How the Circular Economy Is Unleashing New Sources of Business Value for OEMs

The circular economy drives innovation and sustainable growth by reducing carbon emissions and improving parts longevity and reuse.

OEMs are shifting to service-based models, like Caterpillar’s Cat Reman® program and IKEA’s furniture leasing, offering higher ROI and margins.

Embedding automated, data-driven processes throughout the product lifecycle unlocks efficiencies and new revenue streams.

Profitability is moving from equipment sales to the use phase, supported by trends in digitization, servitization, and sustainability.

New service-based models involve higher complexity and risk, requiring advanced skills to manage predictions and logistics efficiently.

Companies like Airbus and Johnson & Johnson use data ecosystems and digital analytics to optimize productivity and predict demand, achieving significant economic benefits.