PRODUCT SERVICE SYSTEMS: THE FUTURE FOR DESIGNERS? THE CHANGING ROLE OF THE INDUSTRIAL DESIGNER

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1 PRODUCT SERVICE SYSTEMS: THE FUTURE FOR DESIGNERS? THE CHANGING ROLE OF THE INDUSTRIAL DESIGNER Dr. J.C. Diehl / Dr. H.H.C.M. Christiaans Delft University of Technology (DUT) / Ulsan National Institute of Science and Technology (UNIST) j.c.diehl@tudelft.nl ABSTRACT The role and focus of the industrial designer has changed and broadened over time. A next design practice with growing attention from the design community is the design of Product-Service Systems (PSS). Within this paper we will discuss what the motivations are for the different stakeholders to move from Product Design to Product Service System Design, what makes designing a PSS different than designing a product, what the are the challenges for designers in developing PSSs and which role designers can play in this complex innovation process. These topics will be discussed based upon the outcomes of a range of recent research projects related to PSS and the Design Profession, which have been carried by or in collaboration with our Faculty of Industrial Design Engineering. This in order to better understand better the role of Industrial Designers in the development of PSSs as well as how future designers can be better prepared and equipped for this role (i.e. by embedding PSS in Design Curricula). Keywords: Product Service Systems, Role of Design, Sustainability. INTRODUCTION THE CHANGING ROLE OF THE DESIGNER The role of the industrial designer has changed and broadened over the years. Over time designers have actively strived to participate in the development process in an earlier stage, and also to increase their own impact on this process and business in general. These new areas of design have created different roles for the industrial designer (Valtonen, 2005). Meanwhile the focus of the design profession shifted over time from form giving to industrial design, from a production focus to a product focus, from productcentered to human-centered design and next from user-centered to social- and sustainability design. The previous roles have not disappeared, they still exist, but the general area of work for the industrial designer has broadened (Valtonen, 2005). A next design practice with growing attention from the design community is the design of Product-Service Systems (PSSs) (Valencia, Mugge, Schoormans, & Schifferstein, 2014, Vezzoli, Ceschin, Diehl & Kohtala, 2015). More and more companies are as well embracing design as a way to enable their organization to adapt changes in society like the increase of PSS offerings (Lille, Roscam-Abbing, & Kleinsman, 2012). Within this paper we will discuss what the motivations are for the different stakeholders to move from product design to Product Service System (PSS) design, what makes designing a PSS different than designing a product, what the challenges are for designers in developing PSSs and which roles the designers can play in this complex innovation process. We will discuss these topics based upon the outcomes of a range of recent research projects from different perspectives related to PSS and the Design Profession, which have been carried by or in collaboration of our Faculty of Industrial Design Engineering (Lille et al., 2012, Valencia et al., 2014, Vezzoli, Kohtala, Srinivasan, Diehl,Fusakal, Xin, & Sateesh, 2014, Vezzoli et al. 2015, Vezzoli, Ceschin, & Diehl, 2015).

2 PRODUCT SERVICE SYSTEMS Tukker (2004) defines PSS as tangible products and intangible services designed and combined so that they jointly are capable of fulfilling specific consumer needs. Likewise Vasantha, Roy, Lelah, & Brissaud, (2012) define PSS as the process of integrating business models, products and services to create innovative solutions with added value for customers. Generally speaking, PSSs are developed when manufacturing companies add service components to their offerings (i.e., servitization), service companies add products to their service offerings (productization) or when a new company forms its market proposition based on both (Valencia et al., 2014). Simplified a PSS can be illustrated as a combination of tangible products, intangible services and an integrated business model (Figure 1). Figure 1: PSS as an integration of tangible products, intangible services and an integrated business model. Three types of PSSs are generally acknowledged in the PSS research field (Figure 2): result-oriented, use-oriented and product-oriented PSSs (Tukker, 2004). In result-oriented PSSs, companies sell results or competencies rather than tangible products. In use-oriented PSSs, products have a more prominent role. Unlike result-oriented PSSs, providers of useoriented PSSs sell the accessibility and use of specific products. Finally, in product-oriented PSSs, a tangible product is sold and its ownership transferred. Additional services are then offered to guarantee the correct functionality and durability of the product. PSSs are not totally new to industry. Xerox for example already a long time ago transformed from a company producing copiers, printers and paper into a services led technology company focused on Figure 2: Three types of PSS (Tukker and Tischner, 2006). customer value. Recently also typical product and technology companies like Philips Lighting made their transition to the PSS market (servitization). Their new LED lights are energy saving and low maintenance (low running costs), however the initial purchasing costs are high. The other side of the coin is that because of the long lifetime of LED lights, once clients have purchased one, it will take another 25 years before they the buy the next one for the same purpose (as such no sales for a long period for the company). Consequently Philips Lighting decided to offer light as a service instead of selling lamps to business customers like municipalities (i.e. public light) and hospitals. Philips Lighting designs, implements, maintains and takes back at the end-oflife the electronic light infrastructures and gets paid per unit of light delivered per year by the clients. The new offered PSS offer is beneficial for all stakeholders included in the system, but also means a large shift in developing PSSs instead of products within the company. In the next paragraph we will discuss these and other motivations for moving from product to PSS development. MOTIVATIONS FOR MOVING FROM PRODUCTS TO PRODUCT SERVICE SYSTEMS? GENERAL PERSPECTIVE Many industrialised nations are witnessing a contraction in their manufacturing sectors caused by a shift of production to low cost economies. Companies continually strive to increase production, but in recent years, the effects of this effort have demonstrated that providing products alone is insufficient in terms of remaining competitive (Yu, Zhang, & Meier, 2008). In order to combat this,

3 manufacturing firms have moved away from seeking competitive advantage from process or product innovation to servitising by integrating value added services with their core offering (Lockett et al., 2010). The development and implementation of PSSs in this situation can provide an alternative way for companies to increase market share as well as customer satisfaction (Beuren et al., 2013). PSSs, delivering value instead of products, are proposed to be not only valuable for the producer or provider but as favourable as well for other stakeholders in the system, e.g.: Customers: Providing value through more customization and higher quality. The service component, being flexible, can also deliver new functionalities better suited to customer needs. Manufacturers: Realizing the limits of mass production and cost reduction. Now competing on the basis of value delivered rather than on basis of costs. In addition products are relatively easy to imitate by competitors, whereas PSSs are less easy to replicate. PSSs offer also closer and longer relationships with the customer and consequently better understanding of them as well longer (and more) financial transactions. Governments: Replacing loosing jobs in the manufacturing sector (often going abroad) by new jobs in PSSs (especially the service element which is labour and relationship intensive). Society: By increased sustainability (see next paragraph). These are some of the motivations for industry and other stakeholders to move away from products to PSSs. SUSTAINABILITY PERSPECTIVE PSSs have gained considerable attention among the sustainable production and sustainable design communities, who acknowledged its potential to reduce the environmental footprint of products; for example, by reducing the relevance placed on product ownership, thereby maximizing the lifespan of products (Valencia et al., 2014, Vezzoli et al., 2015). Sustainable Product Service Systems (S.PSS) can be defined as an offer model providing an integrated mix of products and services that are together able to fulfill a particular customer demand (to deliver a unit of satisfaction ), based on innovative interactions between the stakeholders of value production system (satisfaction system), where the economic and competitive interest of the provides continuously seeks environmentally and socio-ethically beneficial new solutions (Vezzoli et al., 2014). S.PSSs have been of interest of researchers already since the end of 1990 s (Goedkoop, Halen, Riele, & Rommes, 1999, Brezet, Bijma, Ehrenfeld, & Silvester, 2001, Charter and Tischner, 2001) and has been one of the first research areas in which the design domain met with PSS. Examples of sustainability benefits of a S.PSS are: Compared to the traditional product sales model, within a S.PSS model a company can improve revenues if it can meet the same demand by providing a less resource-intensive product and related service mix. During the use phase, the producer has potential economic interest to reduce the amount of resources consumed, because profit is dependent on the cost per unit of service provided to the customer. Furthermore, since the provider remains the owner, or at least retains some responsibility for the product over its life cycle, there is an economic incentive to extend the product s lifetime. The benefit for the consumer arises from the fact that S.PSS cut initial investment and running costs. The benefit that accrue are not only economic, but also more widely socio-ethical as S.PSSs can broaden access to useful goods and services to lower income strata like for example solar home systems (Vezzoli et al., 2014). WHAT MAKES DESIGNING A PSS DIFFERENT THAN DESIGNING A PRODUCT? Observing the increasing designers involvement in the design of PSSs, there is a need to enlarge the knowledge related to the process of designing PSSs.

4 The creation and implementation of PSSs may pose new challenges for designers as well as for the organizations they are operating within. In this paragraph we discuss some of the differences between designing a product and designing a PSS. We discuss this from the perspective of a product designer. delivery) and simultaneity (the fact that in services production and consumption occur simultaneously) (Johne & Storey 1999). Designers have to take into account this intangibility, simultaneity and heterogeneity when designing a PSS and that is not an easy task (Lille et al., 2012, Vezzoli et al., 2015). Both New Product Development (NDP) and New Service Development (NSD) have been well documented, the former from a product design perspective, the latter from a management perspective (Lille et al., 2012). NPD and NSP come together in Product Service Systems Development, which is to a much lesser extend documented as well as less equipped with proper PSS design tools and methods (Figure 3). It is still a domain under construction. Figure 3: New Product Development (NPD) and New Service Development (NSD) merged into Product Service System (PSS) Development. Product Designers and Service Designers are accustomed to creating products and services separately. However, the product and service in a PSS are so deeply intertwined that a distinction between the two may no longer be possible (Valencia et al., 2014). For product designers with an NPD background the development of PSSs brings them in contact with the service component (NSD). In this perspective NPD is focusing mainly on tangible products and a clear defined process leading from idea generation to market introduction, NSD has a broader scope (Bhömer, Lille, Tomico, & Kleinsmann, 2013). Not only intangibles are an essential part of services (versus tangible products), two other differences between NPD and NSD are heterogeneity (the various channels, touch points, systems, business models and resources that a role in service Consequently Product-Service Systems can be seen as complex solutions whose design require the consideration of multiple aspects, such as technology, development actors, users and context (Morelli, 2002). Its complexity makes it not only more challenging to design, but also to test, implement and bring to the mainstream (Vezzoli et al., 2015). While designing PSSs, designers need to think holistically at a system level, but should also be able to shift easily to details, for example, when discussing the specifics of product or service elements (Joore & Brezet 2015). Thinking at a system level (i.e., covering all touch points, product and service elements) is important because it can influence the creation of coherent experiences for customers (Valencia et al., 2014). Designing itself is already an integration of several knowledge domains. But the development of PSSs requires a far-reaching integration of distinctive knowledge domains from diverse stakeholders (Lille et al., 2012, Vezzoli et al., 2015). Opposite to product developers, PSS developers need to be prepared for life-long development issues. A PSS is often in a constant evolution, typically through the service life long development issues rather than the development process as completed after the product launch (Isaksson, Larsson, & Ronnback, 2009, Valencia et al., 2014). Within the NPD process normally limited types and amounts of stakeholders are involved. Also the amount of stakeholders needed for bringing the product to the market are limited. On the contrary, one of the main challenges of a PSS is the construction of new partnerships and stakeholder interactions (Vezzoli et al., 2015). A PSS is the result of the value co-production process within such a partnership (Morelli 2006). Consequently, strategic partner management is one of the critical success factors of PSSs. New

5 innovative partnerships play an important role in this (Vezzoli et al., 2015). This collaboration is not always easy, since stakeholders have different interests and perspectives on the PSS. Stakeholders from different disciplines use different languages and different representations of the PSSs (Lille et al., 2012). Last but not least there is the need to embed a PSS culture within the organisation (Martinez, Bastl, Kingston, Evans, 2010). In other words changes in the corporate mind set and organisation are required in order to support a more systemic innovation and PSSoriented businesses (Manzini & Vezzoli 2002). Since capabilities and knowledge for producing and selling products are considerably different from those of managing a PSS, it is clear that companies require new competences, skills, and experiences, in relation to both management and design activities. CHALLENGES AND ROLE FOR DESIGNERS WITHIN THE SMART PSS DEVELOPMENT PROCES Knowing now the motivation for the increasing attention for PSS as well as how it differs from NPD, we now will explore some of the challenges which designers encounter while developing PSSs. Valencia et al (2014) explored the design process of smart PSSs. Smart PSSs are market offerings that integrate products and services into one single solution through the implementation of IC technology. In order to explore the design process of smart PSSs they interviewed ten professionals from six different companies. They identified seven main design challenges from the collected data: Defining the value proposition - One of the most significant challenges is the clear definition of the value proposition for consumers. Since companies providing PSSs seek to create long-lasting interactions with end-users, a well-defined value proposition can be key in building relations that last. Maintaining the value proposition over time Long lasting interactions with the end-users. Creating meaningful high quality interactions Understanding the human component. Creating coherence in the smart PSS Coherence is particularly important because of the multiple touch points that are part of the system. Stakeholder management - Since the design of PSSs is typically transdisciplinary, multiple stakeholders are involved, who may have different perspectives on what the system should deliver, have different problem-solving approaches, or communicate differently. Clear communication tools In order or create a shared vision. Selection of means and tools for the design process. The design of Smart PSSs is considered to be a new domain. This newness poses challenges for designers when selecting tools and methods to support the design process. ROLE OF DESIGNERS With these challenges in mind, what are the potential roles in this complex process of developing and delivering a PSS? Roughly two different roles can be foreseen for the designer: 1) developing the PSS, 2) preparing the organisation for delivering the PSS. DESIGNER SKILLS FOR PSS DEVELOPMENT Traditional design skills, including imagination, creativity, innovation and value creation have already proved to be of great value for developing the PSS. The research projects (Lille et al., 2012, Valencia et al., 2014, Vezzoli et al., 2014, Vezzoli et al. 2015, Vezzoli et al., 2015) which have been used as a basis for this paper all highlight the typical designers skills that positively contribute to the development of PSSs. The most essential ones are: Designer as co-creator and human-centered focus: The designers ability to empathize with multiple kinds of people and the skills to cocreate enables collaboration to develop the PSS. The co-design activities typically aim at searching new potential directions, new collaborations and producing design ideas and solutions. However they can also be about making sense of the topic or expressing the experiences collaboratively. Designers as guardians of experiences: Designers may face challenges in achieving coherence in the

6 design of a PSS. Incoherence can lead to poor experiences for the end-user, and result in dissatisfaction with the PSS. To counter this challenge, designers were acknowledged to play an important role in defining and guarding the experience around the PSS (Valencia et al., 2013). Designers are future-oriented: Designers by the nature of their work are futurists. As nothing in the future has been decided upon, designers also need to deal with large amounts of uncertainty. These skills are useful for e.g. developing future oriented scenarios and roadmaps for the (continuously) to be developed PSS as well as for managing the uncertainties related to the outcomes during the PSS development process. Designers as problem solvers: Reaching a clear communication of design goals during the design of PSSs is an important challenge. In relation to this challenge, the problem solving capacities of designers are perceived to have a positive effect on the communication among different stakeholders. For example, designers are able to cope with abstract information, which makes them particularly suited for the design of complex systems. Designers as visualizers: Designers are able to make insights usable, by making abstracts matters visual. Designers know how to translate data and insights identified through collaboration and insights gathered from stakeholders into a form that is useful within future oriented and complex design projects. Rapid visualisation and rapid prototyping may give stakeholders a concrete image of the future solution that words alone never can convey (Utterback, Vedin, Alvarez, & Ekman, 2006, Bhömer et al., 2013). Furthermore, these visualizations contribute to a shared understanding and shared vision of the project objectives among team members. Designers as integrators: To manage the different views and expectations of stakeholders, designers were perceived to have the capacity to listen to stakeholders and integrate their demands (Valencia et al., 2013). PSS METHODS AND TOOLS Next to the generic skills of industrial designers, specific tools and methods are needed to equip designers with the specific skills and capacities for developing the PSSs. According to Tukker (2015) a variety of tools, guidelines and methods have been developed of which the UNEP s Design for Sustainability manual, which includes a PSS module (Crul, Diehl, & Ryan, 2009) is the most widely disseminated. Other manuals are the result of projects like the Sustainable Product Development Network (SusProNet) project, the Method Product Service Systems (MEPSS) project. The methods described above are usually supported by dedicated tools and worksheets on aspects such as idea generation and creativity enhancement; economic, social and environmental evaluation; visualization of the PSS in the form of a storyboard; and description of the PSS business model in terms of technical architecture, organizational architecture, and revenue streams, including the need for setting up new partnerships to deliver the PSS ( make or buy decisions). Despite appearances, most of the aforementioned methods show a healthy sensitivity to the fact that PSS design is not usually a linear process, but is an iterative affair and does not necessarily start with a top down strategic SWOT analysis of the product and market portfolio; it can also start with straightforward ideas generated in producer client interactions. The intrinsic complexity of some PSSs require that such tools to be used with a high degree of flexibility: narrative tools, such as scenarios and use cases should be preferred in the definition phases, whereas more technical tools are preferable for defining the structure of PSS (Morelli 2006). A comprehensive and unique methodological approach is probably impossible in this area, where the margin of uncertainty about contextual conditions may be very high (Morelli 2006). A discussed above, a range of tools and methodologies exist for the conception of the PSS. However an assessment of how these tools perform in practice is still required.

7 DESIGNER SKILLS FOR CHANGING ORGANISATIONS Furthermore, companies making the shift from manufacturing to service provision (and vice versa) may require a shift in organizational culture, and to rethink their ways of working and communicating (Valencia et al., 2014). Developing PSSs does not only require a new PSS, it also requires changes in the organization, involving the entire company, the innovation process and often its business model (Lille, et al., 2012). This in order to restructure the organisation in a way to be competent in designing, making, and delivering PSS offers (Baines et al., 2007). Also in this transformation designers are expected to have a positive contribution by amongst others: Unraveling the underlying questions at the start: Often organizations do not really know what they need and have to surface the underlying what & why questions first before thinking about how (Bhömer et al., 2013). As soon as the urgency for the organization is unraveled, the team can start with defining the focus for the project. The designer can help in formulating the underlying change questions. Empowering internal stakeholders: The development of a new PSS is often seen as an interaction with external stakeholders. However it should be stressed to use the internal strengths of the organization as well. Stakeholders within the organization have to be involved intensively by giving power to them and to put them in charge. Change initiated by them will be accepted easier by the rest organization. Designers can stimulate this process and support the internal stakeholders in developing their new skills. Changing mindset: To create a designerly mind set in the company in order to make the organization able to come up freely with multiple ideas to implement in the organization. Quick short time ideas to convince and strength the organization and long term implementation ideas to prepare the organization for the future. Designers can facilitate this process towards more creative thinking. DISCSUSSION It is clear that the role and focus of the industrial designer has changed and broadened over the time. In that perspective the design of PSSs has gained increased interest from the design community as a next challenge and role for designers. As discussed PSS is a promising approach not only for the providers, but also for the customers and society (sustainability benefit). There is a wide range of motivations for shifting from delivering products toe delivering PSSs (units of satisfaction). Despite its expected relevance, it is still a rather underexplored design domain and there is an urgent need to do so. During the PSS development process designers are confronted with different challenges compared to traditional NPD. In addition, the role of the designer in the process can be twofold: designing the PSS as well as preparing the organization for a different mindset. In order to better prepare and equip current and future designers for this role a more indepth understanding of the process in need as well as a better understanding on how designer can best facilitate this. These insights next can be translated into recommendations for adaptations in the current design curricula in order to prepare design students for their future role of PSS designers. REFERENCES Baines, T. S., H. Lightfoot, E. Steve, A. Neely, R. Greenough, J. Peppard, R. Roy, E. Shehab, A. Braganza, A. Tiwari, J. Alcock, J. Angus, M. Bastl, A. Cousens, P. Irving, M. Johnson, J. Kingston, H. Lockett, V. Martinez, P. Michele, D. Tranfield, I. Walton and H. Wilson (2007). "State-of-the-art in product service-systems." Proc. IMech Eng. Part B: J. Engineering Manufacture 221: Beuren, F. H., M. G. Gomes Ferreira and P. A. Cauchick Miguel (2013). "Product service systems: a literature review on integrated products and services.." Journal of Cleaner Production47: Bhömer, M. t., C. D. Lille, O. Tomico and M. S. Kleinsmann (2013). From products to services: reflections on the challenges in designing for services. 5th international congress of international association of societies of design research. Tokyo. Brezet, J. C., A. Bijma, J. Ehrenfeld and S. Silverster (2001). The Design of Eco-Efficient Services: Methods, Tools and Review of the Case Study Based "Designing Eco-Efficient Services". Delft, Delft University of Technology. Charter, M. and U. Tischner (2001). Sustainable Product Design. Sustainable Solutions: Developing Products and Services for the Future. M. Charter and U. Tischner. Sheffield, Greenleaf Publishing.: Crul, M., J. C. Diehl and C. Ryan (2009). Design for sustainability - A step-by-step approach. Paris, UNEP.

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