2.1 eco efficient system innovation vezzoli-11-12 (33)

course System Design for Sustainability
subject 2. System design for eco-efficency

learning resource 2.1
Eco-efficent system innovation

carlo vezzoli
politecnico di milano . INDACO dpt. . DIS . school of design . Italy

Learning Network on Sustainability

Carlo Vezzoli AH-DESIGN, EU PROJECT
Politecnico di Milano / INDACO dept. / DIS / School of Design / Italy

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 system innovation 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 system innovation: summing up


SUSTAINABILITY: SIZE OF CHANGE

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: QUALITY OF CHANGE

RADICAL CHANGE (DISCONTINUITY)
PROMOTE (EVEN) SYSTEM INNOVATIONS
broader than product innovation, not only
technological, but even socio-cultural and
organisational innovations


A KEY CONTEMPORARY QUERRY:
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?


ECO-EFFICENT SYSTEM INNOVATIONS

innovations delinking economic interests from
environmental impact increase
broader than process and product product
innovations, not only technological, but even socio-
cultural and organisational ones


A PRELIMINARY EXAMPLE OF
ECO-EFICIENT SYSTEM INNOVATION


RICOH: PAY PER PAGE GREEN
photocopiers/printers >
PRINTED PAGES AND COPIES
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.


ECO-EFFICINET SYSTEM INNOVATION:
A DEFINITION
“an offer model providing the
integrated mix of products and
services that are together able to
fulfil a particular demand of
(customer) “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 seek
after environmentally beneficial new
solutions”
[to be published in 2011, by Greenleaf
english, chinese, thailandese,
pdf free of charge and in copy left www.lens.polimi.it]


SYSTEM ECO-EFFICENCY: moving out of traditional product sales/design

system (life cycle) resources wide system (multiple life cycles)
optimization: product/function-based resources optimization:
demand/satisfaction-based
discrete resources optimization:
phase/stakeholder-based

retailers retailers retailers
r

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uce
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c li

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to m
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pr o d

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designer designer designer

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er
ife ife ife
su -l r su -l r su -l r
pp of e pp of e pp of e
lie d- a g lie d- ag lie d- ag
rs en an rs en an rs en an
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[e.g. detergent] [e.g. washing machine] [e.g. energy supply]

[e.g. satisfaction-syetem= to have cleaned cloths]


TRADITIONAL PRODUCT SALES MODEL:
ECO-EFFICENCY CONSTRAINTS
low interact. between product-system’s stakeholders
low interact. between satisfaction-system’s stakeholders

- 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


TOWARD THE SYSTEM ECO-EFFICIENCY
(delinking economic interests from environmental
impact increase)

hift/allocate,

n the stakeholder responsible for the products and/or
the services development,

he direct economic and competitive interest to reduce
their environmental impacts

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


ECO-EFFICENT SYSTEM INNOVATION
TYPOLOGIES (EXAMPLES)


KLUBER LUBRIFICATION
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

E-E PSS of Type I – Adding value to the product life cycle

Kluber sells to engineering industry lubricants and ...

KLUBER CUSTOMER
LUBRICATION Engineering
LAB industry

... a service of analysis for the lubricants effectiveness
and environmental impact reduction (movable lab)

BENEFIT FOR KLUBER BENEFIT FOR ENVIRONMENT BENEFIT FOR CUSTOMER
. Offer diversificationReduction ofImproved efficiency > Cost reduction
. . lubricants use >
. Customer loyalty reduced environmental impact
. Less environmental issues to solve


E.-E. SYSTEM INNOVATION (TYPE I)
ADDING VALUE TO THE PRODUCT LIFE CYCLE
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 user reaponsibility in the use and/
or disposal of the product/semi-finished product
(own by her/him)


XEROX
Xerox offers a package deal
and installs and maintain
photocopiers (not owned by
the customer) and may even
makes and delivers copies. The
customer pays for the
package.

the innovative interaction between the company
and the client, make the companies’ economic
interest to provide (and design) long lasting,
reusable and recyclable photocopiers.
photocopiers > COPIED PAPER


XEROX
E-E PSS of Type II – Providing final results to customers

Xerox offers a package deal (products + services).

The customer pays for the package ...

XEROX CUSTOMER

... and Xerox installs and maintain photocopiers (not
owned by the customer), makes and delivers copies.

BENEFIT FOR RANK BENEFIT FOR ENVIRONMENT
XEROX BENEFIT FOR CUSTOMER
. Directly profit from components re-use need to invest in the machine
. Increased products’ lifespan and resources
. No and material
recycling from discardeda photocopier producer only.
Xerox is not reduced environmental impact
efficiency > products
purchase and overall cost reduction in use
. Directly profit from resources efficiency
XEROX: A DOCUMENT COMPANY!


E.-E. SYSTEM INNOVATION (TYPE II)
PROVIDING FINAL RESULTS TO CUSTOMERS
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)


ARISTON + ENEL: PAY-PER-USE

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
washing machine > ABILITY TO WASH

ARISTON + ENEL: PAY-PER-USE
E-E PSS of Type III – Providing enabling platforms for customers

PARTNERSHIP The partnership offers an
enabling washing platform.

ARISTON The customer will pay for
Household

+ appliances the number of washes he/she will do ...
CUSTOMER
Household
... and the partnership delivers the
ENEL washing machine (not owned by the
Energy
customer) and supply energy (not
provider
directly paid by the customer),
maintenance, up-grading and end-of-life
collection.

BENEFIT FOR THE PARTNERSHIP ENVIRONMENT
BENEFIT FOR BENEFIT FOR CUSTOMER
. Increased energy efficiency and products’
. Directly profit from energy efficiency need to invest in the machine
. No
. Re-use of components from discarded productsimpactreduction in use
lifespan > reduced environmental cost
purchase and overall

E.-E. SYSTEM INNOVATION (TYPE III)
ENABLING PLATFORMS FOR CUSTOMERS
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)


ECO-EFFICIENT SYSTEM INNOVATION TYPOLOGIES

- adding value to the product life cycle
- providing final results to customers
- providing enabling platforms for customers


SYSTEM 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 (system eco-
efficiency)


SYSTEM INN. ECO-EFFICIENT POTENTIALS

the economic interest of a stakeholders foster:
. product life cycle optimization
. materials life extension
. “in use” resources minimization

higher 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)


NOT ALL SYSTEM INNOVATION ARE
ECO-EFFICENT!

> 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 ECO-EFFICENT SYSTEM INNOVATION 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


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

WHY ECO-EFFICIENT-PSS ARE NOT YET DIFFUSED?


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, …


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


… 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]


SYSTEM INNOVATION 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)


2.1 eco efficient system innovation vezzoli-11-12 (33)

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