transformation, circular economy and driving change at scale
TRANSCRIPT
Transformation: Circular Economy and Driving Change
Jonas Engburg@Jonas_EngburgSustainability Manager
IKEA
© Inter IKEA System
s B.V. 2015
Connecting the beginning and the end
CIRCULAR IKEA
Transformation, Circular Economy and Driving Change at Scale
Jonas Engberg, IKEA
1.5
3
A BETTER EVERYDAY LIFE FOR THE MANY PEOPLE
Consumers are increasingly aware of the restraints of our planet.
They tell us quality and durability of our products are important to give products a long life.
Some see our products as throw away products, that is not how we want to be perceived.
CUSTOMERS WANT MORE FROM IKEA
” I once bought a very expensive quality bed thinking that it would last for the rest of my life. Well, it didn't. It fell apart within a couple of years. The mattress, the frame, just everything. Now I have a simple IKEA steel bed and it's just as comfortable as the expensive one, and I can buy replacement parts.”
WHERE ARE WE TODAY?
”There products are not made to last. That is not sustainable.”
”If only IKEA had a pick up recycling service as well.”
” I often see BILLY shelving or LACK side tables on the curb. I am not claiming that these pieces are poorly designed, but people seem to think of them as throwaway.”
”Their prod-ucts have a throw away feel to it, that is what everyone does.”
”Great solutions for waste management, but what about the products.”
THE IKEA NO 1 CHALLENGE IS RESOURCE SCARCITY AND COST TO BE ABLE TO REACH THE MANY PEOPLE WITH THE THIN WALLETS
EXTRACTINGRAW MATERIALS
PARTS SUPPLY
MANUFACT-URING
DISTRIBUTION USER INCINE-RATION & LANDFILL
FROM LINEAR ECONOMY
How we design our products
What we offer our customers
How we sources and produce
TO CIRCULAR IKEA
When we close the circle, big things start to happen
=Huge
opportunities
It is about prolonging life ofproducts and materials and use less resources
The ability to prolong life, maintenance, repair, refurbish, spare parts.
The ability to be part of different stages of life and different home set up’s, to be able to add on.
Utilizing material from 2nd sources when it makes sense. 2nd hand sales, upgrade.
Designing for separation of materials and optimal production.
Designing the full circle beautiful products
DESIGN FOR CIRCULARITY
Example: A KARLSTAD sofa
Current setupIKEA VALUE CREATION
PRODUCT AGE1st life
Sources: Blocket.se, eBay.com, IKEA.com and Resource Chain projectEnd of Life value = scrap price for contained material, Refurbish service = One hour repair and change of legs
Longer product lifecycle improve sustainability performance and IKEA resource independence
IKEA VALUE CREATION
PRODUCT AGE
= EUR 1170
WHAT’S THE OPPORTUNITY?
New sale EUR 600
New sale EUR 600
2nd sale EUR 300
New coverEUR 160
Refurbish service
EUR 100
RecyclingEUR 10
1st life 2nd life 3rd life 4th life End of life
+95%
UK example: million pieces of furniture per year
IN PEOPLE’S HOMES
SECOND HAND MARKET
• No market share
• No focus
• No market share• No focus
Sources: Market analysis tool from “Circular Economy from Customer Perspective” project
5 million
655 million
• High market share• Strong focus
NEW PRODUCTION AND SALES
35 million
WASTE FLOW• Growing focus as source of
materials
36 million 18 xx
WHAT’S THE OPPORTUNITY?
THE WAY WE MEET OUR CUSTOMERS
ENGAGE
CARE & REPAIR RENT & SHARE TAKE BACK & RESELL
PROLONG PRODUCT LIFE-THE BUILDING BLOCKS
THANK YOU!