Evaluation of the Applicability of the Circular Economy and the Product-Service System Model in a Bearing Supplier Company

Abstract

Today, for most applications in industry, the overall goal of manufacturers and users is to completely rethink and improve reliability and sustainability. In relation to the performance of rotating equipment, examples of ongoing trends and related activities driven by major machine manufacturers include, among other things, saving resources by extending the service life and intervals of individual components on machines, increasing use of the minimum amount of lubrication and the growing focus on reusing, retrofitting and upgrading equipment. The purpose of this work is to evaluate the Circular Economy model of a bearing manufacturing company (Product as a Service: SKF Rotation for Life) using the ReSOLVE framework and five sustainability factors for PSS (Product-Service System) business models. Through the data obtained in the case study, it is possible to observe the link that exists between the models of the Circular Economy and PSS and how, through the reconditioning of bearings as one of the key strategies to achieve a Circular Economy, to reduce, reuse and recycle material, the company can provide services rather than products, focusing on optimizing asset performance and helping to improve the sustainable performance of industrial equipment.

1. Introduction

Since the Industrial Revolution, companies and consumers have largely adhered to a linear “extract–produce–discard” value creation model. Resources are acquired, processed using energy and labor, and sold as goods with the expectation that customers will discard these goods and buy more aligned to the product obsolescence plan [1]. Organizations need to discuss alternatives to minimize the negative impacts on environmental and social aspects [2,3,4,5,6]. It is necessary to modify the traditional system of linear production and create new circular models.

In this sense, the concept of the Circular Economy proposes that the value of the resources we extract and produce be kept in circulation through intentional and integrated production chains. The idea of this model is to eliminate the concept of garbage itself: seeing each material within a cyclical flow, enabling its trajectory “from the cradle to the cradle”, “from product to product”, preserving and transmitting its value [7,8,9,10,11]. Thus, economic growth is dissociated from the increasing consumption of new resources, thus enabling the intelligent use of available resources that are in use in the production process.

Possible paths are being explored worldwide in the transition from linear to Circular Economy (CE) business models, finally decoupling economic growth from environmental losses [12].

The Ellen MacArthur Foundation [13] provided principles of the Circular Economy for business models, offering companies and governments a tool to generate circular strategies and growth initiatives, with the extension of the useful life of products and changes in the use of finite resources for renewables. The concern of companies and governments with regard to the conscious use of natural resources and the implications of their irrational use is in evidence as never before. With this, several models and new practices have been developed to help organizations implement circular products and processes.

There are different business models applied to circularity, which range from proposals of different types of models to practices and tools of circular business models [14,15,16,17,18]. Among them, there is the ReSOLVE framework. It is an accessible business model that is easily applied in different organizational contexts. The ReSOLVE model was designed to help companies identify a set of six actions that companies can perform to make the transition to a Circular Economy [19].

This framework allows companies to establish an overview of the possibilities and map potential Circular Economy opportunities in all their sectors. Since it is one of the most frequently used, the framework organizes the principles of circularity and applies them through six fundamental actions: Regenerate, Share, Optimize, Loop, Virtualize and Exchange [20]. Studies have used the ReSOLVE structure to assess whether organizations were building circular business models, such as the textile industry [21], digital technology companies [22], the construction and demolition sector [23], supply management [24], social communities [25], “fintech” companies [26] and member states of the European Union [27].

Thus, the objective of this study is to present an analytical approach of the business model applied in a bearing manufacturer industry, SKF (São Paulo, Brazil) [28] and to verify its adherence to the precepts of the Circular Economy, as well as the practical observation of viability in its application through the ReSOLVE framework, and adherence to the product-service system model, using the model proposed by Barquet et al. as a reference [29].

In addition to this introduction, this article presents four more sections. Section 2 is dedicated to the presentation of the necessary concepts to evaluate the business model of the company under study with reference to the ReSOLVE framework and the PSS model. Section 3 presents the method used in the SKF company, which is the company object of the case study. Section 4 is dedicated to the presentation of the results and main characteristics of the SKF model compared to the ReSOLVE and PSS models. Finally, Section 5 is dedicated to conclusions and final considerations.

2. Background

2.1. Circular Economy

Linear economics is an organizational model where the supply chain is only concerned with extracting finite resources from nature and is defined and based on the use and practice of “extracting–producing–discarding”. This model does not plan the destination of the products at the end of their life cycle, which leads to difficulty in separating the waste consumed. Many authors declare that the linear economy is an imminent risk, due to the increasing depletion of raw materials and the increasing costs of extraction. The linear process at one end reduces the finite natural resources and generates an unprecedented volume of unused waste at the other that is potentially toxic to humans and the ecosystems they contaminate [30,31].

In turn, the Circular Economy brings operational and strategic benefits, in addition to an enormous potential for innovation, job creation and economic growth. One of the precepts of the Circular Economy is to keep existing products, their components and materials in circulation, taking advantage of their maximum value and their usefulness through the distinction between technical and biological cycles. In addition to the recycling process, the Circular Economy also includes the creation of repair, reuse and remanufacturing systems, in addition to effective recycling in which raw materials maintain or even increase their value.

The Circular Economy requires innovations for change in industrial processes, in the consumption of the final product and in the legislation that governs it. Thus, environmental innovation or eco-innovation evolves over time. This chronological evolution is due to the increased complexity and dynamism of the economy and markets [32].

2.2. Business Models Applied to the Circular Economy

In the article entitled National Capitalism [33], the authors state that business strategies built around the use of natural resources solve many problems and profitably. McDonough and Braungart [34], in the book Cradle to Cradle, suggested that industry should preserve and enrich the ecosystems of nature, maintaining the circulation of organic and technical nutrients. For companies to be successful with the application of the Circular Economy, industries and economies have to adapt because innovation in the entire system and all current business models is necessary [35]. The commercialization of new ideas and technologies by companies is performed through their business models [36].

Innovations and disruptive business models are needed to face current challenges and move toward Circular Economy models [37]. Thus, sustainable business models aim to accelerate the transition from theory to practice, including maximizing materials and energy efficiency, creating value from waste, replacing materials with renewable and natural materials, providing functionality to rather than ownership to users and thus developing solutions at scale [38], in addition to engagement with customers and stakeholders [39].

According to the World Business Council for Sustainable Development (WBCSD), led by CEOs of more than 200 of the main sustainable companies in the world, published through the reports of the CEO guides The future of business is circular, 2019 [40] and GLOBAL RESOURCES OUTLOOK—Natural Resources for the Future We Want, 2019 [41], companies moving to circular business models can capture significant benefits, including the following:

• increased growth with job creation;
• innovation and competitive advantages;
• cost reductions;
• reduction in energy consumption and CO₂ emissions;
• increased supply chain and greater security in relation to resources.

Accenture [42] identified five business models and ten technologies that will help in the implementation of the Circular Economy. They include the use of renewable energy and biobased or fully recyclable inputs, resource recovery, extension of product life cycles, and sharing and replacement of products by services, supported by digital, physical and biological technologies.

2.3. Remanufacturing

There are different definitions for the term remanufacturing. The Automotive Parts Rebuilders Association (APRA) defines remanufacturing as the “process of restoring worn and discarded durable products to a new condition.” [43].

APRA also states that the remanufacturing industry helps the environment in several different ways:

(a)

Energy Conservation: The automotive and truck parts are kept out of the remelting process for longer due to remanufacturing. As a result, millions of barrels of oil or comparable forms of energy are saved.

(b)

Conservation of raw material: Remanufacturing gives the product numerous lives, instead of just one, thus saving raw materials. Remanufacturers save millions of tons of natural resources, such as iron, aluminum and copper, annually.

(c)

Landfill Conservation: Landfills are spared from the disposal of millions of tons of iron, aluminum, copper, etc., due to the monetary value that the industry attributes to the parties. This “central load” ensures that the parts are returned to be reconditioned.

(d)

Reduction of Air Pollution: Once again, keeping the parts out of the cooling process benefits the environment, reducing air pollution that is generated by remelting.

According to the NBR ABNT 16290: 2014 standard [44] (Reprocessed goods—General requirements), a good can be considered remanufactured when it comes from an industrial process performed by the original manufacturer of the new product, by a company belonging to the same corporate group or by a company specifically authorized by the original manufacturer. This process involves:

(a)

The disassembly of used products to the extent necessary to perform actions that allow determining the state of conservation and ensuring the performance of its components, parts and pieces;

(b)

The replacement of critical and/or worn components by new or remanufactured components, so that the resulting remanufactured good presents conditions of operation and performance according to the specifications of the original new good or higher than these, including in terms of guarantee;

(c)

Compliance with all regulations and technical standards applicable to new goods intended for the same purpose.

Still in relation to the NBR ABNT 16290: 2014 standard [44]:

(a)

The remanufactured good must have traceability conditions;

(b)

It must receive indelible identification, making its remanufactured condition clear;

(c)

The packaging of the good, if any, should receive a label that identifies it as remanufactured;

(d)

It must be accompanied by the instruction manual in Portuguese, or corresponding documentation, whenever the current legislation applicable to new goods destined for the same purpose so requires.

Remanufacturing is a process of bringing used products to a "like new" functional state, rebuilding and replacing their components. The practice has a low profile in global economies; however, studies indicate that it achieves cost savings in the range of 20% to 80%, as well as quality similar to that of an equivalent “new” product [45]. The process includes sorting, inspection, disassembly, cleaning, reprocessing and reassembly, and parts that cannot be returned to their original quality are replaced, which means that the final remanufactured product is a combination of new and reused parts. With the increase in the life cycle of a product through remanufacturing, a profit can be obtained when this remanufactured product is subsequently sold.

Considering the different factors involved, it is concluded that remanufacturing may be the best strategy. This is because it allows the incorporated energy of virgin production to be maintained, preserves the intrinsic “added value” of the product for the manufacturer and allows the resulting products to be sold “as new” with updated resources, if necessary. A remanufactured good, in relation to end-of-life strategies, is superior to a repaired or refurbished good because the final result of a remanufactured good is also higher quality, making it more commercially viable [46].

2.4. The ReSOLVE Framework

The ReSOLVE framework was designed to help companies identify a set of six actions that companies can perform to make the transition to a Circular Economy: Regenerate, Share, Optimize, Loop, Virtualize and Exchange [19].

Actions of the ReSOLVE model:

(a)

Regenerate: Change to renewable energy and materials; recover, retain and regenerate the health of ecosystems; and return biological resources to the biosphere. For example, the promotion of the Savory Institute in comprehensive land management has influenced the regeneration of more than 2.5 million hectares of commercial land worldwide.

(b)

Share: Maximize product use by sharing private ownership of products or public sharing of product pools; reuse them throughout their technical life; and prolong life expectancy through maintenance, repair and durability design. Examples include car and home-sharing business models.

(c)

Optimize: Improve product performance and efficiency; remove waste from their supply chains; and leverage Big Data, automation and remote sensing. None of these actions requires changing products or technologies.

(d)

Loop: Keep components and materials in closed loops and prioritize the internal ones. For finite materials, this means remanufacturing products or components and (as a last resort) recycling materials, such as those from the company that produced it and those that have been developed. Renewable materials involve anaerobic digestion and the extraction of biochemicals from organic waste. In the UK, 146 anaerobic digestion plants treat 66 percent of sewage sludge, and an additional 175 plants produce bioenergy from solid waste, a number that is growing rapidly.

(e)

Virtualize: Deliver utility virtually: books or music, online shopping, fleets of autonomous vehicles and virtual offices.

(f)

Exchange: Replace old materials with advanced renewables; apply new technologies, such as 3-D printing and electric motors.

2.5. The SKF Model

The SKF model [28] promotes the reduction of the carbon footprint: the amount of CO₂ that ceases to be emitted due to a new bearing. The conversion rate is 1.7 CO₂ for each kg of bearing that is remanufactured. Example: A remanufactured 10 kg bearing ceases to emit 17 kg of CO₂ into the environment.

The SKF model includes the seven steps described below in Figure 1.

• Asset: All customer equipment related to the operation being performed that SKF monitors. Example: papermaking operation, where there are several types of equipment, such as reducers, electric motors, pumps, boilers, water treatment, etc.
• Lubrication: This is the first step to be verified because it is a RecondOil system that, through a physical chemical process patented by SKF, can recover the oil and filter the oil to a particular nano size, removing all impurities, thereby never requiring oil change, only level replacement.
• Remote monitoring: All SKF sensors monitor all equipment in the facility and send the data to the next phase of the model, which is Data Analysis. All monitoring data go to the SKF cloud.
• Data analysis: The information that arrives in the cloud is manipulated by artificial intelligence/algorithms or by people. With the analysis, it is possible to diagnose the health of the assets.
• Re-engineering: With data analyzed from the previous step, some engineering intervention may be necessary to make any improvement or upgrade of the equipment. This re-engineering is done in the assets monitored by SKF. This step is performed when it is identified through monitoring that the useful life of the equipment is below the expected and/or below the customer's need. Thus, the mean time between failures and the useful life of the asset is increased until the next intervention.
• Remanufacturing: This is the remanufacturing process where only some components of the operation assets that are monitored in step 3 are remanufactured, with or without an engineering upgrade in the previous step (bearing, bearing and reducers).
• Supply Chain 4.0: With all the monitoring data, one can reduce the stocks of material to meet the replacement process components that are used in step 6 of remanufacturing and/or items that the customer uses in the operation (example: electric motor).

2.6. Product-Service System

The concept of the PSS (Product-Service System) originated in the 1990s in northern Europe as follows: “the product is a tangible offer, a good manufactured to be sold”; second, “the service is an intangible offer, in which an activity is performed without the need for a tangible good from then on an approach focused on industrial ecology centered on the concept of selling performance instead of selling goods” [47].

For Pereira [48], the need to combine products and services initially emerged as a way to create entry barriers to new competitors and increase the customer portfolio with new products, but without much differentiation in their manufacturing.

According to Borchard, Sellitto and Pereira [49], the PSS originated in environmental sustainability, from the intensive use of products, offering solutions to ensure the maximization of physical resources and thus resulting in greater use of resources. According to Tukker [50], the PSS has great potential for the inclusion of sustainable requirements, which can be included in all phases of the project. The author also states that simple PSS applications may not have an automatic or significant result in relation to sustainability. For this purpose, a thorough analysis must be performed on a case-by-case basis.

The PSS model is characterized by the change of focus from physical products to an integrated system that aims to offer solutions to consumers [51]. According to [52], traditional services such as after sales and guarantees are no longer sufficient because all companies offer services to varying degrees, and it becomes increasingly important to proactively address service strategy.

Vandermerwe and Rada [53] were some of the first to define the term servitization as the strategy of “offering an integrated package of products, services, knowledge and customer support in order to add value to the main business of the company”. Conversely, servitization is defined as the progress of an offer of a material good to a style in which the material component is inseparable from the services [54].

In general, based on the arguments found in the literature, we can say that PSS methods and tools can be applied in various product development process (PDP) models, from the strategic planning phase of the product to its discontinuity in the market for the parallel development of products and services. Thus, the PSS is a competitive opportunity for organizations that becomes important for changes in the consumption patterns of the population.

According to [50], PSS types are in a transition between “pure product” and “pure service”. The pure product limit represents the situation of the traditional model of production and sale of goods tangible, where there is a transfer of ownership of the product to the customer. Conversely, the pure service limit consists of the exclusive supply of services. The author states that the divisions are not rigidly defined and may encompass more services or more products:

(a)

Product-oriented: sale of products, but some services can be added, increasing the value to the customer. Some services are provided to ensure the functionality and durability of the product.

(b)

Use-oriented: sale of products, since ownership of the good is not transferred to the customer. The product is made available to the customer in several ways, which pays for its use. This business model can lead to negative effects such as incorrect use and decreased durability.

(c)

Result-oriented: the customer and the supplier agree on a final result and there is no predefined product. It consists of the sale of a result or competence. Thus, the PSS provider also retains ownership of the product, being paid for the solution provided.

2.7. Advantages and Barriers of the Product-Service System

The generation of value for the customer is certainly the fundamental and decisive point to drive the decision to purchase a PSS. The concept of a product-service system can improve the positioning of the company in the value chain if the PSS includes elements with a higher profit margin or creates a unique and customized relationship that cannot be copied by competitors [55].

According to [50], the main advantages of a PSS are as follows: to offer customers integrated and customized solutions so that they can adhere to their main activities; build a long-term relationship with customers, favoring loyalty; provide more speed in innovation because the focus is to meet the needs of customers through solutions; and decrease the environmental impact of products and the costs involved in their entire cycle of life.

According to [56,57], the main contributions of the PSS are as follows:

(a)

Provide strategic market opportunities for traditional producers and improve the total value for the consumer by increasing service elements;

(b)

Benefit the environment, since the producer becomes more responsible for his product services through activities of return, recycling and renewal of the product, reducing the waste for the life of the product;

(c)

Deliver the same or improved product with higher value in use, using less energy or material, reducing costs and environmental impacts.

The implementation of a PSS has barriers that can be overcome with the aid of government policies and the development of operational techniques. Among the barriers, according to the cited authors, is the stimulus for the transition from the traditional economic model to a model with significant systemic changes [58].

Souza et al. [59] mention that in the strategic area, one of the benefits of servitization is to provide a differentiation of the company’s offer in the market, especially in the case of “commoditized” products, where customers differentiate their competitors based on the offer of services associated with the product. In addition, servitization creates entry barriers for competitors because, when a company expands its service coverage capacity, it becomes more difficult for a new entrant in the market to provide the same assistance quickly and to the same extent.

As barriers to the adoption of a PSS, the following are observed: consumers do not see benefits; difficulties in the design of a PSS, resulting from the traditional approach and training of designers; lack of regulatory aspects; and the culture of “having” [56].

2.8. Sustainability Measurement in PSSs

Despite the importance of the subject and the benefits that the PSS business model can produce, there are few models available to be applied and verify the aspects of sustainability in all its dimensions. The approach of most of the proposed models focuses basically on environmental aspects. According to authors, the applicability of PSS models needs to be better explored by academic research, highlighting the differences between traditional product and product-service business models.

In this sense, some of the models available to evaluate sustainability actions are presented by Lee et al. [5], Hu et al. [11], Barquet et al. [29], Chen et al. [60], Abramovici et al. [61] and Chou, Chen and Conley [62].

The model chosen to be applied in this work is the one developed by Barquet et al. [29] and the reasons for selecting it are: first, because it has specific sustainability factors for PSS business models; second, because it has a simplified method of application through the analysis of factors and subfactors in the three pillars of sustainability, in addition to two other supporting factors linked to innovation and behavioral changes, not requiring simulation software.

Figure 2 presents the sustainability assessment model developed by Barquet et al. [29], which presents five main factors with their respective subfactors. Factors 1, 2 and 4 are the factors directly linked to the sustainability, environmental, economic and social pillars; the other two factors, 3 and 5, are factors also strongly raised in the discussion of sustainable PSSs because they influence the good functioning of the entire system.

• Factor 1: DfE—Design for Environment—aims to minimize the environmental impact of the product and its production throughout its life cycle. This practice is possible due to increased use of the product through sharing or renting, and by prolonging the materials and product lifecycle through the addition of services during the use phase and the application of end-of-life strategies (EOL—End of Life), such as remanufacturing, reusing and recycling.
• Factor 2: Economic value can be obtained mainly in three ways: cost reduction due to material reduction, economic incentives to extend the PSS life cycle and profitability of new services.
• Factor 3: Changes in Behavior: A contribution to environmental sustainability can be achieved by changing the behavior of customers, from ownership of the product to the relevant use of the same. Through this change, the use of resources can be optimized by sharing, collectively using or managing the lifecycle; this optimization of resources can be linked to the concept of dematerialization in the PSS.
• Factor 4: Social well-being, which can be related to several aspects involving consumers, employees, employers and the community. Some of the aspects to be considered are: health and safety of workers; honesty and justice promoting employee satisfaction; generation of new skills, for example, the new types of services that are added to products; satisfying sustainable consumption; improved quality of life; creating jobs and securing existing ones; and promotion of the integration of people, considering minority groups, such as the elderly and the unemployed, generating access possibilities for people with lower incomes.
• Factor 5: Innovation at different levels: A starting point for creating a PSS business model is to establish the objective of achieving an integrated solution, where the interaction of stakeholders and the convergence of their interests are clear, as well as actions to extend life, the usefulness of the products and intensify the overall sum of the use of the products; when the complete system uses less resources, it has a lower overall cost and higher gains, which can be shared among the interested parties.

3. Methods

From the point of view of the research methodology used, this study can be considered to be of the deductive type, as it starts from principles recognized and accepted as true to establish relationships with the analyses that are made. From the point of view of the objectives, it can be said that the work is exploratory. As a technical procedure, the case study within the SKF company is used to identify the presence of the principles of the Circular Economy and its applicability through the ReSOLVE method and meeting the characteristics of a PSS model. For data collection, the semi-structured interview technique was used to obtain the information and identify the degree of adherence or compliance of the SKF model with the Circular Economy precepts and PSS model.

Both the ReSOLVE framework and the Barquet PSS model have been previously used in studies in Brazil. The first model has been applied in a study to assess how industries in the planted tree sector are applying the Circular Economy concept. The second model has been applied for a case study that measures the degree of incorporation of sustainability aspects in electric car sharing.

Company Object of the Study

For the choice of the company to be studied, the operating segment was taken into consideration, with a preferences for the automotive segment, due to its relevance in the region, for producing mass consumer goods, for having a high possibility of interaction with its customers and in the impact that a manufacturing company of this size can cause due to the consumption of natural resources. In addition, the company showed interest in the subject and availability of access to information and communication with researchers. During the debate entitled Building a Circular Economy in Latin America, FIESP/SENAI and WCF-World Circular Economy Forum Online, 2020 [63], a practical application of a circular business model was presented by SKF. Thus, all the justifications were aligned with the objective of this study.

Svenska Kullager Fabriken or SKF (literally, a Swedish Bearing Plant), is a Swedish multinational company, a world leader in the manufacture of bearings, with headquarters in the city of Gothenburg, Sweden. Founded in 1907, since its inception, it has been intensively focused on quality, technical development and marketing. The results of the Group's research and development efforts have led to an increasing number of innovations that have created new standards and new products in the bearing world [28].

It has approximately 90 manufacturing sites distributed throughout the world. Its own sales companies in 130 countries through local sales units and approximately 17.000 distributors and resellers worldwide [28].

The SKF Group is one of the leading global suppliers of products, solutions for customers and services in the bearing and seal industry. The main competencies of the Group include technical support, maintenance services, condition monitoring and training. SKF also has an increasingly important position in the market for linear motion products, as well as high-precision bearings, shafts and shaft services for the machine tool industry, as an established manufacturer of rolling steel [28].

The SKF businesses are divided as follows: four industrial regions, one global automotive business area and six independent and emerging business units. They upply products (bearings, monitoring equipment, lubricants) and services, where some business models, as “Rotation as a Service”, combine products and services under a monthly fee (product as a service) [28].

4. Results

According to the Managing Director—Andean Region, the market is changing, and the sale of services is increasing. The bearing, in this scenario, is increasingly becoming a commodity and the main objective of companies is to sell them at increasingly lower prices. It is not possible to disrupt the product, but it is possible to make a business change. Today there is still no new technology to replace the bearing steel and, consequently, it can be manufactured by any company.

In Figure 3 and Figure 4 below, it is possible to verify the performance impact of the SKF model and the increase in the added value with the customer named TCO—Total Cost Ownership.

Thus, SKF, a pioneer company present in more than 130 countries, is committed to doing business in the most economical, social and responsible way possible.

The objective of using the ReSOLVE framework to assess whether the organization, in this case SKF, had its business model aligned with the Circular Economy was achieved. It was evident that the SKF model is a circular model and includes numerous circular actions that promote the reuse of finite materials, regeneration, cost reduction, optimization and increase of the useful life of the products in an integrated manner with the products—the three pillars of sustainability.

The analysis highlighted how the ReSOLVE structure can support each of the stages of the business model under study (

Table 1. Identification of ReSOLVE actions in relation to the SKF model.

Stage	SKF Model	ReSOLVE
1	Asset	Not applicable
2	Lubrification	Regenerate
3	Remote Monitoring	Optimizing
4	Data analysis	Optimizing
5	Re-engineering	Exchange
6	Remanufacturing	Loop
7	Supply chain 4.0	Optimizing

) and at the same time verify which opportunities can be developed to support other circular practices.

As expected, not all ReSOLVE shares were included in the SKF business model, such as Share and Virtualize. However, important considerations should be analyzed:

• The first action step of the SKF model is lubrication because the Asset step is only a diagnosis made by SKF to identify which equipment is monitored;
• The lubrification step is directly linked to the action of Regenerate with the SKF RecondOil system, which, through a physical chemical process, recovers and filters the oil, removing all impurities and bringing it to its functional form. This avoids premature equipment failures, reduction in maintenance costs and, in addition to drastically reducing the replacement of new oil, does not use valuable and nonrenewable resources in nature;
• Remote monitoring is an optimizing action; with sensors installed in the equipment and the artificial intelligence system for data analysis with this information, it is possible to optimize the products in operation according to the customer's needs and increase the useful life of the product;
• The data analysis with the artificial intelligence system optimizes both the process of product upgrades and the speed and accuracy of the information. Based on the data obtained from the previous step, some engineering intervention may be necessary for some improvement or upgrade of the equipment. This step is performed when it is identified that the useful life of the equipment is below expected and/or below the customer's need.
• The action of Exchange is performed by replacing old materials with advanced renewables and applying new technologies, thereby increasing the average time between failures and the useful life of the asset until the next intervention. In this stage of the model, the action of virtualization can be evidenced, since the SKF digital twin system combines advanced methods of dynamic simulation with analytical models to achieve agreement between simulation and physical reality.
• Remanufacturing can be defined as a process of loop action, i.e., the materials that have suffered wear are replaced and the remanufactured product has the same characteristics and quality as a new product. In this step, the recirculation of the materials in closed-loop loops is evident.
• Supply chain 4.0 is a process aligned with the action of Optimizing, avoiding obsolescence in inventories. Cost reductions occur due to the amount of assets in circulation because, with the information from the monitoring and data analysis step, one can reduce inventories of material to meet the component replacement process and the number of items used in the remanufacturing step.

As mentioned, not all ReSOLVE shares were included in the SKF business model. The action of sharing products or components was not identified in any of the stages. However, it can be assumed that the sharing of information obtained in the monitoring and data analysis stages is a form of circularity.

It was also possible to identify that, in different ways, all these actions of both ReSOLVE and the SKF model increase the use of physical assets, prolong their life expectancy and help change the use of finite resources into renewable resources, in addition to increasing profitability. Therefore, it is possible to identify that the Remanufacturing stage (SKF Model) has the best potential for profitability in the area of operation.

However, specifically in step 2 (Lubrification—SKF Model), the RecondOil System, after a more detailed analysis by the authors, presents itself not only as a regeneration process according to the ReSOLVE structure, but also as an innovation theme aligned with sustainability, with high potential for profitability, as viable methods to reuse oil were not available until then.

The SKF RecondOil system is a dual separation technology that not only contributes to a more sustainable industry, but reduces costs and increases performance. This system is known as DST (Double Separation Technology) and consists of a chemical process and mechanical separation, especially in nanoparticles. The RecondOil system not only removes contaminants, but also prevents oxidation, keeping the oil with its original properties, preventing its degradation, avoiding the need for disposal and providing circularity to the use of the oil [28].

It is important to mention that according to CONAMA [64], all used or contaminated lubricating oil must be collected and disposed of in a way that does not negatively affect the environment and provides maximum recovery of its constituents. Manufacturers and importers are obliged to collect, or guarantee the cost of the entire collection, of all available, used or contaminated lubricating oil, according to goals established by the Brazilian Ministry of the Environment (MMA) and Brazilian Ministry of Mines and Energy (MME).

SKF traditionally belongs to the manufacturing industry segment and adopts common product-oriented practices. However, as also explained by the Managing Director—Andean Region, the market is changing and SKF realized that, to deal with market forces, adopting the provision of services associated with products provides greater profits compared to the sale of products alone, in addition to an opportunity for survival and, in many cases, differentiation in the market.

The analysis highlighted that the SKF model is also based on the PSS concept, that is, it is a competitive model of products and services, whose objective is to meet customer needs and have a low environmental impact compared to traditional business models. Thus, following Barquet et al. [29], its five impact factors, as well as its 18 descriptors for PSS business models, are used to evaluate the SKF model (

Table 2. Analysis of the sustainability factors of the PSS model in relation to the SKF model.

Stage	Model SKF	Sustainability Factors
1	Asset	Change in behavior/Economic value
2	Lubrification	Not Applicable
3	Remote Monitoring	Economic value
4	Data analysis	Not Applicable
5	Re-engineering	Design for the environment
6	Remanufacturing	Economic value
7	Supply chain 4.0	Multilevel innovation

).

As with the ReSOLVE framework, not all sustainability factors for the PSS model were included in the SKF business model. However, important considerations should be analyzed:

The Asset stage, by means of a diagnosis made by SKF together with the customer, is a major contribution to sustainability, due to behavioral change involving a change in the customer’s thinking about product ownership. The same is characterized by the economic value involved among the stakeholders due to the reduction seen in the TCO—total cost ownership (Figure 3).

Similar to the Asset stage, the Remote Monitoring and Remanufacturing stages are characterized by Economic Value, which provides a reduction in costs and an increase in the life cycle of products with the remanufacturing process.

Re-engineering, whose main objective is to improve product performance, increases the service life and minimizes the environmental impact, whether through the exchange of old materials for advanced renewables or the application of new technologies, characterizing Design for the Environment.

Finally, the Supply Chain 4.0 stage is a multilevel innovation linked to the entire supply chain; it is an integrated solution where the overall cost is lower with the optimization of the use of materials and the greater gains are shared among the stakeholders.

As mentioned, not all sustainability factors were directly addressed in the lubrication and data analysis stages. However, lubrication indirectly impacts the economic value involved and, through data analysis, provides more assertiveness to products’ design for the environment.

5. Conclusions

Based on the analyses performed, it can be stated that, although the business model of the studied company does not meet all the reference criteria for the application of the Circular Economy concepts and the product-service system model, the model practiced by the company shows commitment to implement these practices, which are at an advanced stage and with possibilities for improvement, especially with regard to social welfare applied in the community, within the PSS model, and the sharing of products or components in their entirety, to meet the first cycle of the Circular Economy.

It was possible to conclude that the DST System is a PSS business model offered to other companies, making it possible to help them on the transition path from a linear to a circular oil economy, making them more sustainable. It was possible to verify the company's know-how as a key element for the design of new technologies. The DST System needs basic monitoring processes, data collection, analysis and for the circular use of the product.

The analyzed model, in general, has as its main objective the control of cost reductions that are directly linked to the production or activity of the company, as they are responsible for its profitability. However, it can be identified that even though remanufacturing is the process statistically with the highest profit potential for the company, taking into account its activity, another action was identified with the same profit potential as the previous one through Regeneration with the DST system.

The analyzed models, ReSOLVE and PSS, aim at continuous improvement, minimizing the negative effects with the reduction of costs from the regenerative point of view of the Circular Economy; it is necessary that the models work in parallel to optimize the positive effects, aiming to create abundance as intentionality.

Regarding the pillars of sustainability, the model analyzed does not directly show actions related to the social pillar; however, in the case study, it was possible to verify the positive contributions to communities, in which SKF operates through its program called SKF Care.

The contribution of this study is mainly to show through a real case study how the precepts of the Circular Economy can be linked to the PSS model, producing benefits for a company attending to the triple bottom line approach, and can be used by researchers and companies as a reference to be applied in their own contexts and research.

The limitation of this study refers to the analysis of only one type of product of the company (bearings) and the application of two specific models (ReSOLVE, PSS) to verify the applicability of the principles of the Circular Economy in a specific program (RecondOil).