3.1 eco efficient system innovation vezzoli-13-14

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)

Carlo Vezzoli
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 typologies
. 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 PSS diffusion
. Eco-efficient PSS innovation: summing up

Carlo Vezzoli
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

Carlo Vezzoli
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)

Carlo Vezzoli
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:

Carlo Vezzoli
ECO-EFFICENT PRODUCT-SERVICE SYSTEM
EXAMPLES AND TYPOLOGIES

Carlo Vezzoli
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

Carlo Vezzoli
KLUBER
LUBRICATION
CUSTOMER
Engineering
industry
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

Carlo Vezzoli
KLUBER
LUBRICATION
CUSTOMER
Engineering
industry
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

Carlo Vezzoli
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

Carlo Vezzoli
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

Carlo Vezzoli
RICOH offers a package deal (products + services).
... and RICOH installs and maintain photocopiers (not
owned by the customer), collects at the end-of life.
CUSTOMERRICOH
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
. No need to invest in the machine
purchase and overall cost reduction in use

Carlo Vezzoli
RICOH offers a package deal (products + services).
... and RICOH installs and maintain photocopiers (not
owned by the customer), collects at the end-of life.
CUSTOMERRICOH
The customer pays per page...
. Increased products’ lifespan and resources
efficiency > reduced environmental impact
RICOH is not a photocopier producer only.
RICOH: A DOCUMENT COMPANY!
E.E. PSS (TYPE II)
RESULTS-ORIENTED PSS:
PROVIDING FINAL RESULTS TO CUSTOMERS

Carlo Vezzoli
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

Carlo Vezzoli
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

Carlo Vezzoli
The partnership offers a package deal (product + services).
. 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
CUSTOMER
Household
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

Carlo Vezzoli
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
CUSTOMER
Household
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.
. Increased energy efficiency and products’
lifespan > reduced environmental impact
E-E PSS (TYPE III): USE-ORIENTED PSS
ENABLING PLATFORMS FOR CUSTOMERS

Carlo Vezzoli
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

Carlo Vezzoli
ECO-EFFICIENT PSS INNOVATION TYPOLOGIES
- adding value to the product life cycle
- providing final results to customers
- providing enabling platforms for customers

Carlo Vezzoli
“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

Carlo Vezzoli
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]
retailers
designer
retailers
designer
SYSTEM ECO-EFFICENCY: moving out of traditional product sales/design
wide system (multiple life cycles)
resources optimization:
demand/satisfaction-based
system (life cycle) resources
optimization: product/function-based

Carlo Vezzoli
- 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

Carlo Vezzoli
TOWARD THE SYSTEM ECO-EFFICIENCY
decoupling the economic interests from
environmental impact increase
shift/allocate,
on the stakeholder responsible for the products
and/or the services development/design,
the direct economic and competitive interest to
reduce their environmental impacts

Carlo Vezzoli
TOWARD THE SYSTEM ECO-EFFICIENCY
which characteristics of the offer (company/ies models)?
INNOVATIVE STAKEHOLDERS’ INTERACTIONS
A. STAKEHOLDER’S INTEGRATION (controll extension)
vertical: one stakeholder > IN Product life cycle
horizontal: one stakeholder > IN Ps + Ss life cycles
B. STAKEHOLDERS’ INTERACTIONS EXTENSIONS
vertical: (multiple) stakeholders > IN Product life cycle
horizontal: (multiple) stakeholders > IN Ps + Ss life
cycles

Carlo Vezzoli
PSS INNOVATION WIN-WIN POTENTIAL
SYSTEM ECO-EFFICIENCY
innovation in which is the company/companies’
economic and competitive interest that leads to an
environmental impact reduction (i.e. system eco-
efficiency)

Carlo Vezzoli
PSS ECO-EFFICIENT POTENTIALS
the economic interest of a stakeholders foster:
. product life cycle optimization
. materials life extension
. “in use” resources minimization
system eco-efficiency given too by:
. provider: higher available investiment allowing
most advanced and effcient technologies
. product sharing > faster replacement of ware out
products with new and more eco-efficient ones (on
equal number of units produced in time)

Carlo Vezzoli
> 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!

Carlo Vezzoli
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

Carlo Vezzoli
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

Carlo Vezzoli
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, …

Carlo Vezzoli
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

Carlo Vezzoli
… 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]

Carlo Vezzoli
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)

3.1 eco efficient system innovation vezzoli-13-14

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