Product service system

A product-service system (PSS), also known as a function-oriented business model, is a business model, developed in academia, that is aimed at providing sustainability of both consumption and production. [cite journal|journal=Journal of Cleaner Production|volume=14|issue=17|date=2006|pages=1455–1465|doi=10.1016/j.jclepro.2006.01.018|publisher=Elsevier Ltd|title=The transfer and application of Product Service Systems: from academia to UK manufacturing firms|author=M.B. Cooka, T.A. Bhamrab and M. Lemonc]

What a PSS is

The two most widely accepted definitions of what a PSS is are those by Dr Oksana Mont, Assistant Professor at the International Institute for Industrial Environmental Economics at Lund University; and by Cees van Halen, Harry te Riele, and Mark Goedkoop, consultants commissioned by the Dutch government in 1999 to report on whether the promotion of Product Service Systems was indeed beneficial for both economy and ecology. Those definitions are that a PSS is:cite book|title=Methodology for Product Service System Innovation|author=Cees Van Halen, Carlo Vezzoli, Robert Wimmer|pages=21|date=2005|publisher=Uitgeverij Van Gorcum|isbn=9023241436|location=Assen] [cite book|title=Innovation in Life Cycle Engineering and Sustainable Development|author=Daniel Brissaud, Serge Tichkiewitch, and Peggy Zwolinski|pages=305|date=2006|publisher=Springer|isbn=1402046014] cite web|url=http://cfsd.org.uk./events/tspd6/tspd6_3s_cases.html|title=Sustainable Services Systems (3S): Transition towards sustainability?|work=Towards Sustainable Product Design, 6th International Conference, October 2001, Amsterdam, The Netherlands|publisher=Centre for Sustainable Design|date=2001-11-09]
*(Mont) "a system of products, services, supporting networks, and infrastructure that is designed to be competitive, satisfy customers' needs, and have a lower environmental impact than traditional business models"
*(van Halen, te Riele, Goedkoop) "a marketable set of products and services capable of jointly fulfilling a user's needs"

Other people's definitions of a PSS include:
* (Manzini, Vezzoli) "the result of an innovation strategy, shifting the business focus from designing and selling physical products only, to selling a system of products and services which are jointly capable of fulfilling specific client demands"

Mont elaborates her definition as follows: A PSS is pre-designed system of products, service, supporting infrastructures, and necessary networks that is a so-called "dematerialized" solution to consumer preferences and needs. (The concept of "dematerialization" in this context is described in papers by Eva Heiskanen, some of which are listed in Further reading.) It is a new interpretation of the product value chain, that has a lower environmental impact than separate products and services fulfilling the same function outside of a single system. It is also a "self-learning" system, one of whose goals is continual improvement.cite book|title=Print and Electronic Text Convergence|author=Bill Cope and Diana Kalantzis|pages=19,26|date=2001|publisher=Common Ground|isbn=1863350713]

Types of PSS

There are various issues in the nomenclature of the discussion of PSS, not least that services are products, and need material products in order to support delivery, however, it has been a major locus of research for several years. The research has focussed on a PSS as system comprising tangibles (the products) and intangibles (the services) in combination for fulfilling specific customer needs. The research has shown that manufacturing firms are more amenable to producing "results", rather than solely products as specific artefacts, and that consumers are more amenable to consuming such results. This research has identified three classes of PSS:cite book|title=Design and Manufacture for Sustainable Development 2004|editor=Tracy Bhamra, Bernard Hon|author=M Cook|chapter=Understanding the potential opportunities provided by service-orientated concepts to improve resource productivity|pages=125|date=2004|publisher=John Wiley and Sons|isbn=1860584705] ;Product Oriented PSS: This is a PSS where ownership of the tangible product is transferred to the consumer, but additional services, such as maintenance contracts, are provided.;Use Oriented PSS: This is a PSS where ownership of the tangible product is retained by the service provider, who sells the functions of the product, via modified distribution and payment systems, such as sharing, pooling, and leasing.;Result Oriented PSS: This is a PSS where products are replaced by services, such as, for example, voicemail replacing answering machines.

Impact of PSSes

Several authors assert that product service systems will improve eco-efficiency by what is termed "factor 4", i.e. an improvement by a factor of 4 times or more, by enabling new and radical ways of transforming what they call the "product-service mix" that satisfy consumer demands whils also improving the effects upon the environment.

van Halen et al. state that the knowledge of PSS enables both governments to formulate policy with respect to sustainable production and consumption patterns, and companies to discover directions for business growth, innovation, diversification, and renewal.

References

Further reading

Journal of Cleaner Production articles

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Books and papers

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* — a set of reports commissioned by the Dutch Ministry of Economic Affairs and the Ministry of Housing, Spatial Planning and the Environment
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Dematerialization

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