustryonceagainhastheopportunitytodefinethevaluecreationmodelofourtimes.Thelinearmodelofmanufacturinghasrunitscourse.Now,withanewemphasisonsustainabilityandvalue,the21stcenturywillbelongtothecirculareconomy.

AccordingtotheEuropeanCommission,thecirculareconomyreferstoaneconomicmodelthataimstomaintainthevalueofproducts,materials,andresourcesforaslongaspossiblebyreinsertingthemintotheproductcycleattheendoftheirusewhileminimizing

thegenerationofwaste.Whenappliedtotheautomotiveindustry,circularityaffectsmanufacturingalongtheentiretyofthevehiclelifecycle.Thispaperconsidersthethreephasesofpre-use,use,andpost-useinturn,demonstratingthatcirculareconomicprinciplesaddandpreservemorevaluethantraditionalmanufacturingmodels.Circularityrequiresbroadchangesthroughoutanorganization,whichmustbecarriedoutthroughnewpartnershipmodelswithinandacrossindustries.Thisoverarchingapproach–detailedinourcircularityframework–enablesOEMstodeliverresultsatspeedandscale,notonlytodecoupleeconomicsuccessfrommaterialextractionbutalsowiththeunderstandingthat70%ofgreenhousegasemissionsaretiedtomaterialhandlinganduse.3

Thispaperbeginsbypresentingalistoftectonicchangesthatpushatthefoundationoftheautomotiveindustry.Thisincludesthedemandsofnewregulationsandanewgenerationofconsumers,forwhomsustainabilityisanincreasinglydominantpurchasingcriterion.Thegrowingtrendtowardselectricvehiclesprovidesanotherdrivingforcethroughtheincreasingdemandsitputsonarangeofmaterials,manyofwhichareminedinjustafewcountries.Theseforcespushinonedirection–towards

amanufacturingmodelthatwasteslessandpreservesmaximumvalue.

Ourcircularityframeworkpresentssixcirculareconomypillarsthatcanleadautomotivecompaniesthroughthechallengesofafast-changingindustry,maximizingvaluethroughoutproductandservicelifecycleswhilereducingwastetoabareminimum.ThisenablesOEMstocreatelong-termvaluewithactionsthatcanbedeployedandmonitoredintheshortterm,leveragingthisalternativemodelthatbringsconsumerdesirability,resiliency,andcompetitiveness.Thistransformationwillalsoincludenewsourcesofrevenuespurredonbytheevolutionoftransportation,awayfromaone-person-one-

carmodel,towardsincreasinglyinnovativesharedmobilityoptions.Eachpartofanorganizationwillhaveaparttoplay,withpartnershipsplayinganincreasingrole.

Whatconsumersvaluemostischanging.Oneschoolofthoughtwouldaimtochillnewtrendsandpreservethe20thcenturymodelforaslongaspossible.Thispapertakesabolderapproach.Ashiftinvalueprovidesatremendousopportunityforthebusinessesthatadaptfirst.Inaworldofincreasingemissionsanddwindlingresources,pushedbyincreasingregulation,andpulledbyconsumerpreference,the21stcenturyisgravitatingtowardsthecirculareconomy.Forautomotiveleaderswithvision,thisisthetimetolead.

CircleEconomy.(2023).Thecircularitygapreport2023(p.28).RetrievedfromCGRiwebsite

CircleEconomy.(2018).Thecircularitygapreport2018(p.20).RetrievedfromCGRiwebsite

CircleEconomy.(2021).Thecircularitygapreport2021(p.14).RetrievedfromCGRiwebsite

©2023CapgeminiInvent 3

2.Introduction

Thebattleagainstclimatechangehasmovedintotheactionphase,asorganizationsaroundtheworldcoordinateastrategicresponse.Thetransportsectorhasbeenunderthespotlightasahigh-emissionindustry(~9%ofGHGemissions

–correspondingtoacarbonfootprintof4.8GtCO2e).1Increasingpressuresfromregulatorsandconsumersaredrivingamassivetransformationtowardcollectiveenvironmentaltargets.Toachievelessthan1.5°Cofglobalwarming,theautomotiveindustrywillneedtohalveitscarbonemissionsby2030.Thisgoalismadeallthemorechallenginginlightofthetransformationtowardelectricmobility.Differentcoststructures

(thebatteryrepresents30%ofanEV’svalue)andtheincreasedneedforscarcematerialsareputtingincreasedpressureonanalreadystrainedindustry.

Ultimately,theindustryisundergoingitsmostprofoundchangeinourlifetime,representedbysixmegashifts:platformization/standardization,softwarization/connectivity,autonomousdriving,mobilityandservitization,thetrendtousedcarsorretrofitting,andelectrification.Thesearefurthercompoundedbyanenergycrisis,disruptedsupplychains,andaloomingrecession.

Fortoolonghavewebeenchasingshort-termgrowthwithafocusonoptimizinglinearvaluechains,

amodelcharacterizedbylargevolumesofsingleunitsales,globalizedvaluechains,productobsolescence,andin-houseR&Ddrivenbyproductioncost.Theglobaleconomy'scircularityhasstagnatedat8.6%meaningmorethan90%of100billiontonsoftherawmaterialsconsumedeachyeararenevercycledbackintothe

economy.Whilewehavealongwaytogo,therecentsuccessionofcrises,suchassanitaryandenergycrises,supplychaindisruptions(e.g.,SuezCanalblockage,semiconductorsshortage),andthewarinUkraineconfirmthatcompaniesneedtoacceleratetheirtransition.

Forallthesereasons,leadersintheautomotiveindustryhavebeguntoexplorethebenefitsofacirculareconomyrevolution.

AccordingtotheCapgeminiResearchInstitute,while73%ofexecutivesagreethatacontributiontothecirculareconomyisnecessarytoachievelong-termfinancialandcompetitivegoals,only53%attesttohavingacircular-economystrategyandonly41%oforganizationshaveintegratedcircularitymetricsintodecisions.2

LevelofintegrationofCircularEconomyintheautomotive’ssustainabilityroadmap

53% 45% 41%

Adoptedacircularstrategy Adheretocircularityprinciple Factorcircularitymetricsinto

primarilyinengineering, businessdecisions

manufacturingandsupplychain

Source:CapgeminiResearchInstitute,SustainabilityinAutomotiveExecutiveSurvey,July-August2022.N=1,080executives.

Stephan,B.etal(2019)CrashingtheClimate

2CapgeminiResearchInstitute(2022)SustainabilityinAutomotive ©2023CapgeminiInvent 4

Multipleforcesandoneconclusion

Interestincircularityisgrowing,andit’sbeginningtotranslateintoaction.Asmoreandmoreforcesalign,thistrendcanbeexpectedtoaccelerateinthecomingyears.

Weidentifiedseveralforcesdrivingtheadoptionofcirculareconomy:

Growingintolerancetoanypollutiontype,

Lackorabsenceofwasterecovery,

Scarcityordifficultyinsourcingrawmaterials(mainlyduetoelectrification),

CO2emissionsrelatingtothebusinessactivityingeneral.

Whilethefirsttwohavecrystalizedmostoftheinitialandongoingeffortsandregulationsforseveralyears(targetedrecycling,plasticsmanagement,managementofunsolditems),thecurrentandforthcomingconditionsgiveconsiderableprominencetothelasttwo.Dependingontheirlevelofexposuretothesethreats,companieshaveaheterogeneouslevelofadoptionandimplementation.Forinstance,vehicleelectrificationisattheheartofthetransformationwiththelegislationframeworkthathasbeenincreasinglyintensified(e.g.,latestlegislationinEuropebansthesaleof

anycombustionenginevehicleby2035).

Mobilityplayerspushedtoadoptthecirculareconomyhavebeenimplementingnewbusinessmodelsthatgofarbeyondrecycling(e.g.,Product-as-a-Service,ProductLifeExtension,SharingPlatforms,SellandBuy-back,RepairandMaintenanceservices,Second-handPlatforms),representingnewplayfieldsthatdeliverproveneconomicvalueandconsumerdesirability(e.g.,clients’acquisitionandloyalty,turnoverincrease,brandimageimprovement).Asaresult,newindustryplayersarepulledbythesebenefitsandthereforeeitherlaunchinitiativesormakecircularityoneoftheirstrategicpillars.

Keyquestions

Althoughcircularityisnotanewconceptintheautomotiveindustry,theincreasingexposuretotheabovementionedpushedandpulledfactorsmakecirculareconomyaninevitableparadigmshiftforautomakers.Largepoolsofvalueremainuntappedbetweenend-of-useandrecyclingwhichequatestocountlessopportunitiesintheformofreusing,repairing,andremanufacturingvehiclesandtheircomponentsthatarewidelyunexplored.Therefore,theultimateobjectiveforautomotiveplayersistoleveragethecirculareconomyandthussignificantlyreducetheirrawmaterialfootprint,whichisofprimaryimportancewhenproducing

vehiclesatscaleinaworldoflimitedresources.

Basedonthisshift,weaddresssomeofthekeyquestionsforOEMsandotherautomotiveplayersontheirpathtocircularity:

Whatisneededtoadaptcurrentlinearstructurestoafullycircularbusinessmodelacrossstructures,processes,andbusinessdomains?

HowdoesembracingthecirculareconomyhelpOEMssustainandevengrowtheirbusinesseswhilereducingtheirenvironmentalfootprint?

HowwellareOEMsequippedforthetransitiontocircularbusinessmodelsandactivities,andwhatdotheyneedtodoinordertoaccelerateandpioneerintheinevitablechange?

Thispaperaimstoexploretheopportunityofcirculareconomyfortheautomotiveindustrytoaccelerateitssustainabilitytransformation.ThroughCapgemini’s6-pillarframework,businessleaderscanembarkonthisjourneybylayingthefoundationforcircularitywithaholisticapproach–embeddingbusinessmodels,productdesign,operations,andpartnershipecosysteminordertoembracethesixmegashiftsthataredisruptingtheentiresectortoanunprecedentedextent.

©2023©2022CapgeminiCapgeminiInventInvent 55

3.Thecirculareconomyvaluechainforautomakers

Thelinearmodelisasales-orientedbusinessmodel,wherevalue

ismainlycreatedduringtheproductionprocess,andthenconsumedduringthevalue

optimizationphase.Oncequalityandutilizationlevelsarenolongeroptimal,productvaluecontinuestodeclineuntilitbecomesnon-functional,andtheproductis

disposed.Reinforcedbythedriveforeconomicgrowth,thisleadsto

anincreasingdestructionoflimitedresourceswhilepollutingland,water,andair,destabilizingtheclimate.

Lineareconomy

User

ADD DESTROY

VALUE VALUE

Retail

Assembly

Manufacturing

Extraction

PRE-USE USE POST-USE

Source:CircleEconomy,2016

Thecirculareconomyincorporatesvaluerecoverymechanismstoensurethatthevalueofproductsandmaterialsismaintainedaftertheiruse.Valuerecoveryactivitiesincluderesale/second-handsale,repair,refurbishing,remanufacturing,andrecycling.Thus,movingtoamorecirculareconomyaimstoincreaseresourceefficiencyandreduceprimaryresourceinputsbydesign,maintainproductsandmaterialsattheirhighestpossiblevalueforaslongaspossible,andeliminatewasteattheendoflife.InthePRE-USEphase,valueisaddednaturallyastheproductsgetassembled,

1. IntheUSEphase,valueisoptimizedbyextendingtheusabilityoffirsthandproducts

(mainlythroughsharingandrepair),

2. InthePOST-USEphase,valueisretainedviarevalorizationprocesses(lifeextension,newlives,end-of-life).

Inprinciple,themodelcanbeappliedinanyindustry.Thefocusinthisworkthoughisthetransformationofthelinearlifecycletothecircularlifecycleintheautomotiveindustry.Itsapplicabilityrequiresaholisticapproachacrossproductdesign,businessmodels,operations,andpartnerships,asnocompanyimplementscirculareconomyinisolation.Duetothenumberofstakeholdersinvolvedwithintheorganizationandacrossallthethirdparties,dataisakey

enablertotheimplementationofcirculareconomystrategiesthroughgreatertraceabilityandtransparency.

©2023CapgeminiInvent 6

Valuehilltargetpicture-circularityandservice-drivenbusinessmodelforautomotive

Use

Pre-usePost-use

Services Reuse/Share Service-driven

Business

Models

Circular

Lifecycle

Strategy

NewSourcing

Strategy

Ensure2ndlife:

provideresidues

toexternalfirms

©2023CapgeminiInvent 7

3.1Thepre-usephase

Inthepre-usephase,valueisadded

•Thereisahighdependencyon

•

Theincreasedlevelof

totheproductbyassemblingthe

veryfewcountries(notably

disruptionshasputglobal

slowlyevolvingproductpieceby

China)thatareresponsible

supplychainsatrisks,makingit

piece.Thisincludesallvalue-adding

fortheextractionand

increasinglydifficulttosource

processesfromproductstrategyand

transformationofcriticalraw

componentsandmaterialsas

designtowardsthedeliveryofthe

materials(suchaslithium,

illustratedduringthe

finalproduct.Duringthisphase,

cobalt,nickel)aswellasthe

semiconductor’scrisis.Beyond

automotiveplayersfacemanyissues

productionofbatteriesand

geopoliticalissues,thehigh

intheirracetowardsustainability,

theircomponents.

concentrationoftheEVmarket

suchas:

onresourcescanleadtosimilar

effectsifglobalproduction

chainsaremaintained.

ChinadominatestheentiredownstreamEVbatterysupplychain

GeographicaldistributionoftheglobalEVbatterysupplychain

Mining Materialprocessing Cellcomponents Batterycells EVs

100%

75%

50%

25%

0%

Li

Ni

Co

Gr

Li

Ni

Co

Gr

CathodeAnode

BatteryEVproduction

production

ChinaEuropeUnitedStatesJapanKoreaDRCAustraliaIndonesiaRussiaOther

Notes:Li=lithium;Ni=nickel;Co=cobalt;Gr=graphite.,DRC=DemocraticRepublicofCongo.Geographicalbreakdownreferstothecountrywheretheproductionoccurs.Miningisbasedonproductiondata.Materialprocessingisbasedonrefiningproductioncapacitydata.Cellcomponentproductionisbasedoncathodeandanodeproductioncapacitydata.Batterycellproductionisbasedonbatterycellproductioncapacitydata.EVproductionisbasedonEVproductiondata.AlthoughIndonesiaproducesaround40%oftotalnickel,littleofthisiscurrentlyusedintheEVbatterysupplychain.ThelargestClass1battery-gradenickelproducersareRussia,CanadaandAutralia.

Sources:IEAanalysisbasedon:EVVolumes;USGeologicalSurvey(2022);BenchmarkMineralIntelligence;BloombergNEF.

©2023CapgeminiInvent 8

ProductioninallstagesoftheEVbatterysupplychainisconcentratedinfewcompanies

Shareoftotalproductionoftop-threecompaniesateachstageoftheEVbatterysupply

Mining Cellcomponents Batterycells EVs

100%

75%

50%

25%

0%

Li Ni CathodeAnode Batteryproduction EVproduction

Notes:Thefigureshowsproductionpercentagesoftop-threecompaniesfor2021:EVproductionbysales,batteryproductionbyMWhproduced;cathodeandanodebyproductioncapacity,miningbyproductioncapacity.Top-threecompaniesbyproduction(countruwhereheadquatered):lithium-SociedadQyunucatNuberaCguke(Chile);PilbaraMinerals(Australia),Allkem(Australia);nickel

JinchuanGroup(China);BHPGroup(Australia);ValeSA(Brazil);cathode-Sumitomo(Japan);TianjinB&MScienceandTechnology(China),ShenenDynanonic(China),anode-NingboShanshan(China),BTRNewEnergyMaterials(China);ShanghaiPutailaiNewEnergyTechnology(China);batteryproduction-CATLK(China),LGEnergySolution(Korea),Panasonic(Japan);EVproduction-Tesla(UnitedStates)VWGroup(Germany):andBYD(China)

Sources:IEAanalysisbasedonBenchmarkMineralIntelligence,BloombergNEF,S&PGlobal.

Vehicledesignprinciplesdon’talwaysincludetherevalorizationrequirementsthroughoutthelifecycle.Thisisoftenduetotheinformationaccessoftheentirevehiclelifecyclemanagement,whichisfragmentedacrossorganizational

functions.Thisisparticularlyrelevantconsideringthatlithiumpricesincreasedmorethanseventimesandcobaltpricesmorethantwobetweenthestartof2021andMay2022.1

Circulareconomyprinciplesduringthepre-usephasedomorethansavemoneyandreducewaste–theysettheballinmotionfortheentiretyofavehicle’slifecycle.

IEA–GlobalSupplyChainsofEVBatteries,2022

©2023CapgeminiInvent 9

3.2Theusephase

Atthestartofusage,thefinished

Thisisespeciallyrelevantgiven

carpassesfromthepre-usephaseto

tworealitiesofthestatusquo:

theuseandvalue-optimization

phase.Thevalue-optimizationphase

•

Overtheentirelifespanof

isthemomentwhereavehicle’s

atraditionalcar(20yearson

valueisatitspeak.Therearetwo

average),theuserateis

objectivesatthisstage:

remarkablylow–onaverage,

just1.5%forprivately

1.Toavoidvaluedepletionby

usedcars.1

leveraginglifeextension

operationswithminimaleffort,

•

Theenergycrisisthatishitting

theglobaleconomyhas

2.Tousetheopportunities

structuralimpactsatalllevelsof

broughtbycircularityto

thevaluechain,andthere’sa

optimizevehicles’userate.The

stronglikelihoodthatthistrend

circularbusinessmodelcallsfor

willcontinue.Accordingtothe

vehiclesthatareofgreatervalue

WorldBank,crudeoilprices

overalongerlifespan.

haveincreasedby350%from

April2020toApril2022.Global

coal,naturalgasandcrudeoil

3.3Thepost-usephase

Inthetraditionallinearlifecycle, don’talwayshaveaccessto

avehicle’svaluedecreasesrapidlyas vehiclesattheendofuse.

oldvehiclesarehandedovertoscrap Therefore,theyneedtodevelop

facilities,includingalltheirpartsand therightcapabilitiestoincrease

components.Firmsfollowingcircular usedvehiclecollection,sorting,

economyprinciplesputalotof diagnosisanddismantlingasan

effortintoretainingthisvalue.The entrypointtoanyrevalorization

objectiveinthisphaseforOEMsand process.Thisisamandatory

theirpartnersistoloopamaximum steptoachievegreaterresource

ofpartsbackintotheproduction sovereigntyandprofitabilityin

processfornewandusedvehicles. thelong-term.

Themostrelevantrevalorization

optiondependsontheactual • Manyrecoveryactivitiesin

conditionsofthevehicleandits automotivehavealreadybeen

residualvalueleadingtomultiple developed,demonstrating

levelsofdisassembly(e.g.,for greateconomicand

refurbishment,remanufacturing, environmentalvalue.However,

repurposing,andrecycling). therehavebeendifficultiesin

However,implementingthesesteps scalingsuchinitiatives.Doingso

inpracticerequiresOEMsto willbeanessentialpartof

overcomeabroadsetofchallenges. extendingthelifespanof

vehicles.Tolookattwo

• Themovetoelectricmobility examples:

isincreasingthevalueofacar

(byaroughaverageof$10,000 1. Remanufacturingvehicle

comparedtoanICEvehicle). componentsforthesame

However,thesecond-hand qualitylevelasoriginalones

markettodayislargely canreducecostby30to50%

outsourced,meaningthatOEMs

Davis,S.C.andBoundy,R.G.(2022)TransportationEnergyDataBook

IEA(2022)RenewableElectricity

KelleyBlueBook(2021)EightStraight

Circular(2022)HowtheCircularEconomyisSolvingtheProblemofSpentBatteries

priceshaveundergoneanadditionalestimatedincreasethisyearof81%,74%,and42%respectively.2Renewableenergycapabilitieshaveaccelerateddramatically(witharecordincreaseof6%in2021)butthatrisedoeslittletocompensateforthesupplyissueforfossilfuels.3

Giventheenergyrequiredtooperatevehiclesofallkinds,itisincumbenttorethinkthewaysinwhichwemovepeopleandgoods.Increasingvehicles’usageandlifespantakeusclosertothatgoal.

Remanufacturingenginesleadstoa73%to87%reductioninCO2emissionscomparedtoconstructingnewonesthroughtraditionalmanufacturingprocesses

Althoughrecyclingratesintheautomotivesectorarealreadyhigh(~80%intheEUandUS),thearrivalofbatteriesischangingtherulesofthegameforvehicleend-of-lifemanagementtosupportcriticalmetalprocurementandsourcing.Assuch,withthesurgeintheamountofbatteriesinthemarket,recyclingcanprovideupto22%ofthemetalsneededtoproducelithium-basedbatteries,thusreducingtheoveralldemandfornickel,lithium,andcobaltforEVsbyupto30%by2050.4

©2023CapgeminiInvent

10

4.Sixpillarsforacirculareconomy

Fromarevenueperspective,howdoesitbenefitOEMstoproducelonger-lastingcarsthatmoredriversuse?Theanswerliesinanotherfundamentalshift.OrganizationsaretransitioningtowardaProduct-as-a-Servicebusinessmodel,wheretheyowntheproductstheymarketandareresponsibleforoptimizingtheirfirstlifeandforidentifyingandfacilitatingtheirnextlives.Technologyisthekeytomakingthisconceptapplicableatscale,namelythroughautomation,processvirtualization,andoptimizedenergyconsumption.

Buildingandimplementingacircularitystrategyforbusinessesentailstheconsiderationofmultiplefactorsthroughouttheproductlifecycle:

Theproductconditions(e.g.,energysupply,component,andmaterial)

Thebusinesscapabilities(e.g.,supplychainanddistribution)

Themarketsituation(e.g.,customerdemandandregulations).

ConsideringthewholeproductlifecycleadditionallyrequiresOEMstothinkintermsofoverarchingsystemsinsteadofstandaloneproducts.Forexample,carmakersmustcollaboratewithtelecommunicationsandenergyproviderstodesignend-to-endcircularvehiclesandservices.

Wehighlightsixcirculareconomypillarsthatcanbringautomotiveorganizationsflexibility,robustness,andscalablesolutionstomeetthechallengesofafast-changing,increasinglysustainability-ledindustryandtransitiontowardscircularproductandserviceslifecycles.

OurCircularityFramework

CircularStrategy

&Performance

Partnership Designfor

EcosystemsCircularity

forCircularity

6PILLARSFOR

CIRCULARITY

DataPlatforms CircularityinSupply

&Management Chain&Manufacturing

Service-driven

BusinessModels

©2023CapgeminiInvent 11

4.1Circularstrategyandperformance

Strategyandperformanceformthefoundationofasuccessfultransitiontocircularproducts,services,processes,andoperations,andarethusthefirstpillar.KeyquestionsforautomotiveOEMsinthiscontextare:

Isthecirculareconomyambitionalignedwiththecorporatestrategy?

Whataretheempiricalchangesthatneedtobeimplementedfromthetoptosecurelong-termbusinessresiliencyonresources?

Howtoensurethatmylong-termvisionistranscendedto,andappliedonadailybasis?

Theincreasingdifficultyinaccessingrawmaterialsintheautomotiveindustry,especiallyinadvancedeconomies,isputtingindustryplayersinaneconomyofscarcity.Nowisthetimetoconsidertheelementsthatmayjeopardizebusinessoperationswithinthenext30yearsandbuildaresilientstrategyagainstthem.Failingtoestablish

aprospectivestrategycouldhavesevereoperationalconsequences.

Sustainableprocurementisfoundationaltobusinessresiliency,requiringustochangethewayweunderstandquality,costs,andavailability.Toalignprocurementwithourplanetaryboundariesandsustainablesupplychainpractices,fourstepsarerequired:

Encouragesourcingamaximumfromrecyclates,bio-based,andalternativematerialsthatarelessenvironmentallyharmfulfrominternalandexternalsources–suchasbioplastics,syntheticleather(SofTex),

AcellaHylite,ornaturalfibers(e.g.,soyfoam,wheatstraw,celluloseorkenaffibers).

Monitorsuppliers’practicesagainstinternationalstandards,especiallyregardingsoils,mines,andsitesregeneration,aswellasfairproductionprocesses.Thisinvolvescomplyingwithhumanrightsaswellasenvironmentallyfriendlyextractionsofrawmaterials.

Encourageproductionascloseaspossibletothesourcingfirms’productionfacilities,whichalsohelpsachievebettertraceability.Thisispossiblethroughpartnershipswithqualifiedsuppliers.

Inthenearfuture,itwillalsobecomeincreasinglyimportanttoimplementsmart,flexible,andforecast-drivensourcingprocesses.AutomotiveOEMscan,forinstance,increasethesourcingofin-houserecycledbatteriesbyrelyingonforecaststhataretransmittedfromintelligentcomponenttrackingsystemsduringtheusephasesofelectricvehicles.

Furthermore,steeringthetransformationtodeliverthelong-termstrategyviashort-termobjectiveswillrequirechangesinthefinancialmodelsandgovernancestructure.ThedefinitionofnewKPIsiskeytomeasuringthesuccessofcircularinitiatives,buildingnewrelationswithinvestorsandshareholders,andvaluinglong-terminvestmentsalongsidelong-termROI.

Anassessmentofthelong-termrisksandthelevelofexposureagainstthemneedstobeconductedto

anticipatethebiggestchallengesthatbusinesseswillface,andatwhichtimescale.Thisisparticularlynotableforrawmaterialsourcingandalternativeprocessesandsolutions.Executiveswillthenbeabletousethefindingsofthisassessmenttofuelfar-reachingchanges:

Defineanewmodeofgovernancewithindicatorsthatmakeitpossibletomonitorthetransformationadvancementandfacilitatedecision-making(e.g.,th