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3 rd International Business Servitization Conference SERVITIZATION AS A STRATEGY FOR THE DEVELOPMENT OF MORE ECO-EFFICIENT PRODUCTS AND SERVICES Bilbao, 14 th November 2014 Founding member of: Jose Mª Fernandez Alcala Nerea Sopelana

Servitization Jose María Fernández

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3rd International Business Servitization Conference 13-14 November 2014 Bilbao

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Page 1: 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

Page 2: Servitization Jose María Fernández

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.

Page 3: Servitization Jose María Fernández

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:

Page 4: Servitization Jose María Fernández

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

Page 5: Servitization Jose María Fernández

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?

Page 6: Servitization Jose María Fernández

6 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 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

Page 7: Servitization Jose María Fernández

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

Page 8: Servitization Jose María Fernández

8 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

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?

Page 9: Servitization Jose María Fernández

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)

Page 10: Servitization Jose María Fernández

10 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?

Decades

Revenue

Revenue

from product

sales

Revenue

from product

sales

90´s 2000´s

Lifespan

Units

manufactured

Energy

efficiency

Page 11: Servitization Jose María Fernández

11 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

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?

Page 12: Servitization Jose María Fernández

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

Page 13: Servitization Jose María Fernández

13 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?

Decades

Revenue

Revenue

from product

sales

Revenue

from product

sales

2010´s 2020´s

Durability

Units

manufactured

Durability

Page 14: Servitization Jose María Fernández

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

Page 15: Servitization Jose María Fernández

15 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?

Decades

Revenue

Revenue

from product

sales

Revenue

from product

sales

2010´s 2020´s

Durability

Units

manufactured

Durability

Revenue

from new

business

models

Page 16: Servitization Jose María Fernández

16 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

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)

Page 17: Servitization Jose María Fernández

17 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 OBJECTIVE

Page 18: Servitization Jose María Fernández

18 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

Page 19: Servitization Jose María Fernández

19 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

Page 20: Servitization Jose María Fernández

20 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

Page 21: Servitization Jose María Fernández

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

Page 22: Servitization Jose María Fernández

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

Page 23: Servitization Jose María Fernández

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

Page 24: Servitization Jose María Fernández

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

Page 25: Servitization Jose María Fernández

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

Page 26: Servitization Jose María Fernández

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

Page 27: Servitization Jose María Fernández

27 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

Page 28: Servitization Jose María Fernández

28 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:

USER of the product

Page 29: Servitization Jose María Fernández

29 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

Page 30: Servitization Jose María Fernández

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

Page 31: Servitization Jose María Fernández

31 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

Page 32: Servitization Jose María Fernández

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

Page 33: Servitization Jose María Fernández

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

Page 34: Servitization Jose María Fernández

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

Page 35: Servitization Jose María Fernández

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

Page 36: Servitization Jose María Fernández

36 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:

Analyzed aspects of new business model

Page 37: Servitization Jose María Fernández

37 3RD INTERNATIONAL BUSINESS SERVITIZATION CONFERENCE

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.

Page 38: Servitization Jose María Fernández

Thank you!! Eskerrik asko!! Gracias!!

[email protected]