Succeeding in Business by Managing Consumption - a more sustainable approach to selling for manufacturers

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Alban Lewis
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1 Succeeding in Business by Managing Consumption - a more sustainable approach to selling for manufacturers PSS APPROACH Adrian Tan, DTU Tim McAloone, DTU & Steve Evans, Cranfield University PRODUCTION DESIGN MARKETING Business! $ Business! Business! $ $ INSTALLATION USE DISPOSAL

2 Product/service-system approaches Product/Service-Systems (PSS) strategy is to shift from business based on the value of the exchange of product ownership and responsibility, to business based on the value of supporting and enhancing the utility of product throughout their entire life cycle. TRADITIONAL MANUFACTURING APPROACH PRODUCTION PRODUCT SALE DESIGN MARKETING Integrated Product Development $ Business! 2

3 Product/service-system approaches Product/Service-Systems (PSS) strategy is to shift from business based on the value of the exchange of product ownership and responsibility, to business based on the value of supporting and enhancing the utility of product throughout their entire life cycle. PSS APPROACH PRODUCTION INSTALLATION DESIGN MARKETING Business! Business! $ Business! $ $ USE DISPOSAL 3

4 Three company cases Steelcase Office furniture B2B & B2G ca.13,000 employees worldwide Vitsoe Shelving system Mostly B2C ca. 40 employees in UK SCA Hygiene Products Incontinence pads Mostly B2G ca. 100 in Denmark 4

5 Four PSS design perspectives Value perceptions PSS Customer activities Actor network Product life phase systems 5

6 Steelcase to provide a better work experience The physical workspace is only a fraction of the total costs, but it can have considerable effect on employee satisfaction and productivity. WORKSPACE COSTS Technology costs (10%) (IT, communications, etc.) Facility costs (8%) (rent/mortgage, maintenance, utilities, etc.) Value in services CONSULTING TRANSFORM REDEFINE REFINE People employing costs (82%) (wages & benefits) AS IS [Brill, M. & Weidemann, S., 2001] Value in products

7 Steelcase Products and services are developed based on usercentred design Measure WORKPLACE SERVICES Manage CONSULTING Explore Plan Provide FINANCING FURNITURE Possible to reduce space and increase productivity and employee satisfaction through usercentred workspace planning. 7

Vitsoe better living with less that lasts longer The 606 Universal Shelving System designed in 1960 by Dieter Rams the influential industrial designer, Dieter Rams configurable system which remains

8 Vitsoe better living with less that lasts longer The 606 Universal Shelving System designed in 1960 by Dieter Rams the influential industrial designer, Dieter Rams configurable system which remains unchanged all new components are compatible with the original system all joints are mechanical (i.e. not bonded or welded) allowing easy repair and dismantling. the products retain their value well and are even prized on the second hand market

9 Vitsoe Customers should only buy what they need. EXCEPTIONAL SERVICES Dismantling Follow up Installation Planning Site visit 50% of sales are from existing customers Cabinets are delivered in reuseable tautliner bags, reducing the need for packaging

10 SCA Hygiene Products better care, lower total costs By ensuring that their products are used optimally SCA can help nursing homes achieve time and money savings, create better work conditions for their care providing employees and improve well-being for those with incontinence. 100% 80% 60% 40% 20% 0% Incontinence care Administration Laundry Leakages Skin irritation treatment Time for pad changing Total costs: 10 x product cost Training of staff Delivery Pad [after Knibbe & Knibbe, 2008] Possible to reduce pad consumption with 20% with less leakages and greater satisfaction amongst pad users.

11 Customer Activity Cycle Continence nurse Consulting Need for pads are reevaluated Experiences trouble keeping dry Consults doctor Relative Care giving staff Continence nurse Care giving staff Follow up Relative Good care practices Follow up on pad consumption Uses pads daily Pad supplier Correct RESIDENT Correct delivery use Orders pads Correct product Learns how to use pads Is diagnosed Granted pads Doctor Best remedy is determined with Continence nurse Competent staff Care giving staff

penge Socialdirektør Kommunikation Key Account Manager årsrapporter og besparelser Økonomi

serviceidéer Distriktschef forecasting Fabrik uddannelsesplanlægning Kundecenter undervisning

undervisning bevilling bleer Kontaktperson bestilling ordre Indkøber forbrugsrapporter og

pleje Uddannelseskoordinator forbrugsrapporter bleer Borger Distributør Læge udreder Pårørende

12 penge Socialdirektør Kommunikation Key Account Manager årsrapporter og besparelser Økonomi Lyngby Taarbæk kommune Politikere kontrakt Ældrechef produktidéer information om nye produkter serviceidéer Distriktschef forecasting Fabrik uddannelsesplanlægning Kundecenter undervisning Udviklingskonsulent Produktudvikling Serviceudvikling og rådgivning Kontinenssygeplejerske undervisning bevilling bleer Kontaktperson bestilling ordre Indkøber forbrugsrapporter og rådgivning Lagerhotel erfaringer og viden støtte netværk Plejepersonale Depot bleer Driftsleder pleje Uddannelseskoordinator forbrugsrapporter bleer Borger Distributør Læge udreder Pårørende Actor network Legend Tegnforklaring: Products Produkter Services Information Money Penge og and contracts aftaler

13 Discussion All high quality products (not low-cost products) Greatest environmental effects in raw materials and production phases Reducing consumption, prolonging use and enhancing utility Services are part of the business model Life cycle thinking (costs and environment) Long term customer relations Steelcase and SCA: high volume products Vitsoe: iconic designer product 13

14 Questions?

Engineering Engineering Design and Product Development Building 426, Nils

15 Adrian R. Tan, M. Sc. Mech. Eng., PhD Student Technical University of Denmark (DTU), DTU Management Engineering Engineering Design and Product Development Building 426, Nils Koppels Allé, 2800 Lyngby, Denmark Telephone (+45) Mobile (+45) Homepage

The Ramifications of Product/Service-Systems on Mechatronic Design

The Ramifications of Product/Service-Systems on Mechatronic Design International Workshop DTU, Lyngby, June 14 th, 2006. Technical University of Denmark Department of Mechanical Engineering Sustainable Innovation Group Section of Engineering Design and Product Development