Circular Innovation
Unlock new sources of value: building sustainable and resilient industrial equipment in the circular economy.
Sustainability is driving meaningful progress in the industrial equipment industry, reshaping how equipment is designed, built, operated and maintained. The industry is evolving to align with circular economy principles, where equipment is increasingly designed for durability and resource efficiency while making repair, upgrades and repurposing more straightforward.
Manufacturers use virtual twins to refine product development, reducing reliance on physical prototypes and virtually optimizing production and assembly. Meanwhile, Industrial Internet of Things (IIoT) sensors, AI-powered analytics and self-monitoring systems optimize equipment performance in the field by anticipating maintenance needs and limiting downtime through continuous real-time monitoring. Modular designs also allow components to be swapped or upgraded instead of discarded, where machines are systematically disassembled at the end of their lifecycle so valuable components can be reintroduced into the supply chain. The shift towards circularity is redefining sustainability and performance standards across the industry.
From Linear to Circular: The Sustainable Revolution in Industrial Equipment
- Environmental Impact
- Extended Product Lifecycle
- Design and Resource Efficiency
- Regulatory Adaptation and Compliance
- Sustainable Marketing Experiences
Sustainable manufacturing: Cutting waste, energy consumption and emissions in production is now essential for long-term success. Factories are adopting smarter production methods such as replacing traditional die cutting with laser cutting to use materials more efficiently. Remanufacturing – restoring used equipment to like-new condition – alone can lower costs up to 20% to 60%. Manufacturers are also refining sourcing strategies, improving plant efficiency and using virtual simulations to streamline production before implementation. Furthermore, virtual twins help limit material waste while shifting to renewable energy, reducing reliance on fossil fuels. Data-driven insights are also used to improve efficiency, lower costs and strengthen sustainability efforts.
Circular supply chains: Industry executives report that circular supply chains – where materials are reused, remanufactured or recycled – cut material use by 28% on average, lowering costs and reducing reliance on scarce materials. At the same time, circular practices eliminate 39% of greenhouse gas emissions, making a tangible difference in sustainability efforts while improving overall efficiency. Moreover, greater transparency in sourcing allows manufacturers to track sustainability from extraction through to end-of-life, ensuring compliance with evolving regulations and reinforcing their commitment to sustainable practices.
Managing obsolescence: Extending equipment lifespans starts with smart design: making upgrades simpler and allowing for seamless compatibility with emerging technologies. Modular components let customers enhance performance without full-scale replacements, while IIoT-enabled predictive maintenance keeps servicing on schedule. Digital maintenance records provide a clear history of wear and repair, preventing unexpected breakdowns and keeping machines running efficiently for longer.
Recycling and reuse: Thoughtful design and recovery strategies keep valuable materials in circulation. Modular design simplifies disassembly, making it easier to replace or repurpose components. Take-back programs and recycling partnerships help manufacturers recover and reuse materials responsibly. When waste cannot be avoided, it can often become a valuable resource for other industries. For example, some equipment manufacturers supply hazardous byproducts as raw materials to other companies, turning costly waste disposal into a cost-saving opportunity. Regulations like the European Union’s Circular Economy Action Plan are also driving businesses to rethink end-of-life strategies, reinforcing the importance of material recovery and long-term sustainability.
Smart material choices: Lighter, stronger, and more sustainable materials are shaping the future of industrial equipment. Companies are integrating recycled metals, bio-based polymers, and composite materials to lower reliance on finite resources. Over the next 5 to 10 years, the value created by new material models, such as recycling and additive manufacturing, could represent up to 20% of revenue, offering significant financial and operational benefits.
Energy-efficient equipment: Sustainability isn't just about how products are made; it’s also about how they perform over time. Smart energy management systems and designs that prioritize efficiency are helping businesses cut operational costs and curb emissions. Equipment built with modular, upgradable components stays in service longer, avoiding unnecessary replacements and limiting resource consumption.
Adapt to evolving environmental policies: Policies like the UN Paris Agreement and the EU Circular Economy Action Plan are pushing manufacturers to rethink sourcing, carbon emissions, and product recyclability. As environmental regulations constantly shift, businesses must stay informed and flexible. Transparency across the value chain is crucial: clear reporting on material use, emissions, and recycling efforts builds trust with regulators, customers, and partners while supporting long-term compliance.
Achieve compliance through strong data management: Managing environmental impact starts with reliable data. Tracking materials, emissions, and recycling efforts helps businesses make informed sustainability decisions. Digital platforms simplify audits and reporting, while lifecycle assessment tools provide deeper insights into material traceability and responsible recycling.
Virtual marketing: Traditional showrooms and physical prototypes consume vast amounts of materials and energy, generating waste. Virtual twin experiences offer an alternative that limits environmental impact while providing customers with an interactive way to explore and test equipment remotely. As more businesses shift to service-based models like equipment as a service (EaaS), these virtual experiences will become a key part of customer engagement and operational planning.
Engaging your customers: Companies that embrace circularity not only strengthen customer relationships but also unlock new business opportunities. A growing number of industry executives see a win-win scenario in which circularity lowers the total cost of ownership for customers while deepening long-term relationships with them. By cutting waste, extending equipment lifespans, and offering upgradeable solutions, businesses build trust and secure customer loyalty.
A Path to Circular Innovation for Industrial Equipment
Today, almost half of large industrial equipment companies have made circularity commitments, yet many still treat it as a regulatory requirement rather than a business opportunity. Forward-thinking manufacturers recognize that circularity isn’t just about compliance; it’s a path to new revenue streams, supply chain resilience, and stronger customer relationships.
Widespread research suggests that manufacturers who embed circularity into their business models gain a competitive edge. They secure access to limited materials, lower supply chain risks, and generate new, recurring revenue opportunities by selling services alongside products.
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Dassault Systèmes’ integrated solutions bring new ways for companies to explore the potential of circular innovation, allowing them to rethink how they design, produce and manage their equipment across the entire lifecycle – even into a second life.
With the 3DEXPERIENCE® platform, industrial equipment companies can analyze the environmental and ethical impact of their products early in the design and engineering stages, considering recyclability from the start.
Manufacturers that rely on a centralized platform will seamlessly connect their operations and transform their plants into sustainable factories. Data-driven insights and organization-wide visibility help them to optimize their manufacturing plans, factory spaces and layouts, and find new ways to manage waste.
The 3DEXPERIENCE® platform provides companies with fast and efficient access to up-to-date and trustworthy data from multiple sources, including connected equipment in the field. Dassault Systèmes’ advanced analytics capabilities interpret evolving standards, complex product structures and vast data models, revealing actionable insights in user-customized dashboards.
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FAQ
Circular innovation is the development of products, services, and business models that support a circular economy—one that minimizes waste and maximizes resource reuse. It focuses on designing for longevity, using sustainable materials, enabling reuse and recycling, and leveraging digital tools like Virtual Twins to optimize lifecycle performance. The goal is to create sustainable value while reducing environmental impact.
Circular economy practices include designing products for durability and easy recycling, reusing and repairing items, refurbishing and remanufacturing, recycling materials, using renewable resources, and implementing sharing or product-as-a-service models to minimize waste and resource use.
The circular economy works by minimizing waste and keeping resources in use through reuse, repair, recycling, and sustainable design—creating a closed-loop system that benefits the environment and economy.
Circularity in industrial equipment means designing and managing machines to last longer, be easily repaired or refurbished, and have their parts reused or recycled to reduce waste and resource use.