Tag: circular economy

Not just an ethical considerations but a value for success. Sustainable production as an opportunity for producers to differentiate themselves in the current market.

Manufacturing Group, School of Management

Nowadays, the manufacturing industry stands at a critical crossroads where environmental sustainability is no longer just a buzzword but a must have. The imperative for sustainable practices in manufacturing goes beyond ethical considerations; it directly impacts financial viability, brand image, and regulatory compliance. As global awareness of environmental issues intensifies, stakeholders across the manufacturing sector are recognizing that sustainable practices are not just optional but essential for long-term success.

The financial case for environmental sustainability was initially perceived as a cost burden, instead, the sustainable practices, are now recognized as drivers of cost savings and operational efficiency. By reducing energy consumption, minimizing waste generation, and optimizing resource utilization, manufacturers can significantly lower their operating expenses. Investments in renewable energy sources, energy-efficient technologies, and waste reduction initiatives often lead to substantial long-term cost savings, enhancing profitability and competitiveness.

Moreover, sustainable manufacturing practices, like the adoption of circular economy strategies, mitigate financial risks associated with volatile resource prices and regulatory uncertainty. As the costs of raw materials and energy continue to fluctuate, companies that embrace sustainability are better positioned to weather market fluctuations and maintain stable production costs. Additionally, forward-thinking investors are increasingly factoring environmental performance into their decision-making processes, making sustainability initiatives attractive for capital investment and fostering sustainable growth.

In today’s socially conscious marketplace, brand image plays a key role in consumer perceptions and purchasing decisions. Companies that demonstrate a commitment to environmental sustainability not only attract environmentally conscious consumers but also enhance brand loyalty and reputation. Adopting sustainable manufacturing practices not only mitigates environmental impact but also shields companies from reputational damage and potential boycotts. By aligning their brand with values of corporate responsibility, manufacturers can differentiate themselves in the market and cultivate a positive brand image for both consumers and stakeholders. Indeed, companies that prioritize sustainability not only reap financial rewards through cost savings and operational efficiency but also enhance brand loyalty, mitigate reputational risks, and stay ahead of regulatory requirements.

Governments around the world are enacting increasingly stringent environmental regulations to address climate change, pollution, and resource depletion. From emissions standards to waste management regulations, manufacturers are facing a complex web of environmental mandates that necessitate proactive compliance measures. Failure to adhere to these regulations can result in costly fines, legal liabilities, and operational disruptions.

However, regulatory compliance is not just about avoiding penalties; it presents an opportunity for manufacturers to stay ahead of the curve and gain a competitive advantage. Furthermore, staying abreast of evolving regulations enables manufacturers to anticipate future compliance challenges and adapt their operations accordingly, ensuring long-term viability and resilience in an increasingly regulated environment.

As the manufacturing industry continues to evolve in response to global environmental challenges, embracing sustainability is not just a matter of responsibility; it is a strategic imperative for long-term success and resilience, it can position companies as industry leaders and let them gain preferential treatment from regulators, customers, and investors.

A sustainable-driven engine is especially relevant for the Italian manufacturing domain characterized by medium and small realities facing different challenges in pursuing such a transition due to limited financial capital, lack of skills, and lack of adequate infrastructure. Being aware about this challenging context, the Manufacturing Group of the School of Management of Politecnico di Milano aims at boosting the sustainable and circular transition of manufacturing companies by transferring the scientific knowledge generated in both national and international research projects into the industrial domain. To provide a complete support by covering the several aspects characterizing the transition, different but specific assessment methodologies have been developed.

Manufacturing companies can be supported in identifying the circular practices to be established internally to the company and externally by collaborating with external entities based on their strategic goals and current operations. Moreover, they could easily identify the set of data needed to establish such circular practices and chose the proper suppliers evaluating their sustainable oriented performances. Among all, considering the lack of skills perceived, the research group support companies in measuring this perception by mapping the skills and job profiles available internally to the company to identify proper training paths focused on circularity of sustainability dimensions.

Recovering sericin to produce high-tech materials, in a circular economy perspective

The RITESSERE (Silk Sericin materials from textile industry by-products) project has kicked off, and it aims to use the by-product from the treatment of raw silk, sericin, for the production of new materials and devices in the field of life sciences.

RITESSERE will evaluate new technologies which, starting from the sericin obtained from raw material of Italian origin with traceability certification (cocoon or raw silk), will lead to the obtainment of both two-dimensional electrospun matrices composed only of sericin, and new materials based on specifically modified sericin. These products will be characterized from a chemical-physical and morphological point of view, and the impact of their introduction on the textile industry market and on other high-tech sectors will be analysed.

In particular, the advantages of the circular approach will be demonstrated through three actions:

• sericin-based facial masks for the cosmetic industry
• three-dimensional scaffolds of sericin for cell culture
• modified sericin-based film for the packaging industry.

RITESSERE aims to demonstrate how sericin can be systematically recovered and used to produce high-tech materials. Starting from silk of Italian origin, RITESSERE will define and optimize a technological process aimed at giving nobility to this waste product, proposing a new sustainable and circular method for the silk production cycle.

The results of the project will also be conveyed and made available through continuous interaction with the Advisory Board, made up of players with a driving role in the silk industry, in the definition of new circular economy practices and in the involvement of civil society (Associazione Costruttori Italiani di Macchinario per l’Industria Tessile, Donne in Campo, Ufficio Italiano Seta, MADE-Competence Center Industria 4.0, Rigano Laboratories, Associazione per il Museo della Seta di Como).

The three-year project RITESSERE is a project funded by Fondazione Cariplo with the Economia Circolare – Promuovere ricerca per un futuro sostenibile program, and is led by professors Paolo Rosa and Sergio Terzi of the Department of Management, Economics and Industrial Engineering and by Professor Simone Vesentini of the Department of Electronics, Information and Bioengineering of the Politecnico di Milano.

The Department of Management, Economics and Industrial Engineering, will deal with the economic analyzes of the sericin market, the silk sector and the current circular strategies adopted in the textile sector.

Partners in the project, coordinated by our university, are Università degli Studi Milano Bicocca and Consiglio per la ricerca in agricoltura e l’analisi dell’economia agraria (Council for Agricultural Research and Agricultural Economics Analysis).

What is the circular economy and how can it become part of our daily lives? We asked Simone Franzò, Director of the International Master in Environmental Sustainability & Circular Economy at MIP.

When we talk about a circular economy, what are we referring to?

A circular economy is an “emerging” economic model that contrasts with the traditional “linear” model (summarised with the terms take – make – dispose) and aims to maximise the efficient use of resources. Reuse and maintenance of products, extension of their life cycle, recovery and recycling of materials are just a few of the practices on which a circular economy is based. It is a model that brings benefits not only to the environment, but that also generates new business opportunities. This is why we study the managerial implications that this model can have in companies that intend to apply it.

McKinsey actually predicts that, in Europe alone, the move to a circular economy could generate €1.8 trillion in profits by 2030. Are companies ready to seize these opportunities?

First of all, I would like to make a premise: the topic of the circular economy is part of a broader context, which is that of sustainability. This is subdivided into three different perspectives, namely environmental, economic and social, which must be considered jointly to enable so-called sustainable development.
That said, from my point of view, companies are increasingly sensitive and aware of the impact that their activities have, not only for themselves, but also for the “context” within which companies operate. However, translating this growing awareness into concrete initiatives aimed at pursuing the goals of sustainability and the circular economy is a very important challenge in many respects, primarily at a cultural level. In fact, it is a question of moving from a “purely economic” orientation, aimed at maximising the value that the company creates for shareholders, to a broader perspective, which provides for the creation of value for all stakeholders as well as, of course, for the shareholders.

A qualitative leap from the cultural point of view, however, is not enough; a change is also needed on the managerial side. Adopting the principles of the circular economy, in fact, requires the company to make significant changes in terms of strategy – that is, to shift from traditional business models, linked to a linear economy, to new, circular models. This obviously has important repercussions from an operational point of view as well. It is no longer enough to think in terms of the company, but we need to move to a broader perspective, that of the supply chain, involving for example suppliers and customers. This is a significant challenge from a managerial point of view.

This is an interesting perspective, but how does it translate into career opportunities – both present and future? Why should a young person entering the job market choose this sector?

There are many careers that can be undertaken in this area. The potential consequences associated with the spread of the circular economy – as shown by the numbers cited above – are enormous. However, it is appropriate to reflect on the new skills required of companies, primarily from a managerial point of view, in order to enable the transition to the circular economy, which opens up important windows of opportunity for young people (and others) looking for a job. Consider, for example, the need for a company to redesign its range of products and services, as well as the business model through which they are offered. In fact, designing new products, services, or business models based on the principles of the circular economy requires specific skills, which are different from those traditionally relied upon to design linear-economy services and business models.

In addition to the impact on innovation processes, all the other business functions must be imbued with the principles of the circular economy: think, for example, of logistics – which in some cases play a crucial role in the implementation of circular business models – and purchasing to marketing, to make customers aware of the characteristics of the “circularity” of the products and services offered by a company.

MIP offers five different Masters dedicated to the topic of sustainability and one is dedicated to the circular economy. Why is this?

As I said, the issue of sustainability is quite broad and encompasses three perspectives: environmental, economic and social. The theme of the circular economy definitely plays a central role in the broad focus of sustainability, to the extent that implementing circular economy business models can enable the achievement of sustainability goals.
May I say that, in this context, our Business School is an ideal place to study and analyse these phenomena. In the first place, because of the coherence between this topic and the purpose of our School, which aspires to make a positive impact on society by inspiring and collaborating with the innovators of today and tomorrow. What we can also offer our students is a particular focus on the study and analysis of strategic issues related to the management of a business. This is an important element for those who want to guide companies towards circular business models, given that change must also be addressed from a strategic-managerial point of view. Moreover, we take a “data-driven” approach to problem solving, in line with the engineering imprint that characterises our Business school and, more generally, the Politecnico di Milano.
A final element that distinguishes our range of courses is our strong collaboration with companies. For the International Master in Environmental Sustainability & Circular Economy we have already involved about 15 companies as sponsors. This provides a number of opportunities for our students, from company testimonials during the training course – which give the theoretical sessions an experiential configuration – to the possibilities of internships or carrying out the project work at the end of the Master at companies, in order to be able to apply what you have learned during the Master in the field.