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Lexmark Predicts Connected Future Built on ‘Economy of Use’

The emerging Internet of Things (IoT) space represents one of the most disruptive, yet lucrative, forces in the business world today. Research by McKinsey & Co estimates that IoT technology offers a potential economic impact of $3.9 trillion to $11.1 trillion a year by 2025. At the top end, that level of value would be equivalent to about 11 percent of the world economy.

It is little wonder then that ICT firms are falling over themselves to offer more connected solutions to capitalize on this. One company rapidly evolving beyond its hardware heritage is Lexmark, which recently rebranded to reflect the broader level of technologies and services that now exist under its belt.

Today, Lexmark competes in key markets that include managed print services, intelligent capture and various types of content management. The company’s head of CSR, Sylvie Thomas, told Sustainable Brands this transition is in perfect alignment with another of Lexmark’s strategic goals – the circular economy.

“The arrival of the Cloud and connected objects is in complete convergence with the development of new business models based on the circular economy. Everything we do is from the perspective of economy of use,” she reflects.

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Thomas points out that the circular economy is not a new concept for Lexmark – the company has been adopting such principles since its formation in 1991. Its cartridge and equipment collection and recycling programs have been building year on year to the point where they are now available in more than 60 countries, representing over 90 percent of the company’s global market.

In cartridge terms, this means more than 22 million pounds of material recovered each year for reuse or recycling; for equipment, this equates to more than 6 million pounds of products recovered annually in the US, EU and Canada. During the past 10 years, Lexmark has incorporated more than 40 million pounds of materials recovered through these schemes into the production of new laser cartridges – its goal is to reuse 50 percent of the material, by weight, that is returned.

“When you’re so committed on getting things done the right way – and we are a recycling leader in that respect – then comes the reality of the true cost of this collection recycling program,” Thomas says. “At some stage we had to ask, how can we make this a real investment? That’s where we engaged different stakeholders, from our development teams to the wider supply chain, to rethink things.”

New product developments such as the company’s corporate cartridges, created with up to 90 percent of reused components, are now setting the bar in this respect. Reuse and closed-loop recovery processes are two areas where Lexmark feels it can get best return on investment (ROI) with circularity, particularly through tapping into post-consumer recycled (PCR) content.

“We initially faced some challenges here around consistency and quality, but have since reached an average of 12 percent of PCR plastic in our cartridges and our goal is to increase that amount to 25 percent by 2018,” says Thomas.

Lexmark hopes to build on these achievements further – it recently signed up to the Ellen MacArthur Foundation’s Circular Economy 100 platform. Thomas sees this collaboration as an opportunity for the company to not only participate in high-level discussion and debate, but also to benefit from the learnings of others.

“We have a huge interest in leveraging our engagement with the Foundation,” she says. “It’s not an easy path; we have to learn and embed the strategy into all of our operations. Typically, if you talk about the circular economy to a CEO or sustainability manager, they get it very quickly. But in a company there are other management tiers whose role is to provide short-term ROI. That’s where it becomes tougher to make changes in a fast-moving environment.”

How you foster stakeholder buy-in, both internally and externally, and how you unlock the level of innovation needed – whether through new processes, employee ideas or new partnerships – is where Lexmark feels the Circular Economy 100 group can help. Thomas believes that more open dialogue is needed, and that companies will need to find new ways of engaging with each other pre-competitively to deliver systems change.

“I would say that until quite recently, companies would produce products or create a service, and that was the end. In the future, extended producer responsibility may extend further … and this may see companies having to shift towards a more collaborative approach,” she says.

Thomas feels the circular economy is effectively forcing a new mindset paradigm upon companies – to shift from corporate short-termism to a longer-term vision of sustainable profit.

“If you don't embrace these new business strategies, you won't be able to survive in tomorrow's world,” she maintains.


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