The Centre for Sustainable Design (CfSD) has prepared a series of links to exisiting reports and cases on 3S. In addition, a series of sites have been identified that (a) provide information on future scenarios and (b) highlight scenario-building techniques.

3S Reports and Cases

Products and services both provide functions to consumers that fulfil their needs. Products can also be regarded as a form of service delivery in meeting these human needs. There is a growing body of research and real-life case studies that look to reconfigure the relationship between products and services for meeting consumer needs with less environmental impact than using traditional products and traditional services to meet those same needs. New product-based services explore these possibilities.

The environmental benefits of altering the product-service mix have been outlined in several pieces of international research. Below are listed some key research papers that provide a start in understanding changing the product-service mix for environmental and "sustainable" benefit.

Content

• Background
• Definitions
• Recent Research
• The Rebound Effect
• Cases

Background:

Fioruzzi, M. (1996). Dematerialization and Service Economy: How Good Is It? http://www.cyen.com/green_value/paper1.htm

Giarini, O. and Stahel, W. (1993). The limits to Certainty. 2^nd edn. Kluwer: Dordrecht, The Netherlands

Goedkoop, M., van Halen, C., te Riele, H., and Rommens, P. (1999), Product Service Systems, Ecological and Economic Basics, Pre consultants: The Netherlands (downloadable from http://www.pre.nl/pss/default.htm

Hockerts, K. (1999), Eco-efficient service innovation: increasing business - ecological efficiency of products and services, in Charter, M., Greener Marketing: a global perspective on greener marketing practice, Greenleaf Publishing: Sheffield, UK, pp. 95-108.

Hopkinson, P. and James, P. (2000), Typology of Eco-efficient services, working paper, University of Bradford: Bradford, UK

Leadbeater, C. (2000). Mind Over Matter, Green Alliance: London, UK

Meijkamp, R. (2000), Changing Consumer Behaviour Through Eco-efficient Services: an empirical study on car sharing in the Netherlands, Delft University of Technology: Delft, The Netherlands

Mont, O. (2000). Product-Service Systems, AFR-Report 288, Swedish Environmental Protection Agency: Stockholm, Sweden.

Oosterhuis, F., Rubik, F. and Scholl, G. (1996). Product Policy in Europe: new environmental perspectives. Kluwer: London, UK

Rifkin, J. (2000). The Age of Access, Penguin Group: London, UK

Rocchi, S. (1997). Towards a new product-services mix. Masters thesis: International Institute for Industrial Environmental Economics, Lund University: Lund, Sweden

Schrader, U. (1996). Consumption without ownership – a realistic way towards a more sustainable consumption? Paper presented at 5^th International Research conference of the Greening of Industry Network. Heidelberg, Germany

Schrader, U. (1999). Customer acceptance of eco-efficient services: a german perspective, Greener Management International, Volume 25, pp. 105-121.

Tischner, U. (2000). 3S, Prepare meeting, Cologne, Germany - unpublished minutes.

Young, W., Quist, J., Toth, K., Anderson, K., Green, K. (to be published 2001). Exploring Sustainable Futures through 'design orientating scenarios' - the case of shopping, cooking and eating, Journal of Sustainable Product Design, Kluwer Academic Publishers: Dordrect, The Netherlands. (downloadable from: http://www.sushouse.tudelft.nl)

Definitions:

Sustainable Services and Systems (3s)
Sustainable services and systems ideally:

• should fulfill customer/consumer demands
• without negative impact on natural and social environment
• are profitable strategies for companies
• can be continued over a long period of time

Source: Tischner, U. (2000)

Product Service Systems (PSS)
PSS = a pre-designed system of products, services, supporting infrastructures and necessary networks that:

• fulfil a consumer's needs on the market
• have a smaller environmental impact than separate product and services with the same function fulfilment
• are self learning

Source: Mont, O. (2000)

PSS = a marketable set of products and services capable of jointly fulfilling a user’s needs.

Source: Goedkoop, van Halen, te Riele & Rommens, (1999)

Eco-efficient Services (ESS)
Eco-efficient Services (ESS) are all kinds of commercial market offers aiming at fulfilling customers needs by selling the utilisation of a product (system) instead of providing just the product. ESS are services, relating to any kind of product, in which some of the property rights are kept by the producer

Source: Meijkamp (2000)

An eco-efficient producer service is one which improves the eco-efficiency of customer activities. This can be done directly (by replacing an alternative product-service mix) or indirectly (by influencing customer activities to become more eco-efficient).

Source: Hopkinson, J., and James, J. (2000)

Typologies of eco-efficient services

• Activity management e.g. 'end of life' disposal of materials and products, or facilities management of energy provision of buildings
  
  
• Advice and consultancy e.g. energy or water efficiency
  
  
• Information e.g. provision of systems which make use of global positioning systems (GPS) to control tractor spraying of fertilisers or to support reverse logistics through better vehicle tracking
  
  
• Intermediation e.g. e-commerce portals which enable buyers to be found for unused capacity
  
  
• Product extension e.g. with maintenance, repair and other after-sale services
  
  
• Product result services e.g. where suppliers guarantee levels of performance and do all that is necessary to achieve this (demand-side management in energy)
  
  
• Product utility services e.g. when goods are hired or leased rather than sold
  
  
• Substitution e.g. when electronic services are substituted for physical processes (MP3 downloads)

Source: Hopkinson and James (2000)

Source: White, Stoughton and Feng, (1999)

1. Product services - offering additional services, mainly for the product sold (e.g. maintenance, guarantee, and takeback).
2. Use services - the provider no longer sells the product, but only its usage, e.g. leasing, renting, sharing and pooling. The expected eco-efficiency rating for these types of services is closely related to high use intensity, which brings about a reduction in the amount fo products needed.
3. Resullt services - offers the consumers the opportunity to benefit from the use of material goods. The product is owned and run by the supplier, who therefore has an incentive to intensify and optimise the product's operation and increase its service life.

Source: Hockerts, K. (1999) and Schrader, U. (1999)

Recent Research:

The Tellus Institute (White, Stoughton and Feng, 1999) have developed a categorisation of services, which divides into material and non-material services. They advocate that there are environmental gains that can be made from shifts from providing traditional products to material (product-based) services. These services are highlighted below. They refer to this idea as "Servicizing".

Servicizing

"The emergence of product-based services which blur the distinction between manufacturing and traditional service sector activities."
(White, Stoughton and Feng, 1999, pg 10)

White, Stoughton and Feng, (1999) outline the implications of the servicizing principle within the business world, focusing on the manufacturing sector and added "value" that servicizing can bring both for the economic well-being of the organisation concerned, as well as less environmental impact of consumption. The transformation is outlined in their taxonomy of services.

Servicizing focuses on the development of product-based services. What these Product-based Services have in common is a change in consumption patterns of the consumer from buying products, into buying services. Providing a service means a greater involvement with the product in its use phase, rather than just providing that product to the consumer. Buying and selling diversifies into a number of property rights, including leasing and pooling arrangements, as well as producer take-back. Value is created and measured by the function that is provided by the producer and the product is just a means of delivering that function. The development of a functional economy is based upon the notion that providing a function is how to meet the consumer need, rather than providing a product per se. See Stahel (1997) for further details on this subject.

According to White, Stoughton and Feng (1999) incentives to develop servicizing in a modern competitive market appear when 3 principles are in place:

• when the business arrangement serves to internalise use or disposal costs;
• when the product in question has significant value at end-of-life;
• when provision of the product is viewed as a cost, rather than a profit centre

Product Service Systems (PSS)

Goedkoop et al. (1999) explored and measured the economic and environmental potential of 10 Dutch business case studies that met their definition of product-service systems. The aim was to develop Product Service System (PSS) knowledge to enable companies to find strategic options for business growth, renewal, innovation and diversification.

Cooper and Evans (2000) have synthesised some of the major works on product-service mixes to identify six main transitions of Products to Product-service mixes, which can deliver environmental benefits by changing consumption patterns. They have focused their report on case studies that have occurred in the domestic market under these six transition types, and have addressed the specific market enablers and barriers to developing product-service mix business solutions within the UK.

'Design-Orientating Scenarios' (DOSs)

Young et al. (2001) describe strategies for creating sustainable households based on a factor 20 improvement in environmental efficiency by the year 2050. They describe 'Design-Orientating Scenarios (DOSs) using case studies of 'shopping, cooking and eating' developed in Hungary, The Netherlands and the UK. DOSs were developed as a result of stakeholder creativity workshops, which produced scenarios that illustrated a range of environmental futures.

The Rebound Effect

The "rebound effect" is the environmenally negative second order effects which can sometimes arise from eco-efficient service inputs to customers. Three levels of rebound effect can be distinguished:

• Direct Effects - where introduction of a new service creates additional demand for a closely related product or activity, e.g. energy management services reduce the cost of energy to customers who respond by having higher standards of warmth and therefore, increased energy consumption
  
  
• Indirect Effects - where introduction of a new service creates additional demand for linked products or activities, e.g. scheduling services that reduce the cost of logistics and thereby stimulare demand for more transport of goods
  
  
• Platform Effects - where new services influence the general factors determining the level and patterns of production and consumption, e.g. e-learning services create better educated and richer individuals who consume and travel more than previously

Cases demonstrate at least four ways in which services can create direct or indirect rebound effects:

• The effects on demand when the cost of supply of physical inputs falls
• The geographic extention of economic and social activity
• The effects on demand from time savings
• Changed behaviour arising from changes in contractual or property relationships.

Source: Hopkinson, J. and James, P. (2000)

Case examples of Product-Service mix business solutions

Ashland Inc, USA – chemical management services

http://www.ashchem.com/

Ashland Inc is a Chemical company that is a supplier of both speciality chemicals and the distribution processes for those chemicals.

Ashland has developed an entire management service programme around procurement, use training, regulatory compliance, waste management, disposal/recycling and energy services. This service package helps the customer in reducing operating costs, as well as better managing risk. Contractual arrangements with customers allow for unit pricing structures, reducing chemical use and keeping the management of materials with the supplier.

Castrol Inc, North America – chemical management services

http://www.castrolindustrial.com

Castrol is a supplier of professional lubricants and associated services. They offer lubricant service packages that provide the customer with more than just the product. These include needs assessment, site surveys, analysing costs and productivity indicators, training, and performance assessment for opportunities in reducing lubricant consumption. They develop profit from cost savings given to customer, rather than just the volume of chemicals they sell.

Cookson Group, UK – specialist engineering leasing.

http://www.cooksongroup.co.uk/ceramics/index.html

Cookson Group supplies engineering products for the steel, glass and ceramics sectors. One of its services is to rent refractory furnace liners to steel companies in order to help them avoid refractory disposal and stocking problems. They also provide consultancy to their customers in order to lower customers production costs with project management services.

Dow Chemicals and SafeChem, Germany – chemical management services

http://www.safechem.de

http://www.dow.com

Dow chemicals developed the Safetainer system in response to German regulations on the handling of chlorinated solvents (required Chemicals manufacturers to limit evaporation and make take-back obligatory for these solvents). SafeChem, a Dow subsidiary in Germany, developed has developed a closed loop system of delivery and take-back of the used solvents using Safetainers, to recycle the solvents back to customers.

DuPont, USA – carpet leasing

http://www.dupontflooring.com

DuPont manufactures carpets and fibres. It has introduced a product-service solution by leasing carpets to consumers. It also offers a service package for maintenance and carpet cleaning. They recycle old carpets through a carpet reclamation scheme.

Eastern Energy, UK – energy services

http://www.eastern-energy.co.uk/

Eastern Energy is one of the energy service providers in the UK that provide more than just energy to their customers. They have a business development team that offer services to their business customers that help in monitoring and saving energy. Services include sub-metering, energy management data through load consumption and profiling, process monitoring, as well as training in utility awareness and post training facilitation.

Electrolux, Sweden - functional sales of washing

http://www.corporate.electrolux.com

This is pilot project called Pay-per-Wash, at the Gotland Island in Sweden. The island was chosen because it was the only place in the world at that time with intelligent electrical meters installed in 7000 households, which allows for remote reading. The pilot was introduced into 50 households on the island. Instead of charging customers to buy a washing machine, the customer borrows a new washing machine for and pays SEK 495 as a fee to Electrolux that covers the cost of installation. In return customers are provided with Electrolux’s ‘intelligent’ energy efficient washing machine. The washing machine connects to a household electricity meter that is connected via the Internet to a central database that tracks the energy consumption of the product. Customers pay for the function of washing alone.

Gispen, The Netherlands - furniture services

http://www.gispen.nl/

Gispen is a designer and producer of Office furnishings. Gispen provides a leasing package to its customers. It also provides a consultancy service for product specification in specific situations. Once the furniture is installed they also assist the customer in moving, updating and reconfiguring the office furniture for new office plans. They become a partner and facility manager for the customer.

Greenstar Community centre, USA – e-commerce services

http://www.greenstar.org

The Greenstar community centre is essentially a group of products that deliver e-commerce service capabilities to virtually any place within the world. The centre is a unified hardware system, which is highly portable. The community enclosure includes a segmented room enclosing a medical clinic with basic equipment and tele-medicine connections, a classroom, an e-commerce and computer workstation, all powered by a commercial-grade photo-voltaic solar power array, and connected to the Web through a satellite dish or digital cellular modem for high-speed telecommunications. The Greenstar Corporation works with a community to develop products of cultural value, and to translate that into market value using the community centre.

Koppert, Netherlands – pest management system

http://www.koppert.nl

Koppert produces a biological control system for pests called ‘Bio-plus’ that is available to growers at a cost. Koppert offers an on-line web service of common crop protocols that can be accessed by growers, as well as a database of side effects that is free to growers. It also offers a monitoring service that allows growers to measure the success of their protocols using a software package called Crop-IT, which was developed by collaboration between growers and Koppert. The company also offers training facilities for developing pest recognition and natural pest enemy recognition.

Launder Bar & Café, USA – laundrette

http://www.centerstage.net/restaurants/launder-bar.html

Although laundrettes are nothing new, recently they have been providing more than just washing services. Launder Bar and Café is one example, with a bar equipped with TV screens so patrons can keep an eye on their washing.

Millicare, USA – carpet maintenance

http://www.millicare.com/

Millicare started out as a cleaning system and developed an environmental services system for office carpets and business clients. They also offer maintenance services for carpets for reconditioning and reinstalling old carpet in other areas.

Mobility, Switzerland - car sharing

http://www.mobility.ch/

The Mobility company is a large organisation - 1400 cars at 850 locations in 350 communities for 37000 customers. Customers pay a membership fee to mobility and in return have access to a range of different vehicles, from a large van or lorry through to a small car. They pay for the use of the car as and when they use it. Booking can be done 24 hours beforehand by phone or internet. If customers drive less than 1500km per year, they will save money by becoming a member of the car-sharing group, rather than owning a car.

Mobile Dishwashing, Germany – domestic services

http://www.capcon.de/agenda/isk/projekte/geschirrspuelmobil/index.html

The German Federation for Environment and Nature Protection has been using a mobile dishwashing service system at outdoor festivals and markets since 1992. It reduces plastic waste by washing porcelain and stainless steel, using environmentally friendly cleaning products.

Oce, The Netherlands – photocopier and printer re-manufacture

http://www.oce.nl/

Oce produces Photocopiers and Printers and has a commitment to the environment and eco-design and has been involved with various projects in the Netherlands. Oce design products for a long lifetime and since 1990 they have taken back their products with components re-used back into the market or recycled back into raw materials.

Odin Organic Vegetables, Netherlands – subscription food

http://www.odin.nl/

Odin supplies a service of organically grown fruit and vegetables direct to consumers from Farmers. The consumer receives the produce by paying a fixed subscription fee. All produce is supplied to Odin by growers on a fixed price contract, without using third parties such as wholesalers or auctions. Odin also offers its growers advice on agricultural and horticultural matters by experts as part of the supply relationship.

Philips Omnidiagnost – medical systems

http://www.medical.philips.com

The OmniDiagnost is a Radiography and Fluoroscopy (RF) system designed for patient examinations within hospitals. Maintenance and further technical support for the system can be offered remotely and these functions are available through service contracts. Philips also offers full training in its operation under clinical conditions using purpose-built facilities. Philips also offers the option of leasing the product over purchasing.

Renew Inc, USA – furniture re-manufacture

http://www.renew.ca/

Renew Inc. re-manufactures previously owned Steelcase® office furniture systems to "as new" condition employing environmentally responsible refinishing techniques. Renew offers four services programs that maximize the value of your existing furniture assets. These services programs can be used to purchase either remanufactured Renew or new Steelcase furniture.

StattAuto, Germany – car sharing

http://www.stattauto-berlin.de/

This is another car-sharing scheme based in Berlin that employs the membership system. It has signed up over 200 corporate customers through a discount scheme in order to help profits and improve the car range available to its traditional base of weekend drivers.

Wilkhahn, Germany - furniture services

http://www.wilkhahn.com/

This company offers a range of furniture products to the consumer that environmentally design conscious. Products are made for easy repair and maintenance, disassembly and reuse. They also sell a maintenance subscription to the sold furniture. This service annually replaces parts of the furniture that are worn out.

Xerox International – photocopy re-manufacturing

http://www.xerox.com/

Xerox Corporation originally only produced photocopiers, but has developed into a document company. They now offer a range of services including document translation, software, consulting services and outsourcing services. They also have developed their asset management programme, where products are sold or leased under contract, guaranteeing customer satisfaction through functioning machines as a fixed price per copy. Products and processes are designed for re-manufacturing.

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Last updated: 9 November, 2001