From Concept to Practice How Manufacturers Create a Circular Economy in Mechanical Engineering

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Modularly designed machines with separable assemblies and updatable components can be economically returned at the end of their service life, with high-quality parts specifically refurbished. Digitization is the lever to make circularity scalable. For the customer, risks, costs, and investment barriers are reduced.

Sustainability and resource efficiency are key future topics for the industry. However, the implementation of the circular economy in mechanical engineering often falls short of expectations. Many companies commit to ecological responsibility but rarely establish circularity firmly in their business models. Yet mechanical engineering offers enormous potential when circularity is understood as a strategic lever for differentiation, customer loyalty, and profitability, rather than as a sustainability label. The decisive question is no longer whether but how the circular economy is implemented and what role digitalization plays in it.

From Product to Performance: How Machines Become Circular

The principle of the circular economy in mechanical engineering is based on three closely interconnected pillars:

1. Extension of life cycles,
2. Refurbishment of used components,
3. and the transition from product-oriented to usage-oriented business models.

The goal is to operate machines longer and more efficiently while maintaining them with fewer resources. At the end of their lifecycle, components or entire systems can be reclaimed, refurbished, and reintegrated into the production cycle. At the same time, pay-per-use models and subscriptions are increasingly replacing one-time sales. For manufacturers, this creates new revenue opportunities in service, stronger customer loyalty, and differentiation in the market. Operators, in turn, benefit from lower total cost of ownership through reduced downtime, optimized maintenance, and better utilization.

Circularity Begins in Engineering

Circularity is more than a service concept—it originates in engineering. Only modularly constructed machines with separable assemblies and upgradable components can be economically reclaimed at the end of their lifecycle. "Design for Disassembly" is critical for this: those who consider repairability and upgradability in their designs lay the foundation for reclamation and recycling. Equally important is a clear reclamation strategy: instead of returning entire systems, valuable components—such as electronic modules, drives, or hydraulic systems—are specifically refurbished to preserve their value. The prerequisite is transparency about usage, stress, and remaining lifecycle. Digitalization provides this data and makes circular business models manageable.

Machine Connectivity As A Foundation

Digitalization is not the solution alone, but the lever to make circularity scalable. Without machine connectivity, strategies remain theoretical. Networked machines provide the data foundation for new services via secure routers, encrypted connections, and interfaces like OPC UA or MQTT. Edge functions for pre-processing and local buffering create the basis for data-driven services. A high online rate enables early error detection, planned maintenance, and services such as predictive maintenance, remote support, or pay-per-use. Albrecht Bäumer illustrates how profitable this can be: the world market leader for foam cutting machines reduced service times from five minutes to one using the IIoT platform Ixon Cloud and achieved an ROI of 127%.

The real transformation concerns the customer relationship: it no longer ends with delivery but becomes a lasting partnership. Manufacturers take responsibility for efficiency, sustainability, and recyclability, often acting as operators. This creates predictable revenues, strengthens loyalty, and reduces risks, total cost of ownership, and investment barriers for customers—a clear advantage in times of uncertainty and cost pressure.

Spare Parts Strategies And Open Interfaces

Circularity also requires a new service logic. Proprietary interfaces, exclusive spare part supply, or lack of repair information hinder circular models. In contrast, a circular service concept relies on open interfaces, transparent documentation, and spare parts that are compatible across multiple generations. Digitalization supports this approach by providing lifecycle data and enabling services like predictive maintenance or remote support.

Step By Step into the Digital Service World

How to get started? Manufacturers who proceed in a structured manner are successful. The process begins with a clear vision: should digitalization primarily optimize service processes, deepen customer loyalty, or enable new business models? This is followed by a focused use case—such as remote access or automatic alerts—implemented with pilot customers. Such projects create measurable added value and build trust, both internally and externally. In parallel, the machines are technically prepared: interfaces, gateways, and secure platforms form the foundation.

Important is a solution that is multi-tenant, integrable, and built to high security standards. Equally central are interdisciplinary teams that connect engineering, IT, service, and sales, as well as clear rules for data access and role permissions. Once these foundations are established, the solution can be expanded: standards for data points, interfaces, support processes, and onboarding prevent isolated solutions and ensure that digital services do not remain limited to individual projects but are scalable across the entire machine portfolio.

Digitization As the Key to Industrial Circularity

Circular economy in mechanical engineering is not a trend topic but a strategic necessity. It requires a rethinking of design, service, and business models. And it will only succeed if digital technologies are used as a unifying element. Digitalization makes circularity economically viable and scalable. Companies that consistently follow this path benefit in two ways: ecologically through resource conservation and economically through predictable revenues, closer customer relationships, and long-term competitiveness.

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