Design and Evaluation of Circular Economy Business for Elevators Based on Scenario Analysis

The design and implementation of circular economy (CE) business in manufacturing companies present significant challenges. Currently, the elevator business model is service-oriented, with most profits from maintenance considering safety and cost. However, resource efficiency is often overlooked. To further reduce the environmental impact while enhancing customer benefits and corporate revenue, transforming existing businesses into CE models is essential. This paper explores new opportunities for CE business by referencing past elevator maintenance data, envisioning future scenarios to achieve improved resource efficiency, and analyzing those scenarios. We employed a three-layered model based on circular ecosystems to illustrate the life cycle, business models, and shared value. To evaluate the integration of product life cycles and business models, we utilized life cycle simulation and developed a CE business evaluation model comprising two sub-models: a maintenance contract market model for selecting maintenance contracts and a product lifecycle model. We compared three scenarios: baseline scenario (current business), improvement scenario (introduction of predictive maintenance), and transformation scenario (adopting a pay-per-use model and transferring elevator ownership to a leasing company) from both environmental and economic perspectives. Results showed that the transformation scenario was potentially the most profitable for all stakeholders while achieving the largest CO2 reduction. Through the case of the elevator industry, this research provides empirical evidence that models maintaining ownership while offering usage can enhance recovery rates and facilitate remanufacturing.