KcKinsey Quarterly has a look at closed-loop "cradle to cradle" style industrial manufacturing systems which it calls the "circular economy" - Remaking the industrial economy. MKQ also has a related interview with the CEO of Phillips - Toward a circular economy: Philips CEO Frans van Houten.

Visualize, for a moment, the industrial economy as a massive system of conveyor belts—one that directs materials and energy from resource-rich countries to manufacturing powerhouses, such as China, and then spirits the resulting products onward to the United States, Europe, and other destinations, where they are used, discarded, and replaced. While this image is an exaggeration, it does capture the essence of the linear, one-way production model that has dominated global manufacturing since the onset of the Industrial Revolution.

Increasingly, however, the linear approach to industrialization has come under strain. Some three billion consumers from the developing world will enter the middle class by 2030. The unprecedented size and impact of this shift is squeezing companies between rising and less predictable commodity prices, on the one hand, and blistering competition and unpredictable demand, on the other. The turn of the millennium marked the point when a rise in the real prices of natural resources began erasing a century’s worth of real-price declines. The biggest economic downturn since the Great Depression briefly dampened demand, but since 2009, resource prices have rebounded faster than global economic output. Clearly, the era of largely ignoring resource costs is over.

In light of volatile markets for resources, and even worries about their depletion, the call for a new economic model is getting louder. In response, some companies are questioning the assumptions that underpin how they make and sell products. In an effort to keep control over valuable natural resources, these companies are finding novel ways to reuse products and components. Their success provokes bolder questions. Could economic growth be decoupled from resource constraints? Could an industrial system that is regenerative by design—a “circular economy,” which restores material, energy, and labor inputs—be good for both society and business? If the experience of global automaker Renault is any indicator, the answer appears to be yes.

A circular economy replaces one assumption—disposability—with another: restoration. At the core, it aims to move away from the “take, make, and dispose” system by designing and optimizing products for multiple cycles of disassembly and reuse.2 This effort starts with materials, which are viewed as valuable stock to be used again, not as elements that flow through the economy once. For a sense of the scale involved, consider the fast-moving consumer-goods industry: about 80 percent of the $3.2 trillion worth of materials it uses each year is not recovered.

The circular economy aims to eradicate waste—not just from manufacturing processes, as lean management aspires to do, but systematically, throughout the various life cycles and uses of products and their components. (Often, what might otherwise be called waste becomes valuable feedstock for successive usage steps.) Indeed, tight component and product cycles of use and reuse, aided by product design, help define the concept of a circular economy and distinguish it from recycling, which loses large amounts of embedded energy and labor.

Moreover, a circular system introduces a strict differentiation between a product’s consumable and durable components. Manufacturers in a traditional economy often don’t distinguish between the two. In a circular economy, the goal for consumables is to use nontoxic and pure components, so they can eventually be returned to the biosphere, where they could have a replenishing effect. The goal for durable components (metals and most plastics, for instance) is to reuse or upgrade them for other productive applications through as many cycles as possible. This approach contrasts sharply with the mind-set embedded in most of today’s industrial operations, where even the terminology—value chain, supply chain, end user—expresses a linear view.

GreenerComputing has an interview with Jim Hartzfeld of carpet manufacturer Interface's InterfaceRAISE consulting group - Can You Make a Green Product in a Gray Company?.

Sarah Fister Gale: Looking back over your years at Interface, what were some of the most innovative solutions that you found or changes that you made?

Jim Hartzfeld: There are a couple of them that I use a lot working with Interface RAISE clients. The ideas that we bring to them, or the examples, you're not going to use these examples explicitly to help your company. But these are examples of shifts in mindset and new ideas that can pop out -- whether you're an international, a huge food and beverage company, an aerospace company, a home builder, a financial services firm, massive retailer -- these are the same kinds of transitions you can make.

Two of them I mentioned are the most notable for us because they're such a different way of thinking. Several years ago, we came up with a carpet product called Entropy. The basic idea was that our designer -- following the work of Janine Benyus, biomimicry and Dana Baumeister, as well -- started looking out into nature at how nature made a floor. (They) sent their designers out literally as apprentices with journals to observe and just write what they saw, go back to the studio and do the same thing with how they've been designing carpet for 25 years. (What) they came up with couldn't have been more different. I just said, "Well, why is that?"

We started thinking and what we found was we were really plugged deep into the uniformity, conformity, Six Sigma-mindset of making 10,000 carpet tiles exactly the same so you could pull them out of the box and sit them next to each other. The designer came up with a radically simple idea: What if we made every single one different?

As you could imagine, the Six Sigma psychos in our company -- their heads blew off. They just couldn't think about that. It was just so foreign and so outrageous of an idea. But after a few months of tricking equipment into doing it -- because obviously the equipment was made for uniformity -- they came out with a product just to see what would happen.

It hit the bestseller list faster than any product in the history of Interface. We're, by a significant margin, the largest maker of carpet tile in the world. So that just leapt into the marketplace, but that idea and in following that thinking process, got us out of our traditional thinking. New, completely different ideas came to the table. Then, obviously, we had the courage to try something that would really look different compared to anything that we'd ever made before. But it's had a huge impact on our business and a good bit of the rest of the industry has tried to chase that.

SFG: That's an excellent example of changing your mindset but it also shows a lot of commitment from leadership to invest in a radically different, new product. What's the lesson there?

JH: Well, if you look at where you are, and you realize that's substantially different than where you want to be as a company, you've got to have courage to try some radical, different things. It's almost axiomatic that if you don't try something significantly different, you're never going to become something significantly different. It almost goes without saying.

Now part of the magic is making it clear and creating that big gap in people's minds, that driver to change -- big change, big hairy and audacious goals, which is an important part of this whole element. But if you're not willing to be daring, you're just not going to be the innovative leader in the industry.

I'll say some companies apply very appropriately a strategy of a fast follower. They just wait to see what works and they duplicate that as quickly as they can and try to do it more efficiently and at bigger scale. That's a viable business strategy. It just doesn't happen to be Interface's.

SFG: So you said you had a couple of examples. Can you share another one?

JH: Well, another one that's really interesting in its "differentness." And jokingly, some of this is urban legend so some of this inside Interface I'm not sure is 100 percent accurate but its the stories that get around.

This biomimicry thing had been so successful. Somebody had come back from vacation in the Caribbean and said, "How in the world can these geckos climb on the ceiling and we're constantly struggling with getting carpet stuck to the floor? What is up with this?"

So we've been using this nature thing, biomimicry, in this other area at work. Let's try that same thinking process and see what comes out of that, and they did. The short version of the story is that they literally had scientists studying the van der Waals forces on the tips of the hairs on the toes of geckos, understanding how geckos cling to things. And flies' feet: You can't imagine all the stuff a fly's foot actually does for a fly other than just using it to land on something. Feathers: how they stick together. Clams and mollusks, how they can connect to the floor of the bay or whatever. We studied all these different ideas of how nature sticks to things when it wants to pull apart.

What do you in this process is you study those different strategies most of the time with a biologist at the design table. That's the methodology of the biomimicry guild, but what you do is you study these different strategies nature uses and look for an idea that you can take that analogy back to your industrial setting and use that as a new idea to explore. That's what we did with this. How do you get a carpet glued to the floor? We have scientists who have made the greenest glue, we think, that you can buy anywhere.

The idea is we were just pounding that idea of creating the greenest, cleanest, no-VOC glue that you can possibly find on the planet. This started a thinking process that would completely go another direction.

It didn't end up having anything to do with gecko toes but simply a little, three inch-ish square piece of a hard tape with a little bit of adhesive that actually sticks up to the bottom of the carpet tile where the four corners come together. A roll of that stuff completely eliminates a pallet full of glue and buckets and stuff like that.

What we found in that process after we got people trained and used to using it and (increased) the learning curve is we can get carpet installed faster and cheaper than using the old method. When we applied our lifecycle assessment methodology to comparing this process versus the old glue process, it was an 89 percent reduction in environmental impact. And it was faster and cheaper so it is just leaping into the marketplace as an alternative carpet installation strategy when you're putting new (carpet) down, because you've already got some of that nasty glue stuff on the floor (with old carpet). It just works better.

So those are two examples I use where this thinking process leads you into a new place where you just at some point say, "Well, how dumb have I been? Why didn't I think of this 10 years ago?" But it's all around that mindset. ...