Linear Economy

In a linear process, resources are taken from the Earth and used to manufacture products, and then discarded as waste. When visualized, a linear economy resembles a flat line. Value in the linear economy is created by mass production and the selling of products.

However, the tendency of a linear economy toward wasting valuable materials is a significant problem on a planet with finite resources. A linear economy exhausts raw materials and energy, which results in CO2 emissions—worldwide, 85% of energy comes from nonrenewable sources. 2

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Circular Economy

In a circular economy, the initial production of waste is stopped. The circular economy is a framework, a continuous flow of materials categorized by two main cycles—the technical and biological cycles. Within the technical cycle, products and materials nearing the end of their useful life are kept in circulation through processes such as reuse, refurbishment recyclability, remanufacture, and recycling. In the biological cycle, the nutrients from biodegradable materials are returned to the Earth to regenerate nature.

The circular economy provides three important principles:

  1. Elimination of waste
  2. Circulation of products and materials
  3. Regeneration of the natural environment
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PLM’s Function in the Circular Economy

A circular economy offers the chance to innovate new business models and rethink what we mean when we say something is a product, a service, or a product-as-a-service (PaaS) because it is an invention in and of itself. Adopting a more circular way of thinking requires having different expectations for information technology solutions, such as PLM, that support the implementation of these new business models’ commercial strategies.

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