Accelerate & Transform
Returns and repairs are pure cost
Where is the margin in what comes back?
Where is the margin in what comes back?
What comes back is booked as a loss. The return, the repair under warranty, the product at end of lease, the unsold stock, the component scrapped because the new version arrived. Each has its own cost centre, its own process and its own manager. The revenue line does not exist. The company buys virgin material at the front of the chain and pays to dispose of the same material at the back. The two invoices do not meet on the same page.
The regulation is arriving regardless: product passports, repairability requirements, take-back obligations, each treated as a compliance project. Meanwhile a competitor has started selling the product as a service, a start-up is refurbishing your returns and selling them under its own brand. The customers who asked for a repair option have gone to whoever offered it. Circle Economy sizes the circularity gap at twenty-five trillion euros a year at world level; in the company it has no size at all, because it is not measured.
Whether what comes back is a cost to minimise or a stream to design.
That is a business model decision before it is a sustainability one. A take-back scheme, a refurbished range, a per-use model, remanufactured components sold as such: each changes who owns the product and when, how revenue is recognised, what procurement buys and from whom. The decision is which loops to build, in what order, with which partners and at what return, then which to leave alone because the economics are not there. Without that decision the company runs the loops anyway, for free, for someone else.
The work is Circular Engine Design. It reads the chain from the end of life backwards.
We trace the waste first: every flow of materials, components, products and energy from origin to disposal, with a number on the capital trapped in each linear stream. We count more than the environmental cost: the margin destroyed by assets written off at end of life, the procurement cost of depending on virgin material, the regulatory exposure building in the background. For the Chief Sustainability Officer this turns the narrative into a business case; for the CPO it shows the procurement advantage hiding in recovered material; for a fund it sizes the opportunity before any programme is committed.
Then we design the circular model: the revenue streams from what comes back, product-as-a-service, take-back, refurbishment, remanufacturing, each with its willingness to pay tested on the clients who would buy it, its pricing and its story; the procurement economics redesigned around recovered flows; the operational changes, the partners and the technology each loop needs. Each stream is modelled against the cost structure and the capital available, with its return, its payback and its risk. We do not propose a loop that has no financial logic. For the COO the operational transition is designed alongside, in sequence, with the risk named at each step.
What leaves the room is a circular blueprint tested on the P&L: revenue sized, cost delta quantified, partners and technology mapped, a three-year roadmap with milestones and the capital request ready for the investment committee. The first loop is built with the teams who will run it.
The case below takes a food business whose waste is reported as a percentage and not as a P&L line. We show what changes once the loss is priced at the margin it destroys rather than at the cost of its disposal. The circular engine starts from that number, in any industry.
One third of all food produced globally is lost or wasted every year. 1.3 billion tonnes. USD 1 trillion in economic losses annually. The financial impact of food waste is already in your P&L. Your COO just does not know which line it is on.
ReadPhilippe Bourrat, COO & Co-Founder. Twenty-eight years grounding new models in market realities for industrial and B2B leaders. He holds the demand side of each loop: which client buys a refurbished unit, a per-use contract or a take-back, at what price.
Lucile Olivas, CRO & Co-Founder. Nearly twenty years in purchasing, supply chain, circular economy and aftersales, then an EV-retrofit start-up. She holds the engine: the reverse flows, the remanufacturing economics, the aftersales channel and the operations that turn a return into a revenue.
Physical limits render their verdict through what they allow and forbid. A model that earns from what comes back is a model that has stopped betting against them.
Read the limit in Our Approach: EnvironmentalThe returns you pay to dispose of, the lease fleet coming back next year, the competitor refurbishing your product. Tell us where it binds and we will tell you where to start.