A new report by the World Economic Forum found that the value of keeping things “within” our economy, rather than letting items pass “through” our economy could unlock a global growth potential of $4.5 trillion and also address the global challenges we’re faced with today, ranging from resource depletion to climate change. This is the core tenet of the circular economy, an ecosystem in which sustainability is embedded throughout a product’s lifecycle in the global economy. In a circular economy, products are designed to be made with recycled components, are produced with longevity in mind, are made to be refurbished at maximum and can ultimately be broken down into reusable metal and plastic parts at end of life.
Increasingly, tech companies are employing corporate sustainability programs that follow the principles of a circular system. Popular tech buyback programs and refurbishments remind us of the importance of the circular economy toward the end of a product’s lifecycle, but what many don’t realize is that the process begins at a product’s inception and is increasingly facilitated by emerging technologies such as the internet of things.
How IoT powers the circular economy
According to a European Commission report, 80% of a product’s environmental impact is influenced during the design process. Here, product designers and engineers make the production and manufacturing decisions that determine the energy efficiency, refurbishment costs and reusability factors that end users will face years into the future. By deploying IoT sensors, manufacturers can maintain a record of each component part’s makeup and origin to determine its environmental impact, and to help end customers make ethical decisions about the products they purchase and utilize. This attention to detail in a product’s initial stages will be critical throughout the life of the product as IT leaders use IoT sensors that are intuitive enough to enable visibility into real-time conditions, resource demands and future maintenance needs by analyzing data and performance.
From day one, end users are using IoT trackers on assets in the field to monitor key functions and essentially manage, diagnose and repair their enterprise tech products both at the plant or remotely. These assets in the field can include anything from machinery on a factory floor to wind turbines in an energy grid to IT equipment in a data center.
While the average lifespan for a piece of enterprise technology is about three to five, IoT sensors can read product performance and match it with data intelligence throughout its lifespan, alerting IT leaders to potential future systems issues, necessary system-wide updates or maintenance needs before anything goes haywire. This level of intelligent and autonomous diagnosis via IoT can save millions of dollars in repairs, replacements and failure costs in the long run. What would have traditionally required downtime or technical support is simplified through IoT sensing, minimizing downtime and unnecessary equipment overhaul.
Data collected through IoT sensors is also providing valuable business insights to IT and finance leaders alike. Valuable data analyzed is unveiling needs and inefficiencies in energy use, underutilized assets, materials consumption and stock inventories to help leaders make informed, data-backed decisions while fueling sustainability.
Refurbishment and accountability
As a product runs through its lifecycle, it naturally may pass through a number of users, undergoing refurbishments that allow the product to remain in use in the circular economy. As security threats continue to evolve, so must the technologies to defend against them. IoT systems, combined with emerging AI and blockchain technologies, can also defend against cyber-risks throughout the product lifecycle by ensuring secure authentication and advanced scanning and detection. Increasingly, value chain players are utilizing “product passports” that are generated by IoT which give a comprehensive view into the product as it passed through the economy, providing a complete view into past service tickets, recent software updates and potential future hiccups or security breaches. The product passport can also include repair and disassembly instructions to facilitate reuse and recovery in the hands of a future owner. These passports are a great alternative to shredding hard drives to protect information.
While the prospect of IoT has delivered unprecedented connectivity and data integrity, it has also helped pave the path for a more sustainable product lifecycle. This not only spares the environment from unnecessary waste and production byproducts, but it also helps organizations and IT leaders maximize their technology and trim costs associated with product repairs, unnecessary downtime and underutilization.
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