Product Life Extension Models are one of Circular Business Models (CBMs).
Circular Business Models (CBMs) are designed to turn all that waste that businesses and consumers generate into useful and valuable resources that can be used again in a sustainable way.
There are five commonly Circular Business Models (CBMs) as defined by Organization for Economic Cooperation and Development (OECD) including:
- Circular Supply
- Resource Recovery
- Product Life Extension
- Sharing
- Product Service System
Let’s take a look at how businesses operate under these five categories.
What are Product Life Extension Models?
Product Life Extension Models aim to extend the life cycle of their products in order to reduce the use of finite resources needed to produce them. By extending the lifespan of their products for as long as possible, businesses can prevent products from being thrown away too early as well as reduce the need to use even more scarce resources in the production process.
Rather than throwing away materials or allowing them to become waste, Product Life Extension Models seek to maintain or improve the durability of manufactured products. This could include designing products such as laptops or smartphones in the way that it is easier to repair and upgrade them without having to replace them entirely.
The models could also include designing and manufacturing products to enable customers to repaid these items more easily for themselves.
This can be done through a variety of methods, such as:
- Durable design. Designing products to be durable and long-lasting so that they can be used for a longer period of time.
- Modular design. Designing products to be modular so that they can be easily repaired, upgraded, or customized.
- Repair and maintenance services. Providing repair and maintenance services to extend the life of products.
- Remanufacturing. Remanufacturing used products to bring them back to near-new condition.
- Refurbishment. Refurbishing used products to improve their appearance and functionality.
- Product-As-A-Service (PAAS) models. Leasing products to customers instead of selling them outright.
- Shareable Products. Creating platforms for sharing products, such as car-sharing and tool-sharing services.
- Product Buyback Programs. Buying back used products from customers to resell, recycle, or remanufacture.
Examples of Product Life Extension Models
Examples include refurbishment of smartphones, remanufacturing motor cars and remanufacturing consumer electrical products.
Example 1: Caterpillar, the world’s largest manufacturer of construction equipment, remanufactures engine parts and other components, returning used parts to like-new conditions. Customers get the same quality, warranty, performance and reliability at a fraction of the price of a new version of the second life product.
Example 2: Fairphone is a Dutch smartphone manufacturer that is committed to making its products fair, modular, and long-lasting. The company uses fair trade materials and has a modular design that makes it easy to repair and upgrade the phone.
Example 3: Interface is a manufacturer of carpet tiles that designs its products to be easy to install, remove, and reuse. The company also has a take-back program that allows customers to return used carpet tiles for recycling.
Example 4: At the end of 2021, Apple announces the launch of its ‘Self Service Repair’ which enables customers to do their own repairs to their iPhones and Mac Computers using genuine Apple parts and tools.
Benefits of Product Life Extension Models
Product Life Extension Models that remanufacture products that have reached the end of their product life cycle can reduce the extraction of natural resources and the generation of waste by up to 80% compared with manufacturing completely new products.
Extending the life span of products by remanufacturing them also enables businesses to compete with new products from low-cost, low-quality rival producers. The reduced extraction, processing and transportation of natural resources also translates into energy savings for businesses.
Another benefit is that durability (longevity) of products can be a key competitive differentiator. This can help to give the firms a Unique Selling Point (USP) and competitive advantage. Successful product differentiation also enables businesses to charge premium prices leading to increased profit margins.
Challenges of Product Life Extension Models
Implementing Product Life Extension Models can be expensive, especially in the initial stages.
Consumers may not be willing to pay a premium for durable products or to change their behavior to support Product Life Extension Models.
Some Product Life Extension Models require new technologies that may not be readily available. In summary, Circular Business Models (CBMs) focus on multiple-use resources and products which are reused and remain in the economy for as long as possible. They are decision-making tools that focus on the environmental impacts of business activities through circularity – reducing, reusing, repairing and recycling raw materials, products and waste.
