An Investigation of Product Service System Models

An Investigation of Product Service System Models

Linda Ryan (IT Sligo, Ireland)
DOI: 10.4018/jssmet.2012040103
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Abstract

With an increasingly competitive global market, cost, quality, and technology leadership are no longer sufficient for businesses to secure competitive advantage. Customers are increasingly demanding product and service combinations which can be tailored to their specific needs. This is known as Product Service Systems (PSS). PSS allows companies to move up the value chain and focus on delivering knowledge intensive products and services and provide highly customizable product/ service bundles. Due to the inherent differences between products and services, many companies fail to integrate the two effectively and didn’t successfully exploit the potential of an extended service business model. This paper discusses two research based PSS models and PSS models developed through industrial application and feedback. Similarities and differences will be explored, discussed and rationalised in order to gain an understanding of the variations in PSS design approaches.
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Product Service Systems (Pss) Explained

Product/services are aimed at facilitating the sales of a product and supporting its operation. The tangible good can be the price carrier for the bundled benefits and cover the costs of the service, or the added value may be charged separately (Brax, 2005). In contrast, service products are independent from the company’s tangible offerings and can be purchased separately (Mathieu, 2001, as cited in Brax, 2005). PSS has been described as ‘an innovation strategy, shifting the business focus from designing (and selling) physical products only, to designing (and selling) a system of products and services which are jointly capable of fulfilling specific client demands’ (Manzini & Vezzoli, 2003). It is considered a useful and attractive approach as it fits well into the criteria of strategies to achieve sustainability in relation to product, production and consumption. PSS enables companies to move progressively towards a new way of interacting with its clients and can be classified into three categories (Tukker, 2003; Tukker & Tischner, 2006):

  • Product-oriented PSS: Product is owned by the consumer and delivered services are attached to the product itself e.g., Maintenance, repair, re-use and recycling, helping customers optimise the application of a product through training and consulting.

  • Use-oriented PSS: The provider does not sell the actual product, but its usage and function e.g., product retail, leasing or sharing.

  • Result-oriented PSS: The product is substituted by a service, which is owned and run by the manufacturer/ supplier e.g., web information replacing maps.

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