servitization jose maría fernández

3rd International Business Servitization Conference

SERVITIZATION AS A STRATEGY FOR THE

DEVELOPMENT OF MORE ECO-EFFICIENT

PRODUCTS AND SERVICES

Bilbao, 14th November 2014

Founding member of:

Jose Mª Fernandez Alcala

Nerea Sopelana

2 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

About the Basque Country

and Ihobe:

Ihobe is a public

agency belonging to

the Department of the

Environment and

Territorial Policy of the

Basque Government.

Its mission is to support the Basque

Government in developing environmental

policy and spreading the culture of environmental

sustainability in the Basque Country.

3 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

140 SMEs working on ecodesign

90 enterprises certified under ISO 14006

(more than 50% of total amount in Spain)

89 enterprises with certified products

(12 with EPDs and 77 with EU Ecolabel)

Ecodesign information services

Ecodesign guidance and training services

Ecodesign action support services

Recognition services

About Ihobe’s work on ecodesign:

4 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Introduction to the Basque

Ecodesign Center:

Created in 2011, the Basque

Ecodesign Center is a partnership

framework between companies from

the private sector and the Basque

Government, and whose purpose is

to design and execute ecodesign

innovative projects, with:

79,738 jobs

€56,205 million in revenue

12,788 suppliers, 2,200 of whom

are based in the Basque Country

5 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Introduction to Product Service System:

What is the product’s life cycle?

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Servitization as a strategy for the development of more eco-efficient products and services

Introduction to Product Service System:

What is Ecodesign?

1 Select low impact materials Clean material Renewable materials Low energy content materials Recycled materials

2 Reduction of material use Reduction in weight Reduction in volume

4 Distribution optimisation Less/clean/reusable packaging More energy efficient means of transport More efficient logistics energetically

3 Alternative production techniques Fewer manufacturing process stages Lower energy consumption/clean energy Waste reduction Use of fewer or cleaner consumables

5 Reduction of environmental impact during use Ensure low energy consumption Clean energy sources Reduction of consumables Cleaner consumables

6 Optimise the product life High reliability and durability Easy maintenance Modular product structure Obtain a "classic" design Strong product-user relationship

7 Optimise the system end of life Favour reutilisation of whole product Re-manufacturing or reconditioning Favouring recycling Safe incineration Safe disposal

0 New business concept Dematerialisation Shared use of products Integration of features Servitization

7 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Introduction to Product Service System:

Are short lifespans good or not?

5 10 15 20 Time (Years)

Environmental

impact (EI99 pt)

D

C

B

A

A+

A++ A+++

350

300

250

200

150

100

50

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Servitization as a strategy for the development of more eco-efficient products and services

Time (Years needed to counteract the env. Impact of a new one)

Introduction to Product Service System:

Are short lifespans good or not?

9 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Introduction to Product Service System:

What about lifespan of products?

(Source: http://productsthatlast.nl and Wang et al., 2013)

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Servitization as a strategy for the development of more eco-efficient products and services

Introduction to Product Service System:

What about lifespan of products?

Decades

Revenue

Revenue

from product

sales

Revenue

from product

sales

90´s 2000´s

Lifespan

Units

manufactured

Energy

efficiency

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Servitization as a strategy for the development of more eco-efficient products and services

Time (Years needed to counteract the env. Impact of a new one)

Introduction to Product Service System:

Are short lifespans good or not?

12 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Introduction to Product Service System:

What about lifespan of products?

Durability

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Servitization as a strategy for the development of more eco-efficient products and services

Introduction to Product Service System:

What about lifespan of products?

Decades

Revenue

Revenue

from product

sales

Revenue

from product

sales

2010´s 2020´s

Durability

Units

manufactured

Durability

14 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Introduction to Product Service System:

We need to change business models

ECO Product

Service System

Ecodesign

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Servitization as a strategy for the development of more eco-efficient products and services

Introduction to Product Service System:

What about lifespan of products?

Decades

Revenue

Revenue

from product

sales

Revenue

from product

sales

2010´s 2020´s

Durability

Units

manufactured

Durability

Revenue

from new

business

models

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Servitization as a strategy for the development of more eco-efficient products and services

Introduction to Product Service System:

How to work on PSS?

PRODUCT based

value

SERVICE based

value

Pure

PRODUCT

Pure

SERVICE PSS – PRODUCT SERVICE SYSTEM

PRODUCT

SALE

PRODUCT ORIENTED

SERVICES

USE ORIENTED

SERVICES

RESULT

ORIENTED

SERVICES

SERVICE

PROVIDING

(Source: Arnold Tukker – 2004 - Business Strategy and the Environment)

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Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

METHODOLOGY OBJECTIVE

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Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Double life cycle concept

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Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Double life cycle concept

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Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Double life cycle concept

21 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Double life cycle concept

22 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Double life cycle concept

23 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Double life cycle concept

24 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Double life cycle concept

25 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Double life cycle concept

26 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

SERVICES applicable to the product

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Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

SERVICES applicable to the product

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Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

USER of the product

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Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

OWNERSHIP of the product

30 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

OWNERSHIP of the product

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Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Product’s ENV. IMPROVEMENT

32 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Product’s ENV. IMPROVEMENT

33 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Product’s ENV. IMPROVEMENT

34 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Product’s ENV. IMPROVEMENT

35 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

METHODOLOGY

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Servitization as a strategy for the development of more eco-efficient products and services

Ihobe’s methodology for Eco-PSS:

Analyzed aspects of new business model

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Servitization as a strategy for the development of more eco-efficient products and services

Conclusions:

In the next years, the key point about

environmental considerations associated to

product design, is going to be the

“DURABILITY”.

The traditional business model associated to

manufacturing and selling products needs

to be rethought.

Product Service System is an opportunity to

improve the design of the involved product

in these new business models.

These topics are in the European roadmap

to a resource and energy efficiency society,

promoting new ways of production and

consumption.

The pioneers in this transition will have a

competitive advantage in the market.

Thank you!! Eskerrik asko!! Gracias!!

jose_maria.fernandez@ihobe.net