Manage risk of sustainable product–service systems: a case-based operations research approach

Xiaojun Wang,Xu Chen,Ziming Cai,Christopher Durugbo

doi:10.1007/s10479-018-3051-4

Abstract

Sustainable product–service systems (SusPSSs) offer an innovation-driven approach to production based on providing results or functions with minimal material use and emissions. Networks of SusPSSs partners are central to the decision-making of sustainability policies. Evaluations and assessments of network-oriented risks sources are therefore crucial to informing an industrial firm’s reorientation towards SusPSS. Traditionally, these risks beleaguer production and continue to grow in significance with complex production and innovation processes. This article presents a novel operations research application for evaluating network-oriented risks of industrial firms in pursuing SusPSSs. The model conceptualises a framework for network risk metrics and applies a fuzzy-based multi-criteria decision-making technique to evaluate levels of risk associated with reorientations to SusPSS approaches. It takes explicit account of multiple risk sources in aiding decision-making and assists in indicating strategies for improving business sustainability. In addition, it compares and ranks alternative SusPSSs as a system and on an indicator basis, which is a practical and effective decision support tool. A case study of an industrial firm is conducted to verify the effectiveness and applicability of the proposed approach in supporting firms’ decision on SusPSSs.

Highlights

Firms are increasingly acknowledging the importance of adopting sustainability policies and transforming these insights into operations that are environmentally and socially sound
With the increasing emphasis on end-of-pipe attitudes, dematerialisation strategies and optimised designs, it is important that industrial firms have effective management tools for understanding and analysing risks associated with delivering sustainable product-service systems (SusPSSs)
This article presents a case based operations research approach that supports the reorientation of industrial firms towards more Sustainable Product-Service System (SusPSS) by performing a structured analysis of network-oriented risks and evaluating different SusPSS

Summary

Introduction

Firms are increasingly acknowledging the importance of adopting sustainability policies and transforming these insights into operations that are environmentally and socially sound. Directives such as the ISO 14000 series of standards have steadily gained acceptance and offered practical guidelines for environmental management systems to minimise negative environmental impacts and continuously improve sustainable production processes (Corbett and Kirsch, 2001; Gerbens-Leenes et al, 2003). These standards draw upon interpretations of sustainability (e.g., Costanza and Patten, 1995) for policy level implementation and have spurred the development of sustainable systems of finance and exchange (Seyfang and Longhurst, 2013). A Sustainable Product-Service System (SusPSS) is one of the various sustainability initiatives designed to capture this development

Objectives

Methods

Findings

Conclusion