3.1 eco efficient system innovation vezzoli-09-10 (33)

course System Design for Sustainability
subject 3. System design for eco-efficency

learning resource 3.1
Eco-efficent system innovation

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

Learning Network on Sustainability

Carlo Vezzoli
Politecnico di Milano / INDACO dept. / DIS / Faculty of Design / Italy

CONTENTS

. Resume: sustainability and system innovation
. Traditional sales model: eco-efficiency constraints
. Moving towards system eco-efficiency
. 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

Carlo Vezzoli

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

Carlo Vezzoli

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

Carlo Vezzoli

ECO-EFFICENT SYSTEM INNOVATIONS
> innovation delinking economic interests from
environmental impact increase

from the design of process and product innovation
to the design of system innovation:
innovation of the mix of products and services
that are together able to fulfil a particular demand
of (customer) “satisfaction”, as well as the
innovation of the interactions of the stakeholders
of the “satisfaction system” (value production
system).

Carlo Vezzoli

A PRELIMINARY EXAMPLE OF
ECO-EFICIENT SYSTEM INNOVATION

Carlo Vezzoli

ARISTON + ENEL: PAY-PER-USE
payment is based on number of
washes (satisfaction) 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 companies
and the client, make the companies’ interest to
design and provide high efficient, long lasting,
reusable and recyclable washing machines

Carlo Vezzoli

EC SYSTEM: A DEFINITION
“designing and providing a system of
products and services (and related
infrastructure) which are jointly
capable of fulfilling client needs or
demands more efficiently and with
higher value for both companies and
customers than purely product based
solutions. […]
PSS could decouple the creation of
value from consumption of materials
and energy and thus significantly
reduce the life-cycle environmental
load of current product systems.”

[UNEP, Tischner, Vezzoli, 2009]
free pdf: http://www.d4s-sbs.org/

Carlo Vezzoli

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

designer designer designer

[e.g. detergent] [e.g. washing machine] [e.g. energy supply]

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

Carlo Vezzoli

TRAD. 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

Carlo Vezzoli

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

shift/allocate on the stakeholder responsible for the
products and/or the services development,
the direct economic and competitive interest to
reduce their environmental impacts

Carlo Vezzoli

TOWARD THE SYSTEM ECO-EFFICIENCY
which characteristics of the offer (company/ies models)?

innovative “trans-phase” and “trans-cycle” INTERACTIONS

A. STAKEHOLDERS’ INTEGRATION (controll extension)
vertical: one stakeholder > Product life cycle
horizontal: one stakeholder > Ps + Ss life cycles

B. STAKEHOLDERS’ INTERACTIONS EXTENSIONS
vertical: (multiple) stakeholders > Product life cycle
horizontal: (multiple) stakeholders > Ps + Ss life cycles

Carlo Vezzoli

ECO-EFFICENT SISTEM INNOVATION
TYPOLOGIES (EXAMPLES)

Carlo Vezzoli

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

Carlo Vezzoli

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 diversification
. reduction and optimisation of lubricants Cost reduction
. Improved efficiency >
. Customer loyalty > reduced environmental impact issues to solve
use . Less environmental

Carlo Vezzoli

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 client)

it is reduced the user reaponsibility in the use
and/or disposal of the product/semi-finished
product (own by her/him)

Carlo Vezzoli

RANK-XEROX
Rank 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’ interest to
provide (and design) long lasting, reusable and
recyclable photocopiers.
photocopiers > COPIED PAPER

Carlo Vezzoli

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

Rank Xerox offers a package deal (products + services).

The customer pays for the package ...

RANK XEROX CUSTOMER

... and RX 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 needmaterial in the machine
. Increased products’ lifespan andto invest
. No and resources
Rankefficiency > reduced environmental cost reduction in use
Xerox is not a photocopier producer only.
recycling from discarded products and overall impact
purchase
. Directly profit from resources efficiency
RANK XEROX: A DOCUMENT COMPANY!

Carlo Vezzoli

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)

Carlo Vezzoli


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’
interest to provide (and design) high efficient, long
lasting, reusable and recyclable washing machines

Carlo Vezzoli

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
the number of washes he/she will do ...
+ appliances
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
lifespan > reduced environmental impact
. Re-use of components from discarded products cost reduction in use
purchase and overall
Carlo Vezzoli

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)

Carlo Vezzoli

ECO-EFFICIENT SYSTEM INNOVATION TYPOLOGIES

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

Carlo Vezzoli

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)

Carlo Vezzoli

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 to 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)

Carlo Vezzoli

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

Carlo Vezzoli

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 to difficult to be predicted,
but as far as they are, design attention should be given
to avoid those eventual side effects

Carlo Vezzoli

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 EE-PSS ARE NOT YET DIFFUSED?

Carlo Vezzoli

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 companies, …

Carlo Vezzoli

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

Carlo Vezzoli

… 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]

Carlo Vezzoli

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
innovations that could lead up to new economic interest
convergences between the stakeholders, characterized by an
intrinsic eco-efficiency

Carlo Vezzoli

ECO-EFFICINET SYSTEM INNOVATION
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”

[VEZZOLI, 2010]

Carlo Vezzoli

3.1 eco efficient system innovation vezzoli-09-10 (33)

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