One warehouse orders new scanners while another holds working devices left over from an equipment upgrade. Reusing them takes more than publishing a stock list. Teams need to check compatibility and condition, reserve the devices and agree who pays for preparation and delivery. An internal marketplace should support this choice before purchasing approval, taking the required delivery date and full transfer cost into account.
The cost of invisible idle assets
In a typical corporate environment, asset management systems are designed for financial accounting, tracking depreciation schedules rather than operational readiness. When a project concludes or a facility downsizes, the associated equipment can remain on the balance sheet while disappearing from operational view. Managers lack visibility into what is idle, where it is located, and whether it is in working order. Consequently, the organization operates a linear take-make-waste model within its own boundaries, continuously buying new items while existing ones gather dust.
A new purchase carries an embedded carbon footprint from manufacturing and transportation. By ignoring existing assets, companies inadvertently multiply their environmental impact while simultaneously degrading their cash flow. The circular economy tackles these global challenges by decoupling economic activity from the consumption of finite resources. Keeping products in circulation through internal reuse directly reduces the need for new extraction and eliminates waste before it is produced.
Consider an illustrative scenario: a logistics company operates multiple regional hubs. The manager of Hub A requests 20 new industrial barcode scanners to handle increased volume. Procurement approves the capital expense. Meanwhile, Hub B recently upgraded its automated sorting line, rendering 30 identical scanners redundant. Because these scanners are stored in a local maintenance closet and only visible on Hub B's localized inventory list, the company spends cash unnecessarily. To eliminate waste and pollution, organizations must bridge this visibility gap.
Sources: [1]
Defining condition and ownership for internal circulation
To circulate products and materials at their highest value, an organization must shift from isolated departmental ownership to a shared resource model. This transition begins with defining what makes an asset available. Equipment cannot simply be listed; it must be decoupled from its original project and accurately described so that a receiving manager can trust its utility. A shared infrastructure for cataloguing provides a consistent and streamlined experience for all departments.
The internal catalogue requires specific, standardized data fields. Beyond the basic asset identifier and description, the registry must capture the current physical location, the responsible owner, and a precise condition grade. Categories such as New, Good, or Needs Minor Repair help set expectations. Standardizing how assets are described significantly increases the efficiency of sorting and storing available equipment, much like standardization works in external supply chains.
Furthermore, overcoming the departmental hoarding mentality is critical. Department heads might view their budget-purchased equipment as proprietary assets rather than corporate resources. Overcoming this requires a cultural shift supported by transparent data. A clear corporate policy must mandate that assets unused for a specific period be flagged as available in the internal exchange. When managers trust that they can easily source equipment from the exchange when needed, they are more willing to release their own idle stock.
Evaluating the trade-off: Transfer versus new procurement
Implementing circular economy procurement practices requires intervening before a purchase order is issued. Procurement policies must be rewritten to mandate a registry check before any purchase order above a certain threshold is approved. This aligns with circular procurement frameworks that embed circular economy principles directly into corporate purchasing strategies. When a manager requests equipment, the procurement team or the automated system must first query the internal catalogue to identify potential matches.
However, the decision to reuse requires evaluation. The operations director must weigh the total cost of transfer against the price of a new asset. This calculation includes the logistics of moving the item, any necessary repairs or recalibration, and the remaining service life of the asset. If an idle motor requires extensive refurbishment and shipping across the country, the combined cost might approach the price of a new, locally sourced equivalent with a full warranty.
The trade-off hinges on trust and economics. The receiving department must be confident that the transferred asset will perform reliably, which is why the condition criteria and the repair thresholds must be strictly defined. The following table outlines the criteria for making this decision, comparing internal fulfillment scenarios against the baseline of new procurement.
| Fulfillment scenario | Acceptance criteria | Cost components | Required record |
|---|---|---|---|
| Internal transfer (As-is) | Asset matches spec, condition is Good | Shipping, internal handling | Digital handover receipt |
| Internal transfer with repair | Asset matches spec, condition is Fair | Shipping, parts, technician labor | Inspection and repair log |
| New procurement | No internal match, or repair exceeds 50% of new cost | Purchase price, inbound shipping | Purchase order, warranty registration |
Sources: [4]
Structuring the request and handover workflow
Visibility alone does not move equipment; a formal workflow is required to manage the change of custody. The process must protect both the sender and the receiver. When a match is found in the catalogue, the requesting manager initiates a reservation, temporarily locking the asset from other users. This prevents double-booking and signals to the current owner that a transfer is pending, initiating the physical verification phase.
In our illustrative logistics company, reserving 30 idle scanners triggers a task for technical staff to perform a standardized inspection. While a documented record supports checking the asset history, verifying that batteries hold a charge requires actual testing against strict acceptance criteria. To balance operational risk and speed, managers must test a sample; if failure rates are high, the decision shifts to requiring full diagnostic checks.
The technical role performing the inspection must use a standardized checklist specific to the asset class, ensuring consistent quality control. Once the inspection protocol is completed and attached to the workflow, the current owner approves the release. The assets are shipped, and upon arrival, the Hub A manager signs a digital receipt. This final handover record updates the asset registry, transferring operational accountability and the internal cost center allocation.
Automating the registry and process
Managing this lifecycle via emails and spreadsheets can break down due to version control issues, lack of concurrent access, and missing audit trails. To scale an internal exchange, the organization needs a digital process layer that connects the request, the inspection, and the final approval. High return rates in circular systems depend on providing a frictionless customer experience; similarly, internal users need a seamless digital interface to adopt reuse practices.
Scriptum serves as a low-code platform for automating processes, forms, registries, and integrations. Scriptum is a configurable workflow context, not an out-of-the-box circular marketplace. Operations directors must first define the specific data models for their equipment categories and map the approval routing. Configuring Scriptum involves creating custom digital forms for asset entry and setting up role-based access controls so only authorized personnel can approve transfers.
Test integration with accounting and access management on one equipment class. Run several illustrative requests: a successful transfer, rejection after inspection and a cancelled reservation. If approval delays delivery, clarify ownership or remove duplicate steps while retaining safety and suitability checks. Expand the marketplace once these routes work and actual preparation and delivery costs have been accounted for.
Action checklist
- Identify a pilot category of high-value, easily transportable assets for the initial exchange.
- Define three to four standardized condition grades and the inspection criteria for each.
- Map the approval workflow, specifying who inspects the asset, who approves the release, and who signs the receipt.
- Configure a low-code registry to track availability, route requests, and record the final handover.
Questions and answers
Does an internal transfer change the asset's accounting value?
The remaining book value transfers to the new cost center along with the physical item. However, the operational workflow focuses on physical availability and condition, leaving depreciation tracking to the integrated ERP system.
How do we handle assets that need repair before reuse?
The workflow must include a mandatory technical inspection step. If the estimated repair and logistics costs exceed a predefined threshold, such as 50 percent of a new equivalent, the asset should be routed for parts harvesting or recycling rather than internal transfer.
Can we use our existing ERP for this exchange?
Standard ERP configurations track financial ownership but lack flexible request workflows for operational staff. A dedicated low-code process layer bridges this gap by managing the daily reservations and inspections while updating the ERP in the background.
Sources
- The Circular Economy | Definition & Model Explained | Ellen MacArthur Foundation
- Alliance Technology Stack — UnityBase & products | Intecracy Group
- Unlocking a reuse revolution: scaling returnable packaging | Ellen MacArthur Foundation
- Circular economy procurement: a framework for businesses | Ellen MacArthur Foundation