Circular products and services – 2020 sustainability report

Circular products and services introduction

We don’t stop being responsible for our products when we deliver them. Quite the opposite, in fact. Our ongoing efforts to create more innovative, more sustainable and future-proof solutions centre around the product’s entire service life. We focus on both durable products that can be retrofitted and appliances that can be reused and recycled. 

Closing the loop
We aim to keep used materials in the closed-loop system for as long as possible, focusing on recyclingin particular. This means that we recycle used materials such as steel and aluminium. One of the purposes of this is to reuse the recycled material in new products. In addition, we see a huge potential for selling second-hand appliances that are still in full working order. We would like to harness this potential to a greater extent over the coming years. For us, the circular economy also involves critically rethinking our business models. With concepts such as the sharing economy, we are examining how we can provide our customers with our services while offering premium customer care for the long term.

High-quality products for boosting sustainability at home
Far more energy and water are consumed when our appliances are used than when they are manufactured. We are making the most of this lever for a sustainable future by producing appliances that use resources efficiently. We provide features such as EcoManagement to encourage our end customers to use their appliances in an eco-friendly way. Many of our appliances have WiFi connectivity, presenting many opportunities for innovative services. In the future, customers will use an app that gamifies their appliance use, allowing them to compare their scores with others and compete to see who can use electricity and water the most efficiently. 

Better energy efficiency requires new ratings
After 25 years of using the well-known household appliance energy ratings, Switzerland is adopting a new, stricter EU regulation on energy labelling from March 2021. The rescaled system places greater requirements on energy savings, and there is now room to improve the rating further still. Our top-quality appliances with integrated heat pumps achieve energy efficiency class A on the new scale. This means that our customers are doing their bit for the environment regardless of which programme they choose. 



“Our resources are finite. We’re working with V-ZUG to find eco-friendly solutions and think about what future washing machines with circular product design could look like. This friendly and exciting collaboration with such a trailblazing partner is a win for our company and for me personally.”

Adrian Scheiber, Managing Director, Immark AG Schattdorf

 

Circular products and services stories

Larger selection with fewer parts
Launched in March 2021 after six years in development, our Excellence Line is based on the completely redesigned basic modular system and the Advanced Line, which was launched in 2020. Ovens and steamers may have different functions but they now share up to 90 per cent of the same components. “That wasn’t always the case,” recalls Roy Keller, Lead Project Manager for the Excellence Line. “Every time we upgraded one of our models, we then had to design new components for all of the other ones to make use of the same innovation.” Customers were never aware of this; it was only when you looked at the inner workings of the thermal appliances that you noticed the major differences in build. Those days are now over. Thanks to what we call platform technology, we can cut down on almost 400 parts while better accommodating our customers’ preferences. This follows the principle of making products look different on the surface while keeping their inner workings uniform. “Our production processes have become much more efficient,” adds Roy Keller, proudly. “By standardising the production steps, we are now working with fewer assembly lines, and we’re quicker during development.” The production process wasn’t the only area that we made more efficient, we also made improvements along the entire upstream value chain. Having fewer parts means reducing the number of suppliers, transport journeys and warehousing space requirements. The technical refresh afforded us the time to look more closely at the materials we use and remove certain harmful additives. This kind of transformation calls for close cooperation between the development, production, assembly and service teams. Being able to work together in person on site facilitated this. The modular system could cover even more product categories in the future.

At the end of the life cycle
“A customer has never asked for this before,” says Adrian Scheiber, Managing Director of Immark AG Schattdorf, with surprise in his voice as he recalls our request from a few months earlier. V-ZUG approached Adrian in autumn 2020, asking to get a more detailed picture of the recycling rate for its Adora washing machines. “We recycled 10 tonnes of Adora washing machines in a separate batch and looked for ways to optimise the process,” he explains. Marcel Niederberger, Head of Sustainability at V-ZUG, is delighted that the appliances are over 90 per cent recyclable. “But it was even more interesting to see that we also have a major opportunity to improve our products’ recyclability, particularly with the material mix that we use,” he says. In addition to steel, aluminium and copper, different types of plastic are also used to make the appliances. By minimising the number of plastic varieties and only using them where necessary, we can boost our recycling rate. There is even more potential in that the motors, condensers, cables and printed circuit boards can be removed as intact components. Employees at Immark AG Schattdorf remove these parts before the cross-flow shredder – a giant drum with rotating anchor chains at the bottom – breaks up the washing machine into small pieces. In the future, exploded diagrams for the Adora washing machine could help the employees to find the important components quickly. These ideas came out of joint workshops held between recycling experts and the V-ZUG development team. Together we aim to identify further opportunities to develop future household appliances with maximum recyclability.

Renting premium quality instead of owning it
Our current age of digitalisation and the sharing economy compels us to cast a critical eye over existing business models. These trends are shifting away from ‘owning’ to ‘using’ models that are flexible, personalised and seamless. We responded to this trend in the year under review with the trial launch of ‘Clean & Simple’ in our B2B business. Instead of buying household appliances, the customer signs a service hire agreement with V-ZUG. This includes installing and setting up appliances and servicing and replacing faulty products. Whether they are washing machines or tumble dryers, V-ZUG retains ownership of the appliances. This allows us to maximise the added value of our products throughout their entire life cycle and extend their service life by guaranteeing ongoing maintenance and upgrading the appliance when needed. But most importantly, this model allows us to close the loop. Our waste management partners together with the Swiss waste disposal network already take care of our recycling and safe waste disposal needs. However, we expect an even higher level of reuse if V-ZUG oversees the process and takes insights from it to inform the product development processes. Since V-ZUG takes back the appliance from the customer if they no longer need it or want a different product, we can prevent appliances from being disposed of prematurely. We will continue to trial the service in 2021, and we will use insights and customer feedback to decide in what form and for which products the service will continue in the future. 

Circular products and services key figures

V-ZUG appliances are energy efficient
The proportion of V-ZUG appliances supplied with an energy efficiency rating of A or higher has plateaued over the last few years at around 97 %. The launch of our new dishwasher led to a significant increase in the share of appliances with an A+++ rating in 2020.

Some appliance categories do not have any energy rating. At V-ZUG, these categories are hobs, warming drawers and microwaves. The share for these categories remains steady at around 18% of all appliances supplied.

 

Graphic: Rated appliances supplied by energy efficiency rating 

We are investigating what causes faults
The fault rate rose by 13.8% in 2020 compared to the previous year. In comparison with the base year 2015/2016, the rate has fallen by 11.5% overall. The increase from 2019 was the result of malfunctions with built-in electronic components and issues with the tubs in dishwashers. If the fault rate increases in this way, we work hard to get to the bottom of the causes and introduce remedial measures as quickly as we can. We are continually investing in the quality of our products and manufacturing processes.

Graphic: Fault rate in Switzerland (relative to 2015/2016 figures)

Longer response times, but more faults remedied first time
If an appliance develops a fault, we want to be on site quickly and to resolve the problem on the first visit, if possible. The response time and the rate of faults resolved first time are therefore key performance indicators for our Service and Support teams. 

The rate of faults resolved on the first visit continued to increase and reached a new peak of 91.4 % in 2020, which is the culmination of continuous training and optimising different process steps.

The average response time has been increasing since 2018 due to the changeover to SAP in 2018 and 2019. The system issues partly caused by this process have now been resolved and stabilised. 

The pandemic and subsequent measures for protecting employees and customers presented challenges for the service teams in particular as they carried out their work. Protective measures such as quarantine and shielding for vulnerable people meant that there was frequently a lack of available staff, making response times longer than the long-term average. 

Fortunately, results from direct customer satisfaction surveys were positive despite this, reporting that 95 % of customers were either delighted or very satisfied with their service.

Graphic: Average response time in days (Switzerland)

Graphic: Rate of faults remedied first time in % (Switzerland)

Impact on SDGs 7, 9, 12 and 13
V-ZUG offers its customers durable, eco-friendly appliances for modern homes. We use special features on our products to highlight the environmental impact for users and make it easy for them to be eco-friendly when carrying out household tasks. We are currently working hard on exploring the circular design of our products. We aim to make them from materials and components that can be upgraded, repaired, reused, adapted or broken down to be recycled. As a result, our high-quality appliances will stay in the closed-loop system for even longer and create sustainable added value. We need circular approaches like these to make our economic system more resource efficient and decouple economic prosperity from environmental damage. This is where V-ZUG can – and fully intends to – contribute its ideas and lead the way.

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