Great value in selling more than just products

The transition from simply selling products to delivering functions involves fundamental changes for many industrial companies. Done the right way, it can both create significant added value and lead to solutions that are more sustainable in the long-term.

Johannes Matschewsky with his thesis. Photo credit: Mikael Sönne

Simple in theory

The combined offering of products and services takes place in what are known as product-service systems (abbreviated PSS), in which companies deliver a specific function, such as illumination, instead of selling a physical product such as a lamp. This means that the company delivers both a product and a service, while at the same time retaining the ownership and control of the product, which is leased or rented by the customer.

The delivery of a function involves major changes at all stages: design, manufacturing, sales, reuse, and remanufacturing. This new paradigm brings with it a new view of sustainability, resource efficiency, and energy conservation.

“Previously, it was almost a good thing if the product broke down after a few years, so that the company could sell spare parts. But this is hardly desirable if the company itself owns the product. What is then important is the cost during the complete life cycle, not just the cost of manufacture”, says Johannes Matschewsky, researcher in the Division for Environmental Technology and Management.

“It may sound simple, but it’s difficult to introduce it in practice. Many companies don’t truly understand what PSS means, and are still living with their product-focussed processes.”

Johannes Matschewsky

Information of what?

In his doctoral thesis, Effective and Efficient Design and Provision of Product-Service Systems — Challenges, Opportunities, and Solutions, Johannes Matschewsky examines how two major industrial companies currently work with PSS, and how they can develop such work in the future. The study is mainly based on interviews and workshops, and presents two concrete suggestions for methods to determine not only the values that PSS can create, but also how these values can be increased.

When the supplier continues to own the product, the greatest added value is the possibility to collect data about the users. This information can in turn be used to develop new, and better, products.

“At the moment, many companies tend to add sensors, which are relatively cheap, to products, and let them collect in loads of information. What is difficult is to filter out the information that is important and make sure that it reaches the right people in the company, such as the product-development team."

"Some companies have created huge Excel worksheets with loads of information, but have not benefited from them.”

Can be useful in practice

The companies in the study have discussed the methods that Johannes Matschewsky has developed and consider them to be interesting and valuable. Together with a colleague, he is now continuing to work with one of the companies to apply parts of the research results in practice. At the same time, he points out that the model is generally applicable, and can be used by many companies in different industries.

“I want the method to have as large an impact as possible. But it must be adapted to the particular situation: this is not a plug-and-play method. There is also a great value in starting to think in new ways, and this may be just as important as the concrete results themselves.”

In the thesis, Johannes Matschewsky also proposes a structured way of working to develop new PSS methods, and investigates the significance that PSS can have in establishing a circular economy. He will publicly defend the thesis on 8 May in ACAS, A Building, Campus Valla. Principal supervisor has been Mattias Lindahl, professor of industrial environmental technology.

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