Circular Economy in Nordic Manufacturing Industry
Delve into the value case tool designed to analyze the potential of circular economy business models for companies in the Nordic manufacturing sector. Gain insights on cost structures, product information, and revenue potential to make informed decisions for a sustainable future.
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Circular Economy for the Nordic Manufacturing Industry Value case tool User guide 2020
Introduction Value case summary General inputs Business model inputs Introduction The purpose of the value case tool is to give you a high-level understanding of the value potential of circular economy business models for your company. How it works GENERAL INPUTS Input data for last financial reporting (year 0) COST STRUCTURE In this section, please add all costs on company level. Calculation Value in % share of COGS Cost of goods sold 0,00 EUR 0,00 EUR 100% Direct materials 0,00 EUR 0,00 EUR 0% Enter your company data in the General inputs sheet. Direct labor 0,00 EUR 0,00 EUR 0% Manufacturing overhead 0,00 EUR 0,00 EUR 0% Utilities Other 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0% 0% Operating expenses Calculation Value in % share of SG&A Selling, general & administrative expenses Selling General administration 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 100% 0% 0% 1 Calculation Value in % share of other OPEX Other operating expenses R&D expenses IT expenses 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 100% 0% 0% PRODUCT INFORMATION This section is for product-related information. In other words, it is not a comprehensive business case tool, but rather a tool to help you understand the value levers of circular business models and their sub-models estimate revenue potential, cost impact and investment need for your company through simple calculations identify the most promising circular business models from a financial perspective Product Retail price [ / unit] Product lifecycle [years] Add product name here 0,00 EUR 1 Units produced and sold / year [units] 0 Annual sales growth [%] 0% Year 1 Year 2 Year 3 Year 4 Year 5 Units produced and sold / year Total material cost / year [ ] 0 0 0 0 0 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Calculation Value in % share of COGS Cost of goods sold / unit Direct materials Direct labor Manufacturing overhead Utilities Other 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 100% 0% 0% 0% 0% 0% Enter data on the business model specific tabs for the sub-models that you have identified as relevant for your company. 1. CIRCULAR SUPPLY CHAIN Use of renewable energy, bio-based or potentially completely recyclable materials. 1.1. Build to last Design products that are durable and easy to repair (e.g. modular) Value case summary - Build to last 1,00 0,90 0,80 0,70 0,60 0,50 0,40 0,30 0,20 0,10 0,00 Year 1 Year 2 Year 3 Year 4 Year 5 Total revenue potential [ ] Total investment need [ ] Breakeven Total EBITDA potential [ ] Year 1 Year 2 Year 3 Year 4 Year 5 2. SHARING PLATFORM Increase usage rates through collaborative models for usage, access, or ownership Total revenue potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Total EBITDA potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Total investment need [ ] Develop solutions that enable increased use of capacity. 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 2.1. Share Breakeven year: > 5 years Value case summary - Share 1,00 Value lever (tier 1) Value lever (tier 2) Value potential [ ] 0,90 0,80 Year 1 Year 2 Year 3 Year 4 Year 5 0,70 0,60 0,50 Revenue Increase sales 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,40 0,30 Estimated increase in sales [%] 0% 0% 0% 0% 0% 0,20 2 0,10 0,00 Cost Reduce volume of direct materials 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Year 1 Year 2 Year 3 Year 4 Year 5 Total revenue potential [ ] Investment need [ ] Breakeven Total EBITDA potential [ ] Estimated material volume reduction [%] 0% 0% 0% 0% 0% 3. PRODUCT LIFE EXTENSION Prolongation of the product lifecycle through repair, reprocessing, upgrading and resale. Reduce component variety 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Year 1 Year 2 Year 3 Year 4 Year 5 Total revenue potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Total EBITDA potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Estimated input cost reduction [%] 0% 0% Investment need [ ] 0% 0% 0,00 EUR 0% 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 3.1. Repair & Maintain Provide repair and maintenance services to extend the life of existing products in the market. Reduce inventory cost 0,00 EUR 0,00 EUR > 5 years 0,00 EUR 0,00 EUR Breakeven year: Value lever (tier 1) Value lever (tier 2) Value potential [ ] Inventory cost (for selected product) [ ] 0,00 EUR Year 5 Value case summary - Repair & Maintain Year 1 Year 2 Year 3 Year 4 Estimated reduction of inventory cost [%] 0% 0% 0% 0% 0% 1,00 Revenue Transaction fees 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,90 0,00 EUR 0,80 Volume of products on sharing plaftform [units] 0 0 0 0 0,70 0 Days shared / year [days] 0 0 0 0 0,60 0 Price / day [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,50 Platform fee / transaction [%] 0% 0% 0% 0% 0,40 0% 0,30 Add-on sales 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,20 0,10 Average length of sharing agreement [days] 1 1 1 1 0,00 1 Volume of add-on sales [% of sharing agreements] 0% 0% 0% 0% 0% Year 1 Year 2 Year 3 Year 4 Year 5 Value of add-ons [% of daily fee] 0% 0% 0% 0% 0% Total revenue potential [ ] Total investment need [ ] Breakeven Total EBITDA potential [ ] Cost Ongoing platform development & maintenance 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Estimated increase in IT costs [%] 0% 0% 0% 0% 0% Year 1 Year 2 Year 3 Year 4 Year 5 Total revenue potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Total EBITDA potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Total investment need [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Breakeven year: > 5 years Value lever (tier 1) Value lever (tier 2) Value potential [ ] Year 1 Year 2 Year 3 Year 4 Year 5 Revenue Service sales 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Number of repair visits per year [visits] 0 0 0 0 0 Repair price [ / visit] 0,00 EUR Revenue potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Number of maintenance visits per year [visits] 0 0 0 0 0 Maintenance price [ / visit] 0,00 EUR Revenue potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Add-on sales 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Add-on sales potential [% repair visits] 0% 0% 0% 0% 0% Value of add-ons [% of repair price] 0% 0% 0% 0% 0% Please note that the tool should be used only for one product, meaning that you should create a separate copy of the Excel file for each product you want to assess. VALUE CASE SUMMARY Value case summary 1,00 0,90 0,80 Review overall value potential in the Value case summary sheet. 0,70 0,60 0,50 0,40 Overall value potential [ ] 0,30 Year 1 Year 2 Year 3 Year 4 Year 5 0,20 Total revenue potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,10 Total EBITDA potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 Investment need [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Year 1 Year 2 Year 3 Year 4 Year 5 Total revenue potential [ ] Investment need [ ] Breakeven year: > 5 years Breakeven Total EBITDA potential [ ] 3 Business model Nr. Sub-model Total revenue potential [ ] Total EBITDA potential [ ] Total investment need [ ] Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5 Circular supply chain 1.1 Build to last 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 1.2 Circular supplies 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Sharing platform 2.1 Share 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Product Life Extension 3.1 Repair & Maintain 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 3.2 Upgrade 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 3.3 Resell 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 3.4 Remanufacture 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Recovery & Recycling 4.1 Recycle / upcycle 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 4.2 Return 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR
Introduction Value case summary General inputs Business model inputs General inputs Before starting the business model specific calculations, enter generic cost- and product-related data on the General inputs sheet. All figures should be added for the latest financial year you have data for (=Year 0). Enter value either in or as a share [%] of the overall figure (COGS, SG&A, other OPEX) These values should be on overall company level COST STRUCTURE In this section, please add all costs on company level. Calculation Value in % share of COGS Cost of goods sold 0,00 EUR 0,00 EUR 100% These values should be on product level Direct materials 0,00 EUR 0,00 EUR 0% Direct labor 0,00 EUR 0,00 EUR 0% Manufacturing overhead 0,00 EUR 0,00 EUR 0% Utilities Other 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR PRODUCT INFORMATION This section is for product-related information. 0% 0% Operating expenses % share of SG&A Product Retail price [ / unit] Product lifecycle [years] Add product name here Calculation Value in 0,00 EUR Selling, general & administrative expenses Selling General administration 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Units produced and sold / year [units] 100% 0% 0% 1 0 Calculation Value in % share of other OPEX Annual sales growth [%] 0% Other operating expenses R&D expenses IT expenses 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Units produced and sold / year Total material cost / year [ ] 100% 0% 0% Year 1 Year 2 Year 3 0 0 0 0,00 EUR 0,00 EUR 0,00 EUR These values should be on overall company level Calculation Value in % share of COGS Cost of goods sold / unit Direct materials Direct labor Manufacturing overhead Utilities Other 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 100% 0% 0% 0% 0% 0% OTHER INFORMATION Manufacturing waste Total wasted material [tonne/year] of which landfill waste [%] 0 0%
Introduction Value case summary General inputs Business model inputs Business model inputs After you have filled in the general inputs, start entering data in the business model specific sheets for those sub-models that you have identified as most relevant for your company. When you open a business model specific sheet, you will first see a summary view of the calculations. To view more information, press the [+] signs at the top and left side of the sheet. View more information on the calculation parameters. View calculation formulas. View value levers and cells for calculation input data.
Introduction Value case summary General inputs Business model inputs Business model inputs Enter data for calculations in the yellow cells below each value lever. If you feel that some value lever is not relevant for your company, you can leave the row empty. 2.1. Share Develop solutions that enable increased use of capacity. Value case summary - Share 1,00 0,90 0,80 0,70 0,60 0,50 0,40 0,30 0,20 0,10 0,00 Year 1 Year 2 Year 3 Year 4 Year 5 Total revenue potential [ ] Investment need [ ] Breakeven Total EBITDA potential [ ] Year 1 Year 2 Year 3 Year 4 Year 5 Total revenue potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Total EBITDA potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Investment need [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Breakeven year: > 5 years Value lever (tier 1) Value lever (tier 2) Value potential [ ] Year 1 Year 2 Year 3 Year 4 Year 5 Revenue Transaction fees 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR If you want, you can either keep the values constant or change them over time. Add-on sales 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Average length of sharing agreement [days] 1 1 1 1 1 Volume of add-on sales [% of sharing agreements] 0% 0% 0% 0% 0% Value of add-ons [% of daily fee] 0% 0% 0% 0% 0%
Introduction Value case summary General inputs Business model inputs Value case summary When you have completed calculations for all relevant sub-models, you can view a summary of the overall value potential in the Value case summary sheet. VALUE CASE SUMMARY Value case summary Summary of overall value potential, including all sub-models 1,00 0,90 0,80 0,70 0,60 0,50 0,40 Overall value potential [ ] 0,30 Year 1 Year 2 Year 3 Year 4 Year 5 0,20 Total revenue potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,10 Total EBITDA potential [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 Investment need [ ] 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Year 1 Year 2 Year 3 Year 4 Year 5 Total revenue potential [ ] Investment need [ ] Breakeven year: > 5 years Breakeven Total EBITDA potential [ ] Business model Nr. Sub-model Total revenue potential [ ] Total EBITDA potential [ ] Total investment need [ ] Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5 Circular supply chain 1.1 Build to last 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 1.2 Circular supplies 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Total revenue and EBITDA potential, and investment need for each sub-model Sharing platform 2.1 Share 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Product Life Extension 3.1 Repair & Maintain 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 3.2 Upgrade 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 3.3 Resell 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 3.4 Remanufacture 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR Recovery & Recycling 4.1 Recycle / upcycle 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 4.2 Return 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR 0,00 EUR
