Growing demand for healthcare from an expanding population, overconsumption of resources, waste, pollution, climate – all these factors are putting unsustainable pressure on our ecosystems.
On the upside, a number of global trends – e.g. the shift to value-based care, changing consumption patterns and the adoption of digital technology – are supporting the (essential) transition to a circular economy.
In a circular economy, products, parts and materials are kept at their highest utility and value at all times, circulating between customers. These productive loops maintain value while minimizing waste and the extraction of finite resource reserves.
For our business, we see the move from the linear model of ‘Take › make › dispose’ to a circular model of ‘Make › use › return’ in four returning loop: service, refurbish, parts recovery, recycle.
We have set ourselves a number of challenging targets for 2020:
Circular business models – such as offering customers access to, rather than ownership of, products – open up new opportunities for growth and cost savings, reduce resource risk, and facilitate smart asset management.
Addressing this customer need, we offer a wide variety of circular propositions:
• Performance- and access-based models
• Refurbishment and parts recovery
• On-site or remote upgrades
• Recycled materials Performance- and access-based models allow our customers to access products as a service. Our Lumify portable ultrasound service is a good example. Under this flexible subscription service, users can have access to transducers, an app and online ecosystem. The subscription service reduces upfront costs and improves patient access to innovative care. Refurbishment and parts recovery offers our customers a choice of pre-owned systems that have been thoroughly refurbished, upgraded and quality-tested. The Philips Diamond Select program makes first-rate equipment available at lower cost, offering high-quality refurbished systems with a full Philips warranty. In this way, customers can benefit from state-of-the art technology at a more affordable price. On-site or remote upgrades where key components are upgraded so that the system is like new: SmartPath is an economical way to enhance existing Philips systems to current technology or increased capacities. Key components are upgraded so that the system is like new. Recycled materials have become an integral part of product design of our consumer products. Our Performer Ultimate vacuum cleaner is a good example, containing 36% recycled plastics (as a percentage of the total plastics content). And by co-creating with recycled materials organizations, we can use our expertise to further improve the quality of materials.
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We collaborate closely with our customers, like-minded front-runners, (non-) governmental organizations, and other stakeholders, such as the Ellen MacArthur Foundation, to drive the adoption of circular thinking.
At the 2018 World Economic Forum, Philips announced the commitment to take back and repurpose all large medical systems that our customers are prepared to return to us. We are actively pursuing the trade-in of equipment such as MRI, CT and interventional X-ray systems and taking full control to ensure that all traded-in materials are repurposed in a responsible way. Read more here.
To drive this, we became the co-chair of the PACE (Platform for Accelerating the Circular Economy) initiative. The mission is to convene a coalition of like-minded organizations to make similar capital equipment pledges.
A growing group of industry leaders – including ASML, Cisco, Dell, HP, KPN, Mitsubishi Elevators and Vanderlande – are starting to take full responsibility for the reuse, refurbishment and recycling of the capital equipment they sell. This will incentivize extending the life of products and stopping waste at the end of product use, while capturing the economic value of materials.
Find out more about the Capital Equipment Pledge.
February 11, 2020
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