Circular Transformation of Industries The Art of Scaling Circular Supply Chains 2025

Supply chain design choices Hitachi supply chain configuration FIGURE 12 Collection Transport Remanufacturing* InstallationDisassembly/ extraction Recycling* In-house Outsourced Key step to get rightStorage *Preceded by additional transport step Hitachi has designed a hybrid supply chain model that combines external partnerships with in-house expertise. Logistics partners handle collection, the extraction of useful components, transport and storage, while Hitachi oversees remanufacturing and harnesses its precision manufacturing and testing capabilities. The design of Hitachi’s circular supply chain integrates elements that deliver the biggest contribution to value recovery, quality assurance and customer acceptance. These include: –Integrated collection and delivery: Used ATMs are collected directly from customer sites during the delivery of new machines. This minimizes customer disruption while ensuring reliable return rates. The reverse logistics flow builds on years of recycling experience and has been adapted to support the shift towards remanufacturing. –Targeted extraction capability: Extraction requires skilled handling to maximize component recovery while minimizing damage. Given the additional transport and labour cost involved, Hitachi relies on specialized partners to manage this step and protect remanufacturing potential. –Insourced reprocessing: Hitachi handles diagnosis, cleaning, remanufacturing and testing within the same facilities and processes used for new ATMs. This ensures remanufactured units meet new-product standards and builds customer confidence through consistent quality control across linear and circular supply chains.Operational capabilities and incentivization To support customer adoption of remanufactured ATMs, Hitachi focused on three areas: –Clear certification and traceability of reused components –Identical testing protocols and environments for new ATMs –Retaining the same price, despite added remanufacturing costs, ensuring no perceived trade-off in quality or value Key enablers Japan’s certification system for industrial waste, which grants Hitachi the legal right to collect and process used ATMs throughout the country, is a critical enabler. This regulatory approval removes a major reverse logistics barrier and underpins the feasibility of a nationwide circular supply chain. Impact Hitachi is working to increase the collection rate of its domestically manufactured ATMs to 90%. Several banks highlight refurbished ATMs as their own contributions to the circular economy. Circular Transformation of Industries 27