Use-oriented Product-service Systems Research Articles

Identifying rebound effects in product-service systems: actors, mechanisms, triggers and drivers

AbstractThe implementation of product-service systems (PSS) is prone to the occurrence of rebound effects (RE). This research aims to systematically identify the rebound mechanisms in a PSS context. Through the case study of a use-oriented PSS offer, we showcase a structured way to address RE that led to a comprehensive mapping of 23 mechanisms. The analysis demonstrates an approach to mapping rebound triggers, drivers, and mechanisms within the actors’ realms that designers can apply to ensure the potential sustainability gains of PSS offers.

Investigating the Potential Adoption of Product-Service Systems in the Luggage Industry to Promote Sustainability

The travel-goods industry is an essential part of the larger travel and tourism sector, but it allegedly creates significant environmental impacts due to resource and energy consumption. This study investigates the potential of the product-service system (PSS) models to promote the transition to a sustainable travel industry in the future. It explores the drivers and barriers to PSS adoption within the luggage industry from a theoretical perspective and identifies opportunities for value creation using both consumer and luggage industry viewpoints. Four hypothetical PSS models are developed to highlight different pathways to PSS adoption, underpinned with empirical data collected via a consumer survey and semi-structured interviews with industry experts. Even though the analysis revealed shifting consumer attitudes towards servitisation concepts within the travel-goods market, at present, the widespread adoption of PSS is hindered by the fragmented nature of global supply chains and entrenched ownership values. Addressing supply chain issues in a way that empowers end-of-life systems to sustainably manage products beyond their functional obsolescence is critical. In parallel, product-oriented PSS models are more likely to increase, driven by a burgeoning resale market and supported by digital technologies, which in turn can lead to greater prospects for use-oriented PSS adoption in the long-term that would eventually promote sustainability.

The circularity of product-service systems: the role of macro-, meso- and micro-level contextual factors

PurposeThis paper aims to examine the relationships between macro-, meso- and micro-level contextual factors that enable or inhibit the contribution of product service systems (PSS) to circularity. It is informed by the natural resource-based view (NRBV) and the multi-level perspective as theoretical lenses.Design/methodology/approachA theory elaboration approach is used through three in-depth case studies of UK and German manufacturers. Case studies provide use- and result-oriented PSS for personal computers, power tools and wind turbines. Multiple sources of evidence, including 20 semi-structured interviews, company documents and quantitative data, are triangulated to improve the validity of the results.FindingsEmpirical evidence for relationships between macro-, meso- and micro-level contextual factors show significant barriers to the extending and cycling of resource loops, primarily through maintenance, repairs and refurbishment. A firm’s environmental awareness has a determining role in the contribution of PSS to circularity. The evidence from two use-oriented PSS reveals different circularity maturity levels.Originality/valueThis research makes three key contributions. Firstly, it elaborates on NRBV by showing that a firm’s environmental awareness determines product stewardship. The type of product stewardship practices depends on the enabling and inhibiting effects of macro- and meso-level factors. Secondly, it shows that use-oriented PSS have different circularity profiles and proposes three circularity maturity levels. Finally, it provides an empirically validated framework of macro-, meso- and micro-level enablers and barriers and how they interact to enable or inhibit circularity in PSS.

Product-Service Systems: A customer engagement perspective in the fashion industry

The current fast fashion model fostering high consumption causes consequential damages to the planet and society, facts that highlight the need to curtail its growth throughout more sustainable solutions. Among these solutions is engaging fashion customers in Product-Service Systems (PSSs), which are oriented towards dematerializing fashion consumption by offering bundles of products and services. Drawing from the social exchange theory, this research sheds light on the benefits customers seek to engage with various coexisting product-oriented and use-oriented PSSs in the fashion industry. A quantitative study among 477 customers in Belgium reveals that customer engagement with PSSs in the fashion industry is a function of the benefits that customers expect to reach (economic, pragmatic, cognitive, personal, hedonic, and societal expectations) and their demographic characteristics (gender and age). Depending on the expected benefits and demographic characteristics, customers were found to engage with different types of PSSs. Accordingly, fashion companies should leverage customers’ expected benefits and demographics when developing PSSs and communicating about these PSSs.

Consumer emotions and collaborative consumption: The effect of COVID-19 on the adoption of use-oriented product-service systems

The COVID-19 pandemic is expected to widely change how consumers evaluate market offerings. In this research, we identified consumers’ emotions on the adoption of use-oriented Product-Service-Systems (PSS) and the effect of COVID-19 on such emotions using pre- and amid-COVID-19 samples. The results indicate that positive emotions are generally more associated with the process of adopting use-oriented PSS. However, the negative effect of COVID-19 on emotions influencing the decision to use the PSS is significant. We found that during the pandemic, consumers moved from the positive side of emotions to the more negative one. The emotions with the highest frequencies in pre-COVID-19 data collection (sympathy, joy, and peacefulness) suffered a significant descent effect due to the pandemic. Also, negative emotions such as fear, shame, and guilt, which were already present in the pre-COVID-19 phase, showed an increase in manifestations in the amid-COVID-19 sample. COVID-19 has increased self-interest in people, and emotions that predict altruism and concern for society were affected. We also found that previous use experience as well as gender and education do not significantly moderate the effect of COVID-19 on consumption emotions, although these demographic variables have been confirmed in other studies as important moderators in pro-environmental consumption. Finally, the results demonstrated that younger people (between 18 and 24 years old) tend to be more impacted by pandemic. Theoretically, our study contributes (1) by using an emotions scale specifically developed for consumption situations, allowing to assess a greater amount of emotions, (2) by analysing basic emotions, in addition to the self-conscious ones, that interfere in the adoption of use-oriented PSS, and (3) by confirming that an external traumatic event alters consumption-related emotions.

Mining quality determinants of product-service systems from user-generated contents

The concurrent availability of an ever-increasing volume of User-Generated Content (UGC) and text mining techniques has enabled methods to conduct both qualitative and quantitative research that was unimaginable a few years ago. These investigations have proved to generate interesting insights with potential implications in manufacturing and engineering design. This paper introduces a novel practical methodology to address the following research issue: how to infer the quality determinants of a Product-Service System (PSS) from UGCs? Analyzing a sample of UGCs by means of a topic modeling method, the idea of this study is to produce and examine the set of determinants relevant to the perception of the quality of a specific PSS. The application of the proposed approach is exemplified on a specific use-oriented PSS: car-sharing.

Joint optimization of reliability design and spares inventory for a use-oriented product-service system based on the electric vehicle charging station

With the shift of business pattern from the traditional manufacturer orientation to customer orientation, the product-service system has become more and more popular. This paper takes an electrical vehicle charging station as the research object and builds a joint optimization model of reliability design and spares inventory with the objective of maximizing net profit under the constraints of availability and customer’s loss rate. Particularly, this model considers not only two types of services, namely fast charging and slow charging but also the transfer of customers between different types of service. This new model is more accordant with the practical circumstances by involving a series of elements of the product-service system simultaneously, such as the customer’s arrival, service, replacement maintenance and spares replenishment process. Then, the probabilistic indices related to reliability are derived by applying the continuous time Markov Process. A balance between the number of charging piles and spares inventory policy can be achieved by solving the joint optimization model. The influence of model parameters on these indices and the superiority of the proposed joint optimization model are analyzed in detail by numerical examples. Finally, some critical conclusions are obtained with the intent of promoting the system reliability and profit. Furthermore, this joint optimization model can be extended to more circumstances and provides guidances to solve the reliability optimization problems regarding a similar system.

Consumer Acceptance and Value in Use-Oriented Product-Service Systems: Lessons from Swedish Consumer Goods Companies

In order to make our production and consumption systems more sustainable, there is a need to further explore and support novel business models with higher sustainability potential. Use-oriented product-service systems (u-PSS) are considered a promising alternative to traditional ownership-based business models, as they may result in lower environmental impacts. The presence of u-PSS in consumer goods markets, however, is still small. This is due in part to the nature of the products and lack of consumer acceptance of u-PSS. Lately, however, companies in Sweden have begun offering u-PSS for consumer goods, thereby challenging earlier findings. Understanding about how companies encourage consumers to select u-PSS over ownership-based options is still lacking. We investigate this question by conducting interviews with and analysing websites and publicly available company reports of seven Swedish companies from three consumer goods sectors: clothing, eyewear and furniture. We found that, while consumer barriers to u-PSS found in previous studies—uncertainty and trust, economics and costs and desire to own—persist, tailoring elements of u-PSS business models to different markets, sectors and consumer segments can help address these barriers and ensure u-PSS resonate with consumers. The study also applies the concept of consumer perceived value to show how emphasising different dimensions of value—financial, functional, emotional and social—provided by u-PSS may help increase their acceptance and adoption.

Dockless E-Scooter: A Green Solution for Mobility? Comparative Case Study between Dockless E-Scooters, Displaced Transport, and Personal E-Scooters

This study applies a life cycle assessment (LCA) to the shared dockless standing e-scooter system that is established in Brussels. The results are given for four impact categories: global warming potential (GWP), particulate matter formation, mineral resource, and fossil resource scarcity. Regarding GWP, the use of the shared e-scooters in the current system causes 131 g of CO2-eq. per passenger-kilometer while the mode of transportation displaced has an impact of 110 g of CO2-eq. Thus, at present, the use of e-scooters shows a higher impact than the transportation modes they replace. The high results for the shared e-scooter, in terms of GWP, are mainly caused by the short lifespan of the shared e-scooter. Nevertheless, as the market further matures, the lifespan of e-scooters could increase and the impact per kilometer travelled could decrease accordingly. Regarding the use of the personal e-scooter, the LCA results show an impact of around 67 g of CO2-eq. This study quantifies the LC impacts of the current situation based on local, ‘real-life’ data. However, potential changes on soft mobility patterns induced by the use-oriented product-service system (PSS), such as a shared e-scooter system, could not be quantified.

Sustainable offers for drying and storage of grains: Identifying perceived value for Brazilian farmers

The grain drying and storage process currently practiced in Brazil is mostly accomplished by firewood combustion, with a high demand for natural resources, lack of safety for operators, and a high rate of residue and pollutant generation. Brazil is the third-largest producer of grains, and public policies should restrict the firewood drying method as of the year 2020. To solve this problem, a startup developed a technology to dries grains based on oxyhydrogen combustion, using only green energy and water. This study contemplates the assessment of farmers concerning perceived value attributes and willingness-to-pay of a Sustainable Product-Service System. This solution is a mix of tangible products and intangible services offered simultaneously to solve post-harvest problems. A large survey comprising 354 small, medium, and large farmers in the South region of Brazil was conducted to evaluate the value attributes allocated by farmers for their acceptance of a new technology of grain drying and quality preservation. In this survey, to assess farmers’ perceptions were applied offers based on three types of Product-Service System: options of purchasing equipment with corrective maintenance services (product-oriented Product-Service System), renting equipment with corrective and preventive maintenance services (use-oriented Product-Service System), and complementing services for the management of quality, information, drying and storage of grains (result-oriented Product-Service System). The survey results allowed the establishment of the attributes deemed necessary by farmers, who revealed preference towards the purchase offer (56.5%) over the rental offer (43.5%), emphasizing the inclusion of the maintenance service. It is concluded that to implement complete service (maintenances types and process management) offers investments are still necessary to educate farmers in the use of management technologies. The best offer to delivered value to Brazilian farmers is acquired in purchase modality composed by drying machines, preventive maintenance, silo storage, and corrective maintenance.

Drivers and barriers for the adoption of use-oriented product-service systems: A study with young consumers in medium and small cities

Considering that one of the alternatives for transitioning to a circular economy is the adoption of new business models based on use/performance instead of product ownership, we focused this study on the adoption of product-service systems (PSS). Specifically, we identify the main drivers and barriers affecting the adoption of use-oriented PSS by young consumers residing in medium and small cities. We opted to perform a descriptive research with a quantitative approach. We verified that “environmental concern” and “healthy lifestyle” are the main drivers for the adoption of use-oriented PSS, while “unavailability of use-oriented PSS in the region or city” presented the greatest barrier to the adoption. Furthermore, we conclude that drivers associated with hedonistic/experiential needs (such as self-fulfillment, self-esteem, sense of belonging), as well as personal factors (such as age and lifestyle) tend to positively incentivize the adoption of use-oriented PSS. Notwithstanding, “situational factors”, as PSS availability and information about costs and usage methods can serve as inhibitors. Finally, to assist managers and academics, we propose a framework that summarizes the identified PSS adoption drivers and barriers along with recommendations to optimize adoption drivers.

Evaluating the Environmental Performance of a Product/Service-System Business Model for Merino Wool Next-to-Skin Garments: The Case of Armadillo Merino®

Circular business models are often enabled by means of product/service-systems (PSS). The common perception is that such business models have enhanced environmental performance when compared to conventional business models rooted in the linear economy. This article investigates the environmental potential of developing a use-oriented PSS business model for Merino wool t-shirts intended for use by the British Ministry of Defence as an alternative to the present supply system based on synthetic t-shirts purchased from sportswear clothing companies. To conduct the assessment, we apply the life cycle assessment (LCA) methodology to quantify and compare the climate change impacts and impact potentials of the proposed PSS business model and of a reference business model. Results showed that there could be significant contribution of quantifying environmental potential for PSS business models when justifying the transition to a circular economy. However, when adopting LCA methodology for this purpose, the design of the PSS needs to be well thought to overcome some of the identified challenges. The article concludes by making the case that LCA studies can support the definition, design and value creation of the product/service-systems in early development stages.

Exploring the relationship between product-service system and profitability

Over the last few decades there has been a significant change in the economic output worldwide, and services have become more and more important. Manufacturers strengthen their competitive position by relying on service offerings, which has been referred to as “servitization”. A particular research stream within such framework recalls product service systems (PSS) as the integration of products and services to deliver value to the customer. The purpose of the paper is to examine the relationship between PSS categories and profitability. The empirical analysis uses a dataset of 10,051 companies on machinery manufacturing industry drawn from the ORBIS database. The analysis further considers the location of firms and differentiates between the European and BRIC countries. The findings reveal that profitability could be represented by an ideal bell curve if we consider on the horizontal axis a spectrum of PSS with an increasing servitization level. In fact, a higher profitability is expected for those companies offering central PSS categories (Product-Oriented, Service-Oriented and Use-Oriented PSS) in contrast to what happens for Integration-Oriented and Result-Oriented PSS categories which are closer, respectively, to the “pure product” and the “pure service” configurations extremes. Finally, considering the stage of economic development, the choice of offering Integrated-Oriented PSS brings to a better financial performance in BRIC countries, whereas, in the same setting, Use-Oriented PSS choice has a negative impact.

Unintended Circularity?—Assessing a Product-Service System for its Potential Contribution to a Circular Economy

Product-service systems (PSSs) are seen as valuable facilitators of a circular economy (CE) on a business level. However, that PSSs contribute to a CE is not a given and is determined by the chosen PSS business model and strategy applied throughout the entire lifecycle. Thus, in order to support companies in implementing circular business models such as PSSs, an increasing number of frameworks and methods have been proposed in prior research. This article hypothesizes that many industrial companies are expanding to become PSS providers with neither such support nor a strong sustainability focus. There is a gap in the literature regarding the potential contribution of such PSSs to a CE. Thus, the research reported aims to provide initial insight regarding whether unintended circularity, i.e., an unintended contribution to a CE, may occur when becoming a PSS provider. Applying and adapting an existing framework for the assessment of PSSs’ potential contribution to a CE, the use-oriented PSS of an industrial company was assessed in-depth. Results regarding the relative resource reduction and the prospect of achieving absolute resource decoupling are reported and discussed. While relative improvements over product sales are identified, e.g., resulting from end-of-life efforts on reuse and remanufacturing, opportunities for additional enhancement are found, e.g., in adjustments of the PSS design process. Concerning absolute resource decoupling, a fundamental challenge lies in the use-oriented PSS’s dependency on an increasing number of physical components as the company’s business expands. This article advances the discussion on PSSs’ potential contributions to a CE with an in-depth empirical study. For practitioners, the results reported expand on important aspects of efficient and effective PSS provision throughout the lifecycle.

Replacement and inventory control for a multi-customer product service system with decreasing replacement costs

In a Use-Oriented Product Service System, the customers pay for a particular service without owning the product, and the profitability of the service provider (usually also the owner of the product) is determined by the product availability and how replacement and inventory control are implemented. With the advances in modern sensor and wireless communication technologies, service providers can monitor the health status of each product in use and then conduct condition-based maintenance accordingly. Meanwhile, the waste of the remaining life of replaced products should also be considered in the system's operation due to the increasing concerns about environmental impact and lean production. To improve the profitability of a Use-Oriented Product Service System, we formulate a discrete-time Markov Decision Process that maximizes the long-term revenue per period. To overcome the computational challenge of this problem, we propose a sequential heuristic solution incorporating a heuristic replacement policy along with a heuristic inventory control approach to solve the integrated model. The heuristic replacement policy is derived from the optimal control policy for the subsystem of a single customer. The inventory control heuristic determines the target inventory level according to a one-period look-ahead myopic optimization policy. The performance of the proposed solution and some useful management insights are investigated in a numerical study. In addition, sensitivity analyses by varying the replacement costs, holding cost, unit service revenue and deterioration rates are also conducted.

Game Theory Approach to Product Service Systems

This conceptual paper discusses the application of game theory to Product Service System (PSS) research by highlighting the pros and cons in game theory in treating various aspects of PSS. To this end, we first describe the basic formulation in game theory, its usefulness and limitations and its potential applications in PSS. We then propose some ways of modeling three types of PSS: product-oriented PSS, use-oriented PSS, and result-oriented PSS using the game theory framework. Three studies that authors have so far conducted are presented as case examples: (1) a case addressing a member-type PSS, (2) a case of product lease service, and (3) a case of platform businesses. We explain how to apply our proposed modeling methods in the aforementioned cases.

Optimal channel coordination in use-based product-service system contracts

Nowadays, service economy efficiencies are key to keep competitiveness and increase market advantages. The development of Product-Service Systems (PSS) can be an interesting strategy as they seek to improve the business performance of all the participants in the value chain. This paper proposes a novel reliability-based reward scheme for use-oriented PSS contracts. In a PSS instead of paying for the product, the client pays a fee for its performance. The contribution of this work to the existing literature is to provide a quantitative tool for the development of a use-oriented PSS contract based on non-repairable component reliability and risk sharing. It can be extended to other performance metrics such as availability and reliability. A well designed PSS achieves a mutual growth agreement for the client and the supplier if it aligns their interests through channel coordination. This is achieved by balancing the improvement in the expected cost and profit for the client and the supplier, respectively. The improvement is measured with respect to a baseline scenario where no PSS contract exists. The methodology is tested using a case study that analyses mining haul truck tires. The results show a significant overall improvement in the main key performance indicators and environmental impact of the value chain.

Lifecycle Management of Product-service Systems: A Preliminary Investigation of a White Goods Manufacturer

Product-Service Systems (PSS) have been discussed as promising business strategies towards a circular economy (CE). However, PSS solutions are not necessarily more sustainable. PSS lifecycle management may play an important role to improve the offering and achieve sustainability benefits. Nevertheless, bottom-up issues for CE implementation in the industry such as lifecycle management are still little discussed in the literature. In this sense, this paper aims to explore a PSS business strategy adopted by a large white goods manufacturer that transitioned from a linear to a circular business, and the practices applied throughout the entire lifecycle that may be valuable to achieve CE requirements. A case-based approach was employed in this study and multiple sources of evidence were considered. Data were analyzed in the light of the literature, considering an inductive approach. The main preliminary findings suggest that resources consumption reduction and cost savings can be obtained through lifecycle management practices that take into consideration CE issues since the beginning of life of the PSS offering. Design practices, the adoption of different strategies at the end of life (reuse/remanufacturing or recycle), and the implementation of cleaner production practices are some of the identified practices that can contribute to achieve resource efficiency and CE requirements. This is a work in progress and further work is going to focus on a quantitative analysis of the environmental and economic performance of this PSS. In addition, as this study focused on a use-oriented PSS, future research may compare lifecycle management practices adopted by other and distinct PSS categories, and how different lifecycle management practices may contribute to achieving resource efficiency.

Proactive Maintenance as Success Factor for Use-Oriented Product-Service Systems

In use-oriented Product-Service Systems (PSS) the ownership of the product remains with the provider who is responsible for maintenance, repair and overhaul [1]. Thus the risk of machine unavailability is transferred from the customer towards the PSS provider. In order to minimize this risk the provider needs to reduce unscheduled downtimes to enhance machine availability. Hence proactive maintenance is an important success factor for providing this PSS type [2]. In practice, manufacturing equipment providers struggle to derive the required information for providing proactive maintenance from the existing data and thus potentials remain unused. One of the problems for many companies in this context is the missing knowhow for managing and analyzing this high amount of data. This issue is discussed in research and practice under the topic “Big Data” [3]. This paper focusses on discussing different approaches for data gathering, analysis and interpretation as well as associated challenges. Drivers and hindering factors are introduced and solution approaches are provided. These aspects are analyzed in a case study in collaboration with a material handling manufacturer which was conducted in one of the transfer projects of the Collaborative Research Center Transregio 29 which addressed the dynamic interdependencies of products and services in the production area.

Configuring use-oriented aero-engine overhaul service with multi-objective optimization for environmental sustainability

As a typical sustainable product-service system, the aero-engine overhaul service aims to recover the functionality to fulfil certain flight hours and thrust requirements. How to configure the overhaul service with various sub-services is a key issue in industry. In this paper, a use-oriented aero-engine overhaul service configuration approach is proposed with two methods: overhaul service configuration and part repair service configuration. The overhaul service configuration method decomposes the overhaul service into various sub-services and creates a hierarchical service tree model, taking the cost and energy consumption into consideration. Based on the sub-service filtering and selection rule, the bill of exchange service comes with the bill of discard service. The part repair service configuration method matches each part repair procedure service with a proper service provider. Some non-dominated bills of repair services are obtained by minimizing the repair service cost, finishing time deviation and energy consumption. Considering the multi-objective character of the overhaul service configuration problem, these two methods result in some Pareto solutions to fulfil the service requirements. Through implementing the approach as a prototype, a case study is shown to illustrate the use-oriented aero-engine overhaul service configuration approach and verify its feasibility. A bridge between the flight hours and thrust requirements and the overhaul service configuration results is built when the cost and energy consumption are minimized. The study contributes to the shift of aero-engine overhaul services from the add-on services to sustainable use-oriented product-service systems.