The document discusses eco-efficient product-service systems (PSS) as an innovative business model that can significantly reduce environmental impacts compared to traditional sales models. It defines three types of eco-efficient PSS: 1) adding value to the product life cycle by providing additional services, 2) providing final results to customers instead of products, and 3) providing enabling platforms for customers to obtain satisfaction. The document argues that when providers retain ownership of products and are paid based on the value or use of the products, their economic interests are aligned with designing and offering products that have lower environmental impacts through longer lifespans, higher resource efficiency, easier recyclability, and broader access to customers.
3.1 eco efficient system innovation vezzoli-14-15 (42)
1. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
course System Design for Sustainability
subject 3. System design for eco-efficency
learning resource 3.1
Eco-efficent system innovation
carlo vezzoli
politecnico di milano . DESIGN dept. . DIS . School of Design . Italy
Learning Network on Sustainability (EU asia-link)
Learning Network on Sustainabile energy systems (EU edulink)
2. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
CONTENTS
. Resume: sustainability and system innovation
. Traditional sales model: eco-efficiency constraints
. Moving towards system eco-efficiency
. E-E Product-Service System (PSS): definition
. Eco-efficient PSS types
. Adding value to the product life cycle
. Providing final results to customers
. Providing enabling platforms for customers
. Not all PSS are eco-efficient + rebound effects
. Barriers to EE.PSS diffusion
. Eco-efficient PSS innovation: summing up
3. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
IN 50 YEARS A WORLD-WIDE EQUITABLE SYSTEMS
OF PRODUCTION AND CONSUMPTION SHOULD USE
~90% LESS RESOURCES THAN THE
INDUSTRIALISED CONTEXTS ARE DOING TODAY
SUSTAINABILITY: SIZE OF CHANGE
4. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
SUSTAINABILITY: QUALITY OF CHANGE
PROMOTE (EVEN) SYSTEM INNOVATIONS
broader than product innovation, not only
technological, but even socio-cultural and
organisational innovations
RADICAL CHANGE (DISCONTINUITY)
5. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
WITHIN THE ENVIRONMENTAL AND ECONOMICAL
CRISIS WHICH ARE THE OPPORTUNITIES?
DO WE KNOW ANY OFFER/BUSINESS MODELS
CAPABLE OF CREATING (NEW) VALUE
DECOUPLING IT FROM THE MATERIALS AND
ENERGY CONSUMPTION?
> significantly reducing the environmental impact
of traditional production/consumption systems?
A KEY CONTEMPORARY QUERRY:
6. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
ECO-EFFICENT SYSTEM INNOVATIONS
innovations delinking economic interests from
environmental impact increase
broader than process and product product
innovations, not only technological, but even socio-
cultural and organisational ones
7. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
ECO-EFFICENT PRODUCT-SERVICE SYSTEM
EXAMPLES AND TYPES
8. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
offers lubricants + service
on-site identification
(movable lab) of equipment
inefficiency, and the
potential reduction of
emissions’ impact
the innovative interaction between the company
and the client, make the companies’ economic
interest to be other than only selling higher
amount of lubricants
lubricant > LUBRFIICATION
KLUBER LUBRIFICATION
9. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
KLUBER
LUBRICATION
Kluber sells to engineering industry lubricants and ...
LAB
... a service of analysis for the lubricants effectiveness
and environmental impact reduction (movable lab)
BENEFIT FOR KLUBER
. Offer diversification
. Customer loyalty
BENEFIT FOR CUSTOMER
. Improved efficiency > Cost reduction
. Less environmental issues to solve
KLUBER LUBRIFICATION
10. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
KLUBER
LUBRICATION
Kluber sells to engineering industry lubricants and ...
LAB
... a service of analysis for the lubricants effectiveness
and environmental impact reduction (movable lab)
BENEFIT FOR ENVIRONMENT
. Reduction of lubricants use >
reduced environmental impact
E-E PSS of Type I
PRODUCT-ORIENTED PSS:
PSS ADDING VALUE TO THE PRODUCT LIFE CYCLE
KLUBER LUBRIFICATION
11. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
a company (alliance of companies) provides
additional services - maintenance, repair, up-
grading, substitution and product take back - to
guarantee life cycle performance of the product
(sold to the customer)
it is reduced the customer reaponsibility in the use
and/or disposal of the product/semi-finished
product (own by the customer)
E-E PSS of Type I
PRODUCT-ORIENTED PSS:
PSS ADDING VALUE TO THE PRODUCT LIFE CYCLE
12. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
Ricoh offers a package
deal (Pay per Page Green)
and installs, maintains
and collects at the end-of-
life the printers and
photocopiers (not owned
by the customer); the
customer pays for the
number of delivered
pages and copies.
the innovative interaction between the company and the
client, make the companies’ economic interest to provide (and
design) long lasting, reusable and recyclable photocopiers, i.e.
environmentally friendly.
RICOH: PAY PER PAGE GREEN
photocopiers/printers >
PRINTED PAGES AND COPIES
13. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
RICOH offers a package deal (products + services).
... and RICOH installs and maintain photocopiers (not
owned by the customer), collects at the end-of life.
The customer pays per page...
BENEFIT FOR RICOH
. Directly profit from components re-use and material
recycling from discarded products
. Directly profit from resources efficiency
BENEFIT FOR CUSTOMER
. No need to invest in the machine
purchase and overall cost reduction in use
RICOH: PAY PER PAGE GREEN
14. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
RICOH offers a package deal (products + services).
... and RICOH installs and maintain photocopiers (not
owned by the customer), collects at the end-of life.
The customer pays per page...
BENEFIT FOR ENVIRONMENT
. Increased products’ lifespan and resources
efficiency > reduced environmental impact
RICOH is not a photocopier producer only.
RICOH: A DOCUMENT COMPANY!
RICOH: PAY PER PAGE GREEN
E.E. PSS (TYPE II)
RESULTS-ORIENTED PSS:
PROVIDING FINAL RESULTS TO CUSTOMERS
15. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
a company (alliance of companies) provides a
customised mix of services, instead of products, in
order to provide a specific final result to the
customer
the client does not own the products and does not
operate on them to obtain the final satisfaction
(the client pays the company to provide the
agreed results)
E.E. PSS (TYPE II)
RESULTS-ORIENTED PSS:
PROVIDING FINAL RESULTS TO CUSTOMERS
16. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
payment is based on number of
washes and includes: delivery of a
washing machine at home (not
owned), electricity supply (not directly
paid), maintenance, up-grading and
end-of-life collection.
the innovative interaction between the two
companies and the client, make the companies’
economic interest to provide (and design) high
efficient, long lasting, reusable and recyclable
washing machines , i.e. environmentally friendly
washing machine > ABILITY TO WASH
ARISTON + ENEL: PAY-PER-USE
17. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
The partnership offers a package deal (product + services).
BENEFIT FOR CUSTOMER
. No need to invest in the machine
purchase and overall cost reduction in use
ARISTON
Household
appliances
The customer pays for
the number of washes he/she will do ...
ENEL
Energy
provider
PARTNERSHIP
+ ... and delivers the washing machine (not
owned by the customer) and supply energy
(not directly paid by the customer),
maintenance, up-grading and end-of-life
collection.
BENEFIT FOR THE PARTNERSHIP
. Directly profit from energy efficiency
. Re-use of components from discarded products
ARISTON + ENEL: PAY-PER-USE
18. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
The partnership offers a package deal (product + services).
ARISTON
Household
appliances
The customer pays for
the number of washes he/she will do ...
ENEL
Energy
provider
PARTNERSHIP
+ ... and delivers the washing machine (not
owned by the customer) and supply energy
(not directly paid by the customer),
maintenance, up-grading and end-of-life
collection.
BENEFIT FOR ENVIRONMENT
. Increased energy efficiency and products’
lifespan > reduced environmental impact
ARISTON + ENEL: PAY-PER-USE
E-E PSS (TYPE III): USE-ORIENTED PSS
ENABLING PLATFORMS FOR CUSTOMERS
19. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
company (alliance of companies) provides access
to products, tools, opportunities enabling clients to
get their “satisfaction”
the client does not own the product/s, but
operates on them to obtain the “satisfaction” (and
pays only for the use of the product/s)
E-E PSS (TYPE III): USE-ORIENTED PSS
ENABLING PLATFORMS FOR CUSTOMERS
20. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
ECO-EFFICIENT PSS INNOVATION TYPOLOGIES
- adding value to the product life cycle
- providing final results to customers
- providing enabling platforms for customers
21. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
“an offer model providing an
integrated mix of products and
services that are together able to
fulfil a particular customer demand
(to deliver a “unit of satisfaction”),
based on innovative interactions
between the stakeholders of the value
production system (satisfaction
system), where the economic and
competitive interest of the providers
continuously seeks environmentally
beneficial new solutions”
[Vezzoli et al., 2014]
ECO-EFFICINET PRODUCT-SERVICE
SYSTEM INNOVATION: A DEFINITION
22. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
producer
suppliers
customer
client
end-of-life
m
anager
retailers
designer
[e.g. washing machine]
[e.g. satisfaction-syetem= to have cleaned cloths]
discrete resources optimization:
phase/stakeholder-based
[e.g. detergent] [e.g. energy supply]
producer
suppliers
customer
client
end-of-life
m
anager
retailers
designer
producer
suppliers
customer
client
end-of-life
m
anager
retailers
designer
SYSTEM ECO-EFFICENCY: moving out TRADITIONAL PRODUCT SALES/DESIGN
wide system (multiple life cycles)
resources optimization:
demand/satisfaction-based
system (life cycle) resources
optimization: product/function-based
23. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
- phase’s transformation (processes):
interest in reducing resources consumption
- phase’s transaction (semi-finished/products):
indifference in reducing resources consumption
or interest in increasing resources consumption
- cycles’ combinations (products/services):
indifference in reducing resources consumption
or interest in increasing resources consumption
TRADITIONAL PRODUCT SALES MODEL:
ECO-EFFICENCY CONSTRAINTS
low interact. between product-system’s stakeholders
low interact. between satisfaction-system’s stakeholders
24. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
… a paradigm shift from traditional offer model …
E-E PRODUCT-SERVICE SYSTEMS (EE.PSS):
product SELLING “unit of satisfaction”
individual ownership CUSTOMER VALUE access
technological INNOVATION stakeholder
an offer/business models capable of creating (new) value
decoupling it from resources consumption and reducing
the environmental impact
25. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
WHAT HAPPEN?
PSS ECO-EFFICIENT POTENTIALS (1)
if: the producer/provider offers the products/s retaining
the ownership and being paied per unit of satisfaction
(or offers on a turnkey basis the product with its
maintenance, rapair and substituotion in case of
malfunctioning)
then: she/he is economically interested to have them to
last as long as possible (the product/s or its
components)
because: she/he avoids the cost of pre-production,
production and distribution of a new product to
sobstitute the one that need to be disposed
the producer/providers is continuosly driven by
economic interests to:
design/offer product/s with an extended lifespan
26. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
WHAT HAPPEN?
PSS ECO-EFFICIENT POTENTIALS (2)
if: the producer/provider offers a product/s (or some
product’s components) to be shared by various users
(or products)
then: she/he is economically interested to have them to
be used by users the most of the time, i.e. as
intenively as possible
because: she/he icreases the income proportionally to
the overall use time
the producer/providers is continuosly driven by
economic interests to:
design/offer product/s intensively used (e.g. shared)
27. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
WHAT HAPPEN?
PSS ECO-EFFICIENT POTENTIALS (3)
if: the producer/providers offers both the products/s
and the resources it consumes, being paied per unit of
satisfaction (remaining the product’s owner or
offereing it on a turnkey basis with the resources
consumed in use)
then: she/he is economically interested to provide the
most resource efficent product/s
because: her/his gains are given by the payment minus
(among others) his/her costs of resources in use
the producer/providers is continuosly driven by
economic interests to:
design/offer product/s minimising resources
consumption during use
28. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
WHAT HAPPEN?
PSS ECO-EFFICIENT POTENTIALS (4)
if: the producer/providers offers the products/s retaing its
ownership and collecting it at the end-of its life cyle, being
paied by unit of satisfaction (or is offereing on a turn key
basis the product with its end-of-life traetement/s)
then: she/he is economically interested to have them to be
recyclcled, incenerited with energy recovery, or composted
because: she/he avoids the cost of landfilling, and avoid the
costs of either material, enregy, or compost purchase
(those obtained from the disposed product)
the producer/providers is continuosly driven by economic
interests to:
design/offer product/s with materials easy to be recyled,
incenerited with energy recovery, or composted:
29. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
WHAT HAPPEN?
PSS ECO-EFFICIENT POTENTIALS (5)
if: the provider remain the owner of the product/s
then: most advanced and effcient technologies with
lower resources consumption per unit of satisfaction
could be purchsed
because: higher initial investiment costs are affordable
to providers, as compared to everage final user
the producer/providers is continuosly driven by the
competitive interests of gaining market share via:
redusing resource consumption in use
30. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
WHAT HAPPEN?
PSS ECO-EFFICIENT POTENTIALS (6)
if: the provider remain the owner of the product/s and
is responsible on a turnkey basis about life cycle
services
then: the product/s are a accessible to a wider type of
users
because: the user don’t have the initial investment
coosts nethier unespected running cost duet to
services for maintenance, rapair, etc.
the producer/providers is continuosly driven by the
competitive interests of gaining market shares to:
increase the diffusion of Sustainable PSS
31. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
WHAT HAPPEN?
PSS ECO-EFFICIENT POTENTIALS (7)
if: the provider remain the owner of the product/s and
is responsible on a turnkey basis about life cycle
services
then: she/he improves customerr’s fidelity
because: she/he the raelationship with the customer
doesn’t stop at the act of sale, but continuos along all
the product/s lifespan
the producer/providers is increasing its market share:
it is increased the diffusion potentials of Sustainable
PSS
32. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
WHAT HAPPEN?
PSS ECO-EFFICIENT POTENTIALS (8)
if: the provider remain the owner of the product/s and
is responsible on a turn key basis about life cycle
services
then: she/he improves competitiveness with a strategic
positioning
because: she/he is differentiating form traditional
product sale (saturated) market, as well as gain in
customers’ fidelity
33. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
IN SYNTHESYS
WHEN THIS HAPPEN?
when the product OWNERSHIP and/or the economic
responsability on its LIFE CYCLE PERFORMANCE
remain by the producer/providers
WHY THIS HAPPEN?
becuse in these ways, we shift/allocate, on the
stakeholder responsible for the products and/or the
services design/development, the direct economic
and competitive interest to reduce their
environmental impacts
34. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
TOWARD THE SYSTEM ECO-EFFICIENCY
which characteristics of the offer (company/ies models)?
INNOVATIVE STAKEHOLDERS’ INTERACTIONS
A. STAKEHOLDER’S INTEGRATION (responsibility extension)
vertical: one stakeholder > Product life cycle int.
horizontal: one stakeholder > Ps + Ss life cycles int.
B. STAKEHOLDERS’ INTERACTIONS EXTENSIONS
vertical: (multiple) stakeholders > Product life cycle int.
horizontal: (multiple) stakeholders > Ps + Ss life cycles int.
35. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
EE.PSS INNOVATION: A WIN-WIN POTENTIAL
innovation in which is the company/companies’
economic and competitive interest that leads to
resouces consumption reduction and more in general a
environmental impact reduction
36. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
> CRITERIA AND GUIDELINES ARE NEEDED
> METHODS AND TOOLS ARE NEEDED
to orientate design towards system eco-efficent
stakeholder interactions (and related mix of products
and services)
NOT ALL PSS ARE ECO-EFFICENT!
37. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
NOT ALL ECO-EFFICENT PSS ARE WITHOUT
(ENVIRONMENTAL) REBOUND EFFECTS!
> may generate unwanted (enevironmentaly
damaging) side effects
e.g.1 access to product, rather than their ownership,
could lead to careless behaviour (shorter product lifespan
> higher environmental impact)
> some rebound effects are too difficult to be predicted,
but as far as they are, design attention should be given
to avoid those eventual side effects
38. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
WHY ECO-EFFICIENT-PSS ARE NOT YET DIFFUSED?
IN FACT, PSS IS NOTHING NEW
every most of the products involve services and vice
versa and change towards service economy is
happening anyway
services (not products) generate:
. more than 50 % of GDP in Europe .
more than 75% of GDP in USA
39. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
BARRIERS FOR THE ECO-EFFICIENT PSS DIFFUSION:
. for the customers/users: in industrialized contexts
the cultural shift necessary in accepting behavioural
change, e.g. a ownerless consumption, …
. for companies: the difficulty in changing the
corporate culture and the traditional business
model, …
. for governments: the difficulty in defining and
implementing policies to facilitate EE-PSS oriented
companies, …
40. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
DIFFUSED INERTIA (CONSOLIDATED HABITS) IS
LIMITING ECO-EFFICIENT SYSTEM INNOVATIONS
DIFFUSION
. PSS are not simply leapfrog business strategy: a
transition path is many time needed
. there is a lack of knowledge on SPSS development:
we need a new generation of designers (and design
educators) and other professionals capable of
operating for (complex) system research and
innovation
41. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
… ANYHOW A PROMISING WIN-WIN MODEL
“nevertheless, PSS development, seen as a whole,
present a potential for generating win-win solution
which promote profit, environmental and social
benefits”
“they have the potential to provide the necessary, if
not sufficient, conditions to enable communities to
leapfrog to less resources intensive system of social
and economical standards of living”
[UNEP, 2002]
42. Carlo Vezzoli
Politecnico di Milano / DESIGN dept. / DIS / School of Design / Italy
PSS MAIN CHARACTERISTIC
ROOTED IN A SATISFACTION-BASED ECONOMIC MODEL
each offer is developed/designed and delivered in relation to a
particular customer “satisfaction” (unit of satisfaction)
STAKEHOLDER INTERACTIONS-BASED INNOVATION
radical innovations, not so much as technological ones, as
new interactions/partnerships between the stakeholders of a
particular satisfaction production chain (life cycle/s)
INTRINSIC ECO-EFFICIENCY POTENTIAL
innovation in which is the company/companies’ economic and
competitive interest that may leads to an environmental
impact reduction (system eco-efficiency: decoupling the
creation of value from resources consumption)