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Capturing and Enhancing Provider Benefits in Product-Service Systems – A Systematic, Design-Centered Approach
Linköping University, Department of Management and Engineering, Environmental Technology and Management. Linköping University, Faculty of Science & Engineering.ORCID iD: 0000-0003-4259-1681
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Offerings comprised of jointly designed and provided products and services (Product-Service Systems, PSS) are a cornerstone of a future circular economy. Implementing a design process aimed at facilitating the provision of PSS with a lifecycle focus is seen as an important step in implementing these new types of offerings. Challenges with this have been reported, and examples of companies offering PSS without adjustments to existing, product sales-centric design processes are found in literature. It is the assumption of the research presented, that one cause for this can be the lacking understanding for the full provider benefits obtainable through providing PSS, particularly increased material efficiency and thus, improved environmental performance. To combat this, this article reports a systematic approach to capturing information on the key indicators of benefits throughout the lifecycle as well as to enhancing future designs with a focus on these benefits. To this end, two methods are presented: Provider Value Analysis (PVA) supports the collection of important, provider-centered value dimensions in the use phase of the PSS lifecycle. Provider Value Evaluation (ProVa) guides the inclusion of the identified value dimensions as KPIs into the design phase and supports the enhancement of PPS design with a focus on the provider’s benefits throughout the lifecycle. In order to support the utility of these methods and to propose a first set of broadly applicable value dimensions, this article further reports a case study carried out with an industrial company and Original Equipment Manufacturer over the course of two years, applying the proposed systematic approach. As a result, by clarifying provider benefits throughout the entire lifecycle of a PSS offering, and by providing a systematic way towards capturing and enhancing these benefits, this article aims to clarify the incentives for adaptations to the existing design processes in industry and hopes to encourage companies to take advantage of the obtainable efficiency benefits of PSS, leading to improved overall environmental performance.

Keyword [en]
Design for Sustainability; Provider Value; Value Engineering; E9ciency
National Category
Environmental Management Other Mechanical Engineering
URN: urn:nbn:se:liu:diva-130980OAI: diva2:957467
Available from: 2016-09-02 Created: 2016-09-02 Last updated: 2016-09-06Bibliographically approved
In thesis
1. What’s in it for the Provider?: A Lifecycle-Focused Approach towards Designing for Value in Product-Service Systems
Open this publication in new window or tab >>What’s in it for the Provider?: A Lifecycle-Focused Approach towards Designing for Value in Product-Service Systems
2016 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

Combining products and services into Product-Service Systems (PSS), which are often owned and even operated by the company offering them, is seen as an important element of conducting more sustainable business. The prospective environmental benefits of PSS lie mainly in the improved resource- and operational efficiency. This is achieved by way of a critical shift in incentive structure: If an industrial company assumes responsibility for an offering throughout the lifecycle, the terms on which that company operates are changed substantially in comparison to traditional product sales. Instead of benefiting from a short lifetime through additional sales opportunities or making profit through the sale of spare parts, in highly integrated PSS, each parts exchange, each technicians’ visit and each day the lifetime of the offering is reduced directly affects the bottom line of the provider. Due to that, solely as a result of economic rationality, a provider of these offerings has an incentive to design in such a way that the life of this offering is prolonged, need for spare parts is reduced, service activities are facilitated and simplified, and that the conditions are in place to allow for a second or third life of the offering through remanufacturing. Regardless of this compelling logic, at times, industrial companies fail to establish the preconditions to capturing these benefits as they continue to rely on product and sales-centric design processes even though they provide PSS.

This thesis aims to examine this unexploited opportunity from two vantage points. On the one hand, methods conceived in academia to support industry in implementing and executing joint, lifecycle-focused design of products and services, and the use of these methods in practice, are examined. Here, the focus firstly lies on understanding how PSS are designed today, and secondly, on what should change about PSS design methods to improve their implementability and usability in industrial practice, so that they can fulfill their supposed role as facilitators of efficient PSS design and operation. On the other hand, the possible benefits of providing specifically designed and lifecycle-focused PSS as an industrial company are in focus. To this end, the value attained by providers throughout the use phase of PSS is investigated, to then identify possible approaches towards enhancing this value. Eventually, both focus-areas are joined in an effort to examine the interaction between method-supported, lifecycle-oriented PSS design and the value attained by providers of such offerings.

As a result of the research, a lacking adaptation of design processes to PSS is identified in the case companies. Further, shortcomings of PSS design methods conceived in academia, e.g. excessive complexity, lacking clarity and rigidity, are found in both literature as well as in a study with an industrial company. To take a first step towards rectifying this issue, six characteristics intended to enhance implementability and usability of PSS design methods, are presented. The value attained by PSS providers has been found to be a complex but important subject. In a case study, value determinants of high relevance to the use phase of the lifecycle have been identified and assessed for their utility as indicators in the evaluation and enhancement of PSS offerings in the design phase. The practitioners involved were supportive of the applicability of the systematic approach presented to capture more value through offering PSS.

In joining both the value- and method-oriented approach, the mutual dependency of both aspects is discussed. In order to provide PSS in an economically and environmentally efficient fashion, adapting the existing design processes is imperative. The value attained by the provider can, complementary to existing customer-centric approaches, serve as an important goal for the adaptation of design processes. Ultimately, through understanding the change in incentive structure at the core of PSS, and through implementing a value-driven design process supported by efficient and effective methods aimed at providing both customer value and capturing provider benefits throughout the lifecycle, there is a genuine potential of conducting more sustainable business.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2016. 76 p.
Linköping Studies in Science and Technology. Thesis, ISSN 0280-7971 ; 1757
Integrated Product Service Offerings; Engineering Design; Value Driven Design; Evaluation; Design Methods; Provider Value; Key Performance Indicators; PSS;
National Category
Environmental Management
urn:nbn:se:liu:diva-130977 (URN)10.3384/lic.diva-130977 (DOI)9789176856963 (Print) (ISBN)
2016-09-23, ACAS, A-Building, Campus Valla, Linköping University, Linköping, 13:00 (English)
Available from: 2016-09-06 Created: 2016-09-02 Last updated: 2016-09-06Bibliographically approved

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