Structure a product-as-a-service contract that pays for outcome or usage rather than for the unit sold.
Warehousing & Procurement
Circular Procurement Through Product-as-a-Service and Take-Back Contracts
Structure product-as-a-service and take-back contracts that shift procurement from one-off purchase to circular use, with the commercial terms and metrics that make it work.
🗓️Duration5 training days
📚Content4 modules · 8 sessions
🎓On completionAccredited attendance certificate
About the programme
Course Overview
Circular procurement is frequently described as a sustainability aspiration when it is really a commercial contracting problem: a supplier will only take back a product, refurbish an asset or guarantee a residual value if the contract allocates that risk and reward correctly, and most standard purchase agreements do neither. This course works through the contracting mechanics that make circular models viable, starting with product-as-a-service arrangements where the supplier retains ownership and is paid for outcome or usage rather than for the unit sold, and covering how to structure service levels, maintenance responsibility and end-of-contract options within that model. It then addresses take-back contracts for products the organisation does own, including how to set collection logistics, condition grading criteria and residual value formulas that both parties can rely on. Participants also examine how extended producer responsibility obligations interact with procurement decisions, and how to build the total-cost and carbon comparison that justifies a circular option to a budget holder who is otherwise comparing only upfront purchase price.
Expected Learning Outcomes
Define service levels, maintenance responsibility and end-of-contract options within a product-as-a-service agreement.
Set collection logistics, condition grading criteria and residual value formulas for take-back contracts.
Assess how extended producer responsibility obligations affect procurement category and contract decisions.
Build a total-cost and carbon comparison that evaluates a circular option against a conventional purchase.
Negotiate risk and reward allocation with suppliers who retain asset ownership under a service model.
Design supplier performance metrics that track asset utilisation, refurbishment rate and end-of-life recovery.
Who Should Attend
Procurement and category managers evaluating equipment leasing or as-a-service options.
Sustainability managers building circular economy targets into procurement policy.
Contract managers drafting product-as-a-service and take-back contract terms.
Facilities and asset managers responsible for equipment lifecycle and disposal.
Finance managers assessing the capital and operating expenditure impact of service-based contracts.
Legal counsel reviewing risk allocation in circular and asset-retained supplier agreements.
Course Modules
Select any module to see its sessions and points.
01Product-as-a-Service Contract Design
2 sessions · 8 points
Session 1Structuring Outcome and Usage-Based Payment
- Define a payment structure based on outcome, usage or availability rather than unit purchase price.
- Set metering or reporting mechanisms that measure the usage basis the payment structure depends on.
- Allocate ownership, insurance and depreciation responsibility between supplier and customer.
- Compare product-as-a-service payment structures against capital purchase for cash flow and balance sheet impact.
Session 2Defining Service Levels and End-of-Contract Terms
- Set service level agreements covering uptime, maintenance response time and replacement equipment provision.
- Define end-of-contract options, including renewal, upgrade, purchase or return of the asset.
- Clarify maintenance and consumable responsibility to avoid disputes over what the service fee covers.
- Address early termination terms and the residual obligations of each party if the contract ends early.
02Take-Back Contracts and Residual Value
2 sessions · 8 points
Session 1Setting Collection and Condition Grading Terms
- Define collection logistics responsibility and timelines for returned products at end of use.
- Set condition grading criteria that both parties apply consistently to determine residual value.
- Address data destruction and security requirements for returned equipment containing stored data.
- Specify packaging and handling requirements that protect residual value during collection and transport.
Session 2Structuring Residual Value Formulas
- Build a residual value formula based on age, condition grade and remaining useful life at return.
- Agree dispute resolution terms for condition grading disagreements between buyer and supplier.
- Set refurbishment and remarketing responsibility, clarifying who bears the cost of restoring resale value.
- Align residual value assumptions with the asset's expected depreciation schedule in the finance model.
03Regulatory Context and Category Fit
2 sessions · 8 points
Session 1Applying Extended Producer Responsibility Obligations
- Assess how extended producer responsibility schemes affect the cost and design of relevant product categories.
- Identify categories where a supplier's take-back obligation under regulation can be leveraged commercially.
- Track compliance reporting requirements that a circular contract needs to support.
- Distinguish regulatory take-back obligations from voluntary circular commitments in supplier negotiations.
Session 2Selecting Categories Suited to Circular Models
- Screen categories for circular suitability based on asset value, usage pattern and refurbishment potential.
- Assess supplier readiness and capability to operate a service or take-back model at required scale.
- Identify categories where a circular model reduces total cost of ownership rather than only environmental impact.
- Prioritise pilot categories that can demonstrate a working model before wider rollout.
04Business Case and Performance Management
2 sessions · 8 points
Session 1Building the Total-Cost and Carbon Comparison
- Build a total-cost comparison between a circular option and a conventional purchase over the asset's life.
- Quantify carbon and material impact differences to support the business case beyond cost alone.
- Present the comparison in terms a budget holder focused on upfront price will find persuasive.
- Sensitivity test the comparison against changes in usage volume and asset lifespan assumptions.
Session 2Managing Supplier Performance Under Circular Contracts
- Design metrics tracking asset utilisation, refurbishment rate and end-of-life recovery percentage.
- Review supplier performance against circular targets alongside conventional service level metrics.
- Address underperformance on refurbishment or take-back commitments through defined contract remedies.
- Report circular procurement outcomes to sustainability and finance stakeholders on a shared set of metrics.
What the participant receives
4 course modules
A structured syllabus
8 training sessions
across 5 days
32 detailed points
Applied, detailed content
Accredited attendance certificate
On completing the programme
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