A framework for sustainable value propositions in product-service systems

Product-service systems (PSS) have received attention as having the potential to meet customers’ needs by combining products and services, decrease environmental impacts and provide business opportunities for industry. PSS have the potential to facilitate sustainable production and consumption and support a transition towards a circular economy (CE). The environmental sustainability is often highlighted as a driver for and a result of PSS. However, the social dimension and the shared value created by PSS have not yet achieved the same attention. In this paper, a framework for sustainable value propositions in PSS is developed with the aim to map and understand the potential sustainable value proposition based on the three core elements of PSS: product, service and system and by investigating the economic, environmental and social value proposition and the type of interaction required for each dimension. The framework thus provides insight into the enlargement of value, when focus shifts from product to service to system. The proposed framework is exemplified by a case study of school furniture and learning environments in Denmark, where the experiences highlight that an understanding of value proposition in a system perspective provides a broader recognition of value for multiple stakeholders. In a product perspective for school furniture, the sustainable value proposition entails price and investment; comfort and design; and narrowing resource loops. In a service perspective, the sustainable value proposition entails a focus on reducing total cost of ownership; service employment; and slowing resource loops. Lastly, a system perspective entails a sustainable value proposition of solutions to societal problems through innovative design and economic savings via rental agreements; better work environment and improved learning outcome; and closing resource loops. The type of interaction changes from transactional to partnerships when moving from a product to a system focus.