Abstract
Traditionally, economic growth and prosperity have been linked with the availability, production, and distribution of tangible goods as well as the ability of consumers to acquire such goods. Early evidence regarding this connection dates back to Adam Smith’s Wealth of Nations (1776), in which any activity not resulting in the production of a tangible good is characterized as “unproductive of any value.” Since then, this coupling of economic value and material production has been prevalent in both developed and developing economies throughout the world.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
There is an abundance of similar terms like “servicization” or “servitization.” We have chosen to use the term “servicizing” like many before us, without making any claims about its superiority or grammatical correctness!
- 2.
The term performance-based contracting is also used to describe agreements that are similar in spirit.
- 3.
According to the Jevons paradox (also referred to as the rebound effect; Greening et al. 2000), the overall rate of consumption of a resource increases as the efficiency of the resource improves. That is, as we make the usage of something cheaper, we tend to use more of it.
- 4.
Some of these differences are probably hard-coded due to differences in the training of key stakeholders. Such differences typically fortify silos within organizations. For instance, think of the eternal clash of the “hard” engineering/operations with the “soft” marketing side of the house.
- 5.
It has been suggested that PSS can be thought of as a special category of collaborative consumption business model (Botsman and Rogers 2011). However, we should point out that most collaborative consumption models are found in B2C contexts and are typically offered by third-party providers. In contrast, servicizing models are observed in both B2C and B2B settings and often are offered by manufacturers and/or third party providers.
- 6.
The concept of the customer journey relates to the service blueprints first mentioned in the seminal work of Shostack (1987). For a more recent discussion on the application of service blueprint see Bitner et al. (2008). Stickdorn and Schneider (2010) describe additional design thinking methods applied on services.
References
Abbey JD, Daniel V, Guide R Jr (2017) Closed-loop supply chains: a strategic overview. In: Bouchery Y, Corbett CJ, Fransoo J, Tan T (eds) Sustainable supply chains: a research-based textbook on operations and strategy. Springer, New York
Ackert S (2011) Engine maintenance concepts for financiers. Elements of turbofan shop maintenance costs. http://www.aircraftmonitor.com/uploads/1/5/9/9/15993320/engine_mx_concepts_for_financiers___v2.pdf
Agrawal V, Bellos I (2015) The potential of servicizing as a green business model. Forthcoming in Manag Sci. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2325218
Agrawal V, Ferguson M, Toktay B, Thomas V (2012) Is leasing greener than selling? Manag Sci 58(3):523–533
Avci B, Girotra K, Netessine S (2015) Electric vehicles with a switching station: adoption and environmental impact. Manag Sci 61(4):772–794
Bellos I, Kavadias S (2014) A framework for service design, Working Paper. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2476072
Bellos I, Ferguson M, Toktay B (2016) To sell and to provide? The economic and environmental implications of the auto manufacturer’s involvement in the car sharing. Business, Working Paper. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2372406
Bhavnani R, Sosa M (2006) IDEO: service design (A&B). INSEAD case study 11/2006-5276.
Bitner M, Ostrom A, Morgan F (2008) Service blueprinting: a practical technique for service innovation. Calif Manage Rev 50(3):66
Botsman R, Rogers R (2011) What’s mine is yours: how collaborative consumption is changing the way we live. Collins, London
Brown T (2008) Design thinking. Harv Bus Rev 86(6):84
Businessweek (2014) China’s revised GDP shows rebalancing success with bigger service sector. http://www.businessweek.com/articles/2014-12-19/china-adds-the-equivalent-of-malaysia-to-its-output
Christensen C, Cook S, Hal T (2006) What customers want from your products. Harvard Business School Newsletter, Working Knowledge. 16 Jan
Corbett C, DeCroix G (2001) Shared-savings contracts for indirect materials in supply chains: channel profits and environmental impacts. Manag Sci 47(7):881–893
Corbett C, DeCroix G, Ha A (2005) Optimal shared-savings contracts in supply chains: linear contracts and double moral hazard. Eur J Oper Res 163(3):653–667
Department for Environment, Food & Rural Affairs (2015) Digest of waste and resource statistics. https://www.gov.uk/government/statistics/digest-of-waste-and-resource-statistics-2015-edition
U.S. Environmental Protection Agency (2009) Green servicizing for a more sustainable us economy: key concepts, tools and analyses to inform policy engagement. http://www.epa.gov/epawaste/conserve/tools/stewardship/docs/green-service.pdf
U.S. Environmental Protection Agency (2012) Municipal solid waste generation, recycling, and disposal in the United States: Facts and Figures for 2012. http://www.epa.gov/osw/nonhaz/municipal/pubs/2012_msw_fs.pdf
European Commission (2014) Towards a circular economy: a zero waste programme for Europe. http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1415352499863&uri=CELEX:52014DC0398R%2801%29
Ferguson M, Plambeck E (2008) Teaching note for interfaces’ Evergreen Services Agreement. Harvard Business School, Cambridge
Fischer S, Steger S, Jordan N, OBrien M, Schepelmann P (2012) Leasing Society, Policy Department A: Economic and Scientific Policy, Committee on Environment, Public Health and Food Safety, European Parliament
Ford (2015) Mobility experiment: Ford carsharing. Germany. https://media.ford.com/content/fordmedia/fna/us/en/news/2015/01/06/mobility-experiment-ford-charsharing-germany.html
Fortune (2015) How Ford’s chief became a tech CEO. http://fortune.com/2015/04/24/mark-fields-ford-ceo/
France24 (2013) Theft and vandalism blight Paris bike-share system. http://www.france24.com/en/20130920-france-theft-vandalism-paris-bike-share-system-velib/
Frei FX (2005) Zipcar: influencing customer behavior. Harvard Business School Case Study 9-605-054. Harvard University, Cambridge
Gebauer H, Fleisch E, Friedli T (2005) Overcoming the service paradox in manufacturing companies. Eur Manage J 23(1):14–26
Gneezy U, Rustichini A (2000) A fine is a price. J Legal Stud 29(1):1–17
Greening L, Greene D, Difiglio C (2000) Energy efficiency and consumption-the rebound effect- a survey. Energ Policy 28(6):389–401
Guajardo J, Cohen M, Kim S, Netessine S (2012) Impact of performance-based contracting on product reliability: an empirical analysis. Manag Sci 58(5):961–979
Guinée J, Heijungs R (2017) Introduction to life cycle assessment. In: Bouchery Y, Corbett CJ, Fransoo J, Tan T (eds) Sustainable supply chains: a research-based textbook on operations and strategy. Springer, New York
Heiskanen E, Jalas M (2000) Dematerialization through services: a review and evaluation of the debate., Ministry of Environment
IBM (2014) IBM issues statement on U.S. Government regulatory approval of x86-based server divestiture to Lenovo. https://www-03.ibm.com/press/us/en/pressrelease/44588.wss
Kahneman D, Knetsch J, Thaler R (1991) Anomalies: the endowment effect, loss aversion, and status quo bias. J Econ Perspect 5(1):193–206
Lambrecht A, Skiera B (2006) Paying too much and being happy about it: existence, causes, and consequences of tariff-choice biases. J Marketing Res 43(2):212–223
Lenovo (2004) Lenovo to acquire IBM personal computing division. http://www.lenovo.com/news/us/en/2005/04/ibm_lenovo.html
Leonard D, Rayport J (1997) Spark innovation through empathic design. Harv Bus Rev 75:102–115
Levitt S, Dubner S (2005) Freakonomics: a rogue economist explores the hidden side of everything. William Morrow, New York
Lim M, Mak H, Rong Y (2015) Toward mass adoption of electric vehicles: impacts of the range and resale anxieties. Manufact Serv Oper Management 58(3):523–533
MacLean HL, Lave LB (2003) Life cycle assessment of automobile/fuel options. Environ Sci Technol 37(23):5445–5452
Oliva R, Quinn J (2003) Interfaces Evergreen™ Services Agreement. Harvard Business School Case Study 9-603-112, Harvard University
Peugeot (2015) Mu by Peugeot. http://www.peugeot.com/en/products-services/services/mu-by-peugeot
Rothenberg S (2007) Sustainability through servicizing. MIT Sloan Manage Rev 48(2):83–91
Sawhney M, Balasubramanian S, Krishnan V (2003) Creating growth with services. MIT Sloan Manage Rev 45(2):34–44
Shostack G (1987) Service positioning through structural change. J Marketing 51(1):34–43
SKF (2014) Asset diagnostic services. http://www.skf.com/group/services/asset-management-services/asset-diagnostic-services/index.html
Stahel W (1994) The utilization-focused service economy: resource efficiency and product-life extension. National Academy Press, Washington. DC
Stickdorn M, Schneider J (2010) This is service design thinking: basics-tools-cases. BIS, Amsterdam
Suarez F, Cusumano M, Kahl S (2013) Services and the business models of product firms: an empirical analysis of the software industry. Manag Sci 59(2):420–435
Sullivan J, Cobas-Flores E (2001) Full vehicle LCAs: a review. Tech. rep, SAE Technical Paper
Teboul J (2006) Service is front stage: positioning services for value advantage. Palgrave Macmillan, New York
Thaler R (1980) Toward a positive theory of consumer choice. J Econ Behav Org 1(1):39–60
The Economist (2012) Seeing the back of the car. http://www.economist.com/node/21563280
The New York Times (2009) French Ideal of bicycle-sharing meets reality. http://www.nytimes.com/2009/10/31/world/europe/31bikes.html?pagewanted=all&_r=1&
The World Bank (2013) Indicators. http://data.worldbank.org/indicator/NV.SRV.TETC.ZS
Thomke S (2003) R&D comes to services. Bank of America’s path breaking experiments. Harvard Bus Rev 81(4):70–79
Toffel M (2008) Contracting for servicizing. Working Paper, Harvard Business School. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1090237
Toktay B, Selhat L, Anderson R (2006) Doing well by doing good: interface’s vision of being the first industrial company in the world to attain sustainability. In: Rouse W (ed) Enterprise transformation: understanding and enabling fundamental change. Wiley, New York
Tukker A (2004) Eight types of product-service system: eight ways to sustainability? Experiences from SusProNet. Business Strat Environ 13(4):246–260
White A, Stoughton M, Feng L (1999) Servicizing: the quiet transition to extended producer responsibility. Tech. Rep. U. S. Environmental Protection Agency, Office of Solid Waste
Wise R, Baumgartner P (1999) Go downstream. Harvard Bus Rev 77(5):133–141
Xerox (2015) Managed print services. http://www.services.xerox.com/xerox-managed-print-services/enus.html
Zeithaml V, Parasuraman A, Berry L (1985) Problems and strategies in services marketing. J Marketing 49(2):33–46
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2017 Yann Bouchery, Charles J. Corbett, Jan C. Fransoo, and Tarkan Tan
About this chapter
Cite this chapter
Bellos, I., Ferguson, M. (2017). Moving from a Product-Based Economy to a Service-Based Economy for a More Sustainable Future. In: Bouchery, Y., Corbett, C., Fransoo, J., Tan, T. (eds) Sustainable Supply Chains. Springer Series in Supply Chain Management, vol 4. Springer, Cham. https://doi.org/10.1007/978-3-319-29791-0_16
Download citation
DOI: https://doi.org/10.1007/978-3-319-29791-0_16
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-29789-7
Online ISBN: 978-3-319-29791-0
eBook Packages: Business and ManagementBusiness and Management (R0)