Consulting Project: BSH Hausgeräte

Project Title: Design of a Business Model for BSH Household Appliances in the Context of the EU Circular Economy Debate

This project is assigned by BSH Hausgeräte to a consulting team of 5 participants within the Diploma in Sustainable Business program. The project timeline includes the period of October 2015-June 2016.

Background

Today, over two thirds of Waste Electrical Electronic Equipment (WEEE) are not returned and recycled in the official channels of the producers. Especially for large household appliances (e.g. washing machines, tumble dryers, ovens etc.) which cover a high secondary raw material potential (steel, aluminum, copper etc.) the number of appliances which are directly returned to BSH is extremely low.

The European Commission will present an ambitious circular economy strategy in late 2015. The new strategy will include new legislative proposals on waste targets moving towards a circular economy. BSH expects that the EU COM will use the Ecodesign Directive (2009/125/EU) to ask for improvements in product design and business models to facilitate a “closing of the loop” for household appliances. This brings clearly into focus that WEEE (Waste Electrical Electronic Equipment) is considered as a valuable resource delivering high quality secondary raw materials directly to BSH.

Moreover BSH assumes that it would be interesting to look at new business models for a circular economy in particular with regard to product durability, different use phases, smart applications, leasing versus owning or the management of energy supplies, e.g. smart grid.

Overall goal

The goal of this project is to prepare BSH for the actions to be taken in the context of the EU Circular Economy Package. The following questions should be answered:

  • What does an efficient “closed loop model” for large BSH household appliances look like?
  • What does an efficient reverse logistics concept for large BSH appliances look like?
  • What does a business model look like that allows BSH to get back its own appliances at the end of the use-phase?
  • What business models support new concepts during the use phase, in particular with regard to smart grid applications, different use concepts and different customer behavior?
  • What is the impact of product durability? Will durability be an important issue?
  • What are the opportunities and risks for BSH related to this/these new business model (s)?

Project objectives

BSH seeks to understand the connection between circular economy driven eco-design measures, asking for further analyses of material efficiency aspects in products (e.g. durability, reparability, recyclability, recycled content), and a related new BSH business model (e.g. leasing, rent, home connect, smart grid, different use concepts etc.).

  • Analysis and design of an alternative business model for large household appliances. The proposed business model should enable BSH to take back and recycle, refurbish or remanufacture its own appliances individually.
  • Analysis of customers’ behavior in order to find out under what circumstances they would be willing to give back the appliances directly to BSH.
  • Design and analysis of costs related to a BSH reverse logistics system.
  • Analysis and design of an alternative business model for large household appliances. The proposed model should give BSH an insight about the impact of customers` attitudes, when smart technologies, smart grid applications as well as new business models like leasing concepts are offered. The proposed model should give BSH a competitive advantage as a pioneer of sustainable products.

Project activities

  • Interviews with BSH internal (Marketing, Logistics, etc.) and external stakeholders (Customers)
  • Workshop with internal key stakeholders
  • Literature search and best-practice benchmarking information / documents provided by BSH