Value Retention - Insight from David Parker
As part of our communications on the topic of Value Retention, we decided it would be incredibly useful to share input from the experts on our team. In this article, the knowledge transfer is from David Parker, Circular Economy Specialist. With 17 years consulting experience at Oakdene Hollins, a background in Chemical Engineering and expertise on remanufacturing - David has a deep knowledge of the application of the Value Retention framework. The following questions, and (crucially) responses, draw out his background, expertise and inform us on the origin and application of Value Retention.
Why did you initially gravitate towards sustainability?
More by luck than judgement! After doing my MBA, I was in no rush to get back into work, so had time to consider a wide range of opportunities. I was attracted to a very small advert in New Scientist reaching out to people in the environmental area with the hook of working to manage a (former) DTI-funded programme in the offing. One of my objectives had been to try and move further up the policy, technical and R&D supply chain, so to speak, so this seemed an interesting way in.
How long have you been in the Circular Economy?
If you think that Circular Economy (CE) is just an amalgamation of component tactics to reduce negative impacts but still make money, then I guess ever since I started at Oakdene Hollins. In those days, recycling was as about as advanced as it got in public policy terms, but it was still getting off the ground via WRAP and the like. A fine feature of Oakdene Hollins has been the restlessness to think about what next, where the new frontiers for technical, social and organisational challenge might be with respect to environmental issues. It seemed to us that recycling wasn’t good enough and better value lay in treatment of products. A few lone voices – such as Walter Stahel – had been touting for the Performance Economy, but few in the UK, so there seemed to be an opportunity there, specifically to look at remanufacturing.
Now, of course, remanufacturing is seen as a central loop in CE and interest in it has expanded hugely since we started on it.
How long have you worked for Oakdene Hollins?
Something over 30,000 hours! In elapsed time, since 2001. It’s apocryphal that it takes 10,000 hours to master a skill such as a musical instrument – a muscle memory skill – so I hope the same is true of knowledge matters too.
What is your expertise?
As a particular aspect of CE, I would have to say remanufacturing: it’s where I started and what I keep coming back to, particularly now that it’s gaining some traction. My particular interest is in joining up the components of policy, processes and technologies to build a strong, coherent platform for future growth. I’m also interested in – generally – how systems and supply chains will have to be re-engineered to cope with the Circular Economy.
In this line of work, I’m fortunate that my chemical engineering background has made this transition relatively painless. Chemical engineering requires systems thinking, so a lot of the underlying techniques of CE involving materials and energy flows and inventories are second nature. This has also given me a good platform in modelling.
What’s the history behind the term ‘Value Retention’ from your perspective? When did you first hear the term ‘Value Retention’ and in what context?
I first heard the term Value Retention (VR) presented as a coherent concept in around March 2017 at an event held in Brussels, hosted by The Commission and the UN Environment Programme International Resource Panel. I was invited to facilitate a couple of sessions on remanufacturing, but a key part of the event was a presentation by my old friend professor Nabil Nasr on the progress of his UNEP-IRP report into Value Retention Processes (VRPs). VRP is a term which seems to have originated in the US as an alternative to CE – or at least a concentration on the core inner product-related loops of re-use through repair to remanufacture. Nabil’s report, which has been some time in the crafting, is widely available and well worth reading because it maps out the product re-use territory well, evaluates material and energy benefits and lays out the challenges facing expansion. It has become a cornerstone for international engagement on the subject.
What does ‘Value Retention’ mean to you?
For me, the roots of VR are in the product domain. However, with careful adaptation and differentiation, the term can be used to engage businesses especially in the core aspects of the Circular Economy over which they have immediate control. It is a nice way to unpick the conventional butterfly diagram and present both Product Value Retention (re-use through remanufacture) and Material Value Retention (recycling, re-compounding and refining) in a highly communicable way. This is at the centre of Oakdene Hollins’ approach to identifying valuable CE opportunities for clients in a way they can easily visualise.
How have you, and Oakdene Hollins, used ‘Value Retention’ framework to support clients?
Because of the standing of Nabil Nasr and the UNEP International Resource Panel, the VRP report has a lot of credibility, particularly at the governmental level. It has been really helpful in standardising the terminology, always helpful at the start of change journeys such as this, and so setting out a framework for breaking the challenges associated with value retention into smaller and – hopefully – more manageable chunks. A big success of our familiarity with VR has been our recent engagement by Environment and Climate Change Canada (ECCC) to undertake an investigation of VRPs in Canada to inform this aspect of their CE policy. The project is quite a way down the track (you can read progress here) and is entering its final phase of developing policy options to support VRPs. These options have to be compatible with various other initiatives in CE as well as the Canadian plastics strategy.
Although our work focuses on VRPs, we need to be honest and realistic where we think other tactics such as in the Material Value Retention bundle might have more value or be easier to implement in the short term.
How do you think Value Retention will evolve?
Canada has been a challenging project because it is the first one we know of which has investigated and differentiated the whole range of product life retention and extension options, not just remanufacturing. It’s absolutely necessary, though, because there can’t be a single solution for the vast range of sectors and products in the world. As a result, and because ECCC need to understand which, how and where to support sectors, we’ve been able to refine our thinking. For example, we’ve driven below the surface to identify sector-based (or product-based for complex sectors) approaches which lay out the types of challenge being faced. This then makes it easier to identify supporting approaches.
I expect our toolkit to expand further in both Product and Material VR loops. Our aim is to make it easy for businesses to identify and understand the challenges and opportunities of VR, but go beyond that with tools to implement it. This might involve some radical restructuring of sourcing, supply chains and customer engagement.
Applying Value Retention, notably remanufacturing, has a critical role in furthering the Circular Economy in a range of industries. Whether driving CE from a public or private perspective, contact David to better understand which Value Retention processes can be best leveraged to address your challenges. David can be reached via david.parker@oakdenehollins.com, or by calling 01296 423915 ext. 113.