What is a product service system

Product service system is a system which Product Service System (PSS), offers the users the value of the product without having to own it, such as car sharing systems which offer a personal mobility value but not the car ownership or toy library systems which offer the use value of toys without having to own them.

Although PSS potentially offers a significant reduction of environmental impacts, the real success of the system depends on how PSS is planned and operated. To achieve its environmental sustainability benefit, the system should be properly designed and maintained by its stakeholders on the basis of sustainability framework (Mont, 2004). Moreover, the systems should make sure that the users are satisfied with the service provided otherwise the systems will only create other waste in terms of material, energy, and time.

The idea of a product service system is supported by functional economists who emphasize that the key to satisfying our customers is not with the product itself (Mont, 2002), but the optimization of “the use or function of goods and services and thus, the management of existing wealth (goods, knowledge and nature)” (Stahel in Mont, 2002)

A comprehensive definition of PSS is given by Ashford and Thomas (2004) who mention that a product service system is

… an innovation strategy, shifting the business focus from designing and selling physical product only, to designing and selling a system of product and services which are jointly capable of fulfilling specific client demands. Its fundamental basis is a shift in focus from selling products as a result of industrial production to selling the functionality and satisfaction that they offer through a marketable range of mutually dependent products and services that are equally capable of fulfilling the same client demands but with less environmental impact (pp. 51-52)

Thus, several key characteristics of PSS are :

• combination of tangible product(s) and intangible service(s)
• fulfilment of user needs and user-satisfaction achievement
• competitiveness
• environmental impact reduction
• innovation strategy
• integrated strategy
• user (or stakeholder) involvement
• (radical) shift of behaviour from consumption (selling product) to use (selling function).

Tukker (2004) has categorized PSS into three different types which are product-oriented PSS, use-oriented PSS and result-oriented PSS. Product-oriented PSS does not change the product system but improves its service system to enable a product to be more sustainable. Use-oriented PSS changes the system by diminishing the use of resources by encouraging sharing, renting and leasing ideas. Result-oriented PSS changes the system radically by allowing users to receive the function only, and external service providers create the functions by sustainable modes of production.

References:

Mont, O. (2002). Functional Thinking - the role of functional sales and product service systems for a function-based society (No. 5233). Stockholm: Naturvardsverket.

Mont, O. (2004). Institutionalisation of sustainable consumption patterns based on shared use. Ecological Economics, 50(1-2), 135-153.

Tukker, A. (2004, 3-4 June 2004). Myths and realities about Product Service Systems. Paper presented at the 2nd SusProNet Conference "Practical Value", Brussel, Belgium.