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economy. This provides further opportunities for the development of industrial
symbioses (see Chap. 5). Re-use is inherently local. The geographic scale of Loop
1 activities (remanufacturing) is determined by the mobility of goods, the extent of
standardisation of goods and the batch size necessary to reach a competitive remanufacturing volume. For immobile goods, such as infrastructure and buildings,
service-life extension activities require mobile labour and mobile workshops. For
stand-alone goods, such as engines of tractors, buses, ambulances and vintage vehicles, local remanufacturing workshops may be optimal because the remanufacturing costs are secondary to the clients’ wish to continue operating the vehicle. In
textile leasing (hotel or hospital textiles, which have to be washed or sterilised
daily), the optimal transport distance is about 100 km (Stahel 1995: 249); franchising can therefore be a better business model than centralised treatment. The geographic scale of Loop 2 activities (reprocessing) is determined by the technology
used; many metallurgical processes, associated with high capital cost, need to be
operated at large scale to be competitive with primary production. However, the
dominance of labour and logistic costs, rather than capital, in re-use and remanufacturing reduce the economies of scale and are therefore consistent with smaller scale,
decentralised operations.
Examples of Business Activities in the Performance Economy
(Figure 7.4)
(1) RETAINED OWNERSHIP + (2) OEM + (3) O&M
Selling Performance
– tyre use by the mile (e.g. Michelin)
– power by the hour (e.g. Rolls-Royce turbines)
– illumination: “pay per lux” ( e.g. Philips)
– office equipment: “pay per copy” (e.g. Xerox)
(1) RETAINED OWNERSHIP + (2) OEM
Molecules as Services
– chemical leasing: “rent a molecule” (e.g. lubricants, cleaning solvents)
– mining: nation state grants “licence to operate” but retains ownership of
the output (WEF 2015)
(2) OEM + (3) O&M
Function Guarantee
– commercial and service equipment (e.g. freezers, elevators)
– chemical management systems
– integrated crop management
(continued)
W.R. Stahel and R. Clift
economy. This provides further opportunities for the development of industrial
symbioses (see Chap. 5). Re-use is inherently local. The geographic scale of Loop
1 activities (remanufacturing) is determined by the mobility of goods, the extent of
standardisation of goods and the batch size necessary to reach a competitive remanufacturing volume. For immobile goods, such as infrastructure and buildings,
service-life extension activities require mobile labour and mobile workshops. For
stand-alone goods, such as engines of tractors, buses, ambulances and vintage vehicles, local remanufacturing workshops may be optimal because the remanufacturing costs are secondary to the clients’ wish to continue operating the vehicle. In
textile leasing (hotel or hospital textiles, which have to be washed or sterilised
daily), the optimal transport distance is about 100 km (Stahel 1995: 249); franchising can therefore be a better business model than centralised treatment. The geographic scale of Loop 2 activities (reprocessing) is determined by the technology
used; many metallurgical processes, associated with high capital cost, need to be
operated at large scale to be competitive with primary production. However, the
dominance of labour and logistic costs, rather than capital, in re-use and remanufacturing reduce the economies of scale and are therefore consistent with smaller scale,
decentralised operations.
Examples of Business Activities in the Performance Economy
(Figure 7.4)
(1) RETAINED OWNERSHIP + (2) OEM + (3) O&M
Selling Performance
– tyre use by the mile (e.g. Michelin)
– power by the hour (e.g. Rolls-Royce turbines)
– illumination: “pay per lux” ( e.g. Philips)
– office equipment: “pay per copy” (e.g. Xerox)
(1) RETAINED OWNERSHIP + (2) OEM
Molecules as Services
– chemical leasing: “rent a molecule” (e.g. lubricants, cleaning solvents)
– mining: nation state grants “licence to operate” but retains ownership of
the output (WEF 2015)
(2) OEM + (3) O&M
Function Guarantee
– commercial and service equipment (e.g. freezers, elevators)
– chemical management systems
– integrated crop management
(continued)
W.R. Stahel and R. Clift